Amazon - Customer Experiences

Not long ago, I was visiting my parents, and my mom happened to be shopping online. "This company wants me to pay for shipping," she said, frustrated .This is something you would have never heard 10 years ago. Back then, everyone expected to pay the infamous "shipping and handling" charges.

Amazon realized customers were frustrated with navigating a complicated checkout process, paying for shipping, and waiting weeks for delivery, so it createdAmazon One ClickandPrime. Now, Amazon's processes are considered the benchmark for online shopping. Its deliveries are faster than expected, and other online retailers are scrambling to keep up.

Not long ago, I ordered batteries on Amazon that ended up being the wrong size. I jumped online to return them, and a customer support specialist immediately prompted me to "chat"in real time. I explained that I had purchased AA batteries when I needed AAA and was planning on exchanging them.

The employee told me to keep the ones I ordered and they would send me AAA batteries immediatelyat no additional charge. Amazon realized that for the time and money it would take to process the return, restock the batteries, and resell them, it was easier and more cost-efficient to simply give me the batteries and turn me into a customer for life.

You might not be able to create this level of extreme ease in your own company, but you can remove a lot of friction. Make it easy to search your website, add items to your cart, and return them if necessary. Have customer support specialists ready to chat with customers who need help to make the experience as seamless as possible.

One of the coolest and most customer-centric functionalities of the Amazon experience is the "Customers Who Bought This Item Also Bought" feature.

I recently bought Ray Dalio's bookPrinciples, and Amazon suggested I might also like a book by Tony Robbins. This made sense to me because I know Dalio and Robbins are friends, and the front cover ofPrincipleshas a testimonial blurb from Robbins. What didn't make so much sense was that Amazon also recommended the OXO avocado slicer. But you know what, I actually bought the avocado slicer because, well, I needed an avocado slicer!

While this is arguably a little creepy that Amazon knew I needed this seemingly unrelated product, consumers are becoming increasingly comfortable with creepy as long as brands are anticipating their needs and offering products they really want. Andsurprise, surpriseI loved the avocado slicer almost as much as Dalio's book!

I regularly purchase items on Amazon that are meant to be given as gifts. In the past, after making these purchases, Amazon would add these product categories to my profile and begin recommending similar items. Needless to say, this filled my emails with promotions that weren't at all targeted to me.

Not too long ago, Amazon added the ability to tag any purchase as "being given as a gift"even if I didn't use their gift wrapping/blind receipt service. This functionality allows me to provide detailed feedback to Amazon about my purchases, which makes sure future recommendations are on point.

Amazon Prime day, declared a day with better deals than Black Friday. I took a peek, and so far it's pretty good.The strategy for Amazon behind Prime Day was to offer so many deals that it would encourage more users to upgrade to their premium service.Think of it as a giant "loss leader" to get people into the store to buy (but a strongcustomer acquisition strategy).

Now customers get to try two-day shipping. The benefits of two-day shipping might encourage customers to change their purchasing behaviour to buy more things on amazon.The other services that Amazon offers: music, movies and book subscriptions (like a Netflix competitor) will lead consumers to spending more time in the Amazon ecosystem, and ultimately lead them to spend more money. These tactics not only create additional revenue which forAmazon, which is obviously good.It will help them lower overall costs of shipping by having economies of scale.It also gives them good data on where to open up new fulfillment and distribution centers.This helps to build a competitive advantage against their competitors, and will help them gain market share in several different categories.

I got myself anAmazon Primemembership, and I actually bought things before the sale because I liked the idea of two-day shipping. Their business strategy team knocked the ball out of the park with this promotion, and I think it's going to pay huge dividends for Amazon.

Question

1. Read and examine thecasethoroughly.
2. Take notes, highlight relevant facts, underline key problems.
3. Focus youranalysis. Identify two to five key problems.
4. Uncover possible solutions.
5. Select the best solution.

Q1. Describe the different ways Amazon has adopted for Customer acquisition, retention and satisfaction - to become one of the most successful companies on the planet. (5 Marks)

Q2. What is the impact of Amazon Prime day on customer acquisition strategy ?(5 Marks)