Case Study- Amazon
Case Study of Amazon (Techy)
Amazon India began its operation as a powerhouse of retailing in the U.S . They entered the Indian e-commerce market with their user-friendly website .They added many titles and widened their products Portfolios. They also created the ecosystem that was related to Wholesale purchase of the Products. Further, they tactically fixed the centers and contracts so that these goods can be easily shipped into and across the country. Amazon realized that more than a billion people in this country have not exposed to the e-commerce markets.
The Indian market bore good as well as bad news for the company. The Good news was that more than 65% of the consumers were under the age of 35 years with the high percentage of disposable income, owned smart phones, and widely used the internet. The bad news was that 67% of Indian population still live in Rural set up and Under developed Infrastructure. Further, only 35% of the Indian population had access to the internet. Customers prefer cash transactions to digital payments. FDI rules also restricted a foreign multi brand retailers to sell the products and goods directly to the consumers through the digital channels. Thus, Amazon would need a third party seller for the Indian market. To do all these tasks and deal with complexities, Amazon had to understand strategic market research (Youderian,2016) .
Business Issues and Approaches
Amazon needed the Innovative business model to finalize ways to sell the products and goods in India. There was no shortage of the products that were manufactured and produced in India. But the Vendors were small in scale. In this situation, a few e-retailers tried to seek the products online in India, but a cash-based economy model could not succeed in their businesses. To address these issues, Amazon launched their Indian website in 2013, and recruited suppliers as their partners to conduct business in India. They launched “Amazon Chai Cart”. These mobile tea carts navigated on the streets of the cities, served refreshments, and educated the small business owners about the way e-commerce is used. This cart travelled 9,400 miles across 31 cities and involved 10,000 sellers Subsequently, they launched “Amazon tatkal” which was the “Studio On wheels” and provided various services such as registration, imaging, cataloging, and training.
They also used the centralized shipping platforms and developed around two dozens warehouses in India in Telangana. Amazon futhure introduced “easy ship” and “seller flex”. Through these systems, Amazon couriers picked the products from the seller’s place and delivered to the consumers. Subsequently, warehouses were designated for the courier and Amazon fully coordinated the delivery systems and logistics. This system was expedited by the “neighborhood” approaches where it was easy the earlier to expedite the product delivery. The major delivery system were contacted such as Indian post and Blue Dart . The company also developed the Amazon transportation services where bikes and bicycles were used to deliver products in the urban and rural areas of India. However, there were challenges with the rural areas due to lower literacy rate and limited infrastructure.
Interestingly, there were many Indians who were not ready to rely on online services and considered mom-non-pop stores to be more convenient. There were issues related to Internet services and basic infrastructure. However, all these concerns were addressed, and Amazon Indian achieved business to the level of $3 billion. This was due to the fact that there is very high potential in India, and the company was even ahead of the competitors, including Flipkart and Snapdeal (Sen,2014)
Processes of Research by Amazon
These Wonderful results were achieved by using effective approaches such as usage of appropriate key words for their brand which was commonly used by the consumers. This approach helped the company reach out to consumers who were actually looking for online retailer or products. There were many up selling and cross selling carried out by the company with the help of the cookies and web beacons. The cookies provided the company with the customized data about the purchase history and other behavior patterns. Amazon provided these users very personalized offer based on their past history. The relevent information was approved of by the users. Additionally, they also worked on the presentation and packaging of th products. When consumers sent the products as gifts to another person, it was amazingly packaged and personalized Further, Amazon also tracked the computers using the softwares. They used chrome extension to track the history and received products details which helped them develop the subsequent competitive advantage strategy.
More Specifically, all the challenges and issues were addressed by the company by conducting proper research. This research had many problems as we have seen. Thus , data was collected from various sources, including offline and online platforms and analyses was carried and these approaches were developed. This research was in Sync with the vision of a company which aims at providing customers with a satisfying experience. In line with this, they offered low prices and more alternatives and easy merchandizing. Thus, all the approaches of the company were consumer centric. Amazon provided easy to use functionality, quick and credible customer service with a variety of content and trust in every transaction (Chaffey,2014; Ray et al.,2013)
Data collection Methods by Amazon
The company’s website has customer reviews and products information that were in sync with the customer requirements. There were buying guidelines and free shipping offers offered by the company to increase the customer spend. In line with these, the company offered the latest inventory records and estimates of delivery dates with fast track delivery options. Further, the company used many techniques such as business intelligence, machine object coaching, queueing systems, neural networks and so on to understand the consumers and make customer oriented strategies and approaches. The data in these camps, the focus was on understanding human behavior and its complexities.
Subsequently, with this robust research and findings, they worked on the revenue per review, Additionally, they tried to understand how the approaches affect their business.
This also meant that the “DATA” is king in the company. Amazon managed the details of all the transactions at various stages online and displayed the status to the consumers. These data also helped the company bid for paid search advertising. Amazon also worked on the review conversion power by ensuring that each review was paid. Further search optimization and review count were also undertaken by the company. They realized that high review is great, but if it is in proportion to the review count, it is outstanding. Amazon realized that clicks do not work in their business. Thus, they had to go deeper and worked on untapped markets. they modified the search and used to reach the stage of completion. This meant that the users typed something, it was filled by Amazon (Madden,2012).
Initial Benefits By Research Amazon
They also used research that helped the company to sell the products in the niche markets. Further, seller can even work on the structured markets to earn high profits. Thus, Amazon worked on the in-depth reviews and more scientific market research that facilitated the company to track the products that were in demand. For this research , Amazon used “JUNGLE SCOUT”. This software provided data about the revenue the company achieved on various products. Amazon essentially worked on Data analytics and market research. In line with this, Jungle Scout was used as a research tool for the Amazon sellers, and it is a software products. This Software Collects data from different data points and facilitates that sellers. Additionally, the company educated them with regards to the purchasing decisions. Therefore, they could identify excellent products that could be sold via Amazon.
This Software also worked on sales estimates as many users provided the data While making the Purchase. It works on the “best sellers rank” for which the algorithm is developed to track and monitors at least a hundred algorithm is created to get this update every month, Which provides the sales estimates to Amazon and how they are performing on their business metrics (SEN,2016).
Way Ahead
India is very nascent in e-Commerce, video streaming, and cloud computing. Yet, there are multiple opportunities in the country. This is because there are 1.3 billion people, which is four times the US population. The country is growing at an annual rate of 5%-10%. Indians are conversant in English Further, there is a highly penetration of smart phones in the country and shipping is cheaper in India as compared to the US. There is prediction that by 2020, there will be 175 Million shoppers in the online retailing space. This means the bushiness. However, India needs more investment not only in currency about in patience and preservence in dealing with the infrastructure couples with a long-term perspective. The complexities of culture, preference ,liking, and consumer behavior are really complex and dynamic. Thus, this Country needs constant and continuous research to understand and provide excellent customer experiance to all its consumers across the country. (SHAH,2016)
