How Amazon Became The E-Commerce Giant It Is Today
Time Magazine gave Jeff Bezos their person of the year award in 1999 for being the person to come up with Amazon. Today, Amazon is a one-stop-shop for anyone wanting to buy anything online, as well as a massive video and audio streaming agency and a member of the “Big Four” of tech alongside Google, Facebook, and Apple. The Telegraph muses that the business was initially named “Cadabra,” but Bezos changed the name soon after incorporating the company because a lawyer misheard it as “cadaver”.
Amazon’s dominance over the retail market is strange, considering that the initial idea that Bezos incorporated was for that of a bookstore. And what a bookstore it was. Amazon started simple, and the home page of the business back in 1994 would be unrecognizable to the 100 million people who utilize the company’s Prime service (according to Business Insider). The company moved from being an online bookseller into being a retailer. In 2001, it made its first profit, showing that Bezos’ business model was sound. Today, the company has a 5% share in total retail spending within the United States, based on estimates by Bloomberg.
Who’s this Jeff Bezos Guy Anyway?
When Bezos came up with the idea of Amazon, it was a knee-jerk reaction to hearing how fast the internet was growing and trying to figure out a way to capitalize on that massive development. He was an investment banker with D. E. Shaw & Co. on Wall Street before deciding to take the plunge into internet marketing. The plan for Amazon started with a list of potential products that Bezos could sell online, including books and CDs which he eventually settled on. He resigned from his job, passed up a fat bonus, and moved to Seattle where he set up Amazon in the garage of their rented home. Today Bezos is considered one of the richest men on the planet thanks to what he did with Amazon. Online retailers look to it as an example of how an internet business should be.
Why is Amazon so Popular?
Quartz mentions that Amazon is so successful because it puts customers first. But this isn’t the only reason why Amazon dominates the online retail market. The Amazon e-commerce strategy bases itself on the customer but also understands how to meet the consumers’ needs. One of the earliest innovations Amazon offered was the ability to read reviews of a product that was purchased by another consumer. This rating and review system is a significant part of decision-making for informed customers.
What’s more, Amazon’s system allows it to suggest useful items that can be bought together, upselling to the customer, and anticipating the customer’s needs. The Amazon e-commerce strategy revolves around giving the customer exactly what he or she wants. In addition to these distinct factors, there are underlying factors that boost Amazon’s popularity, including:
Brick and Mortar Store Closings:
CNN Money mentions that a large volume of retailers are closing down their brick-and-mortar establishments. While this might not be due to direct competition from Amazon, it also means that in places where those stores existed, the residents now have to depend on Amazon to fulfill their needs.
One of the things that set Amazon apart from other similar retail sites is how extensive its supply of products is. Retail TouchPoints estimates that Amazon carries upwards of twelve million products supplied by more than 185,000 suppliers. With such a wide variety, a user could theoretically find anything he or she wanted in a single store and buy it with a single click.
Amazon’s promise of two-day delivery makes it unique in the online space. While the two-day shipping delivery isn’t from the time of order, but rather from the time of supply, the company does offer a guaranteed delivery date to consumers. If it misses the period, it usually refunds the users the shipping cost or a few dollars of promotional credit, according to Deal News. Prime customers now have access to free one-day shipping which makes it worthwhile for users who shop at Amazon regularly.
Amazon’s Value Today
In January of 2019, CNBC reported that Amazon surpassed Microsoft in value, making it the most valuable company in the world. Amazon’s current stock price sits at a whopping $1,800 per share, and projections for the future are bright for the company. If the company continues expanding and delivering on its promise to customers, it’s highly unlikely that it will see a slump in value any time soon.
What’s Next for Amazon?
According to MSN, Amazon’s intentions for expansion include such novelty ideas as cashier less outlets, AI-powered robots for the home, and extension of Alexa to be a companion and voice-activated assistant. The company also intends to start doing automated delivery through an army of drones, and a revolutionary (and possibly controversial move) into the world of pharmaceuticals. With what Amazon has managed to achieve so far, none of these seem farfetched, and we may see one or more of these innovations come on stream within the next five years. The only question left is, “Is there anything Amazon can’t do?”