It’s nearly impossible to have a conversation about Internet business models without somebody using some variation on the word, “Amazon.” Whether used as a noun (“We’re going to become the next Amazon!”), an adjective (“Their advantage in the pet food category is Amazonian”), or a verb (“Those guys had better get themselves a web site or they’ll get Amazoned by the competition”), the word “Amazon” has come to stand for fast, dominating, e-commerce success.
OK, they’ve never had a profitable quarter, and yes, there is a lot of hype around the company. Behind all this however, there are also many good reasons to respect — and pay close attention to — what Amazon has done with its web site. Because more than any other company,Amazon has uncovered the circumstances under which the web is “better than the real world,” and worked diligently to take advantage of these situations in building a service that makes it easy for their customers to do business with them.
Here are just a few examples of how Amazon leverages the unique qualities of the web:
++ SELECTION. Amazon boasts that it has, “Earth’s Biggest Selection,” of products, offering over 18 million unique items. Any way you look at it, that’s dozens of times more selection than any physical world retailer can hope to match. Anyone who was ever driven to a store to be told that, “we don’t stock that item,” can appreciate the value of Amazon’s ability to virtually eliminate the chance of that real world phenomenon happening at its web site.
Amazon: 1; Real World: 0.
++ FILTERING. Go to Amazon, enter in “Jimmy Carter,” and you’ll bring up a list of 96 different books, sprayed across the categories of politics, religion, aging and poetry. Now take a walk over to your favorite physical world bookstore and try the same thing. Even if you could find all 96 books, you would have to visit at least four different parts of the store to pick them all up, based on how that particular bookstore chooses to organize its inventory. Online at Amazon on the other hand, you can instantly create a virtual “Jimmy Carter Department,” bringing together all relevant titles based on your personal preferences.
Amazon: 2; Real World: 0.
++ COMMUNITY. Wander the music aisle of your local bookstore for a while, and you may be lucky enough to strike up a conversation with a stranger who shares your passion for Sixties-era Rock `N Roll. With that connection now made, she may be able to help you decide whether to purchase the “Gerry and the Pacemakers Retrospective” that you hold in your hand. Wander the “Customer Reviews” section of any title that Amazon carries, and you can read unfiltered, first hand comments from other customers who have read the same book. With over 17 million registered users, the likelihood of this latter approach adding some value to your shopping experience is exponentially higher.
Amazon: 3; Real World, well, you get the idea.
++ PAST HISTORY. I’ve been shopping at the Sears in North Reading, MA for over ten years, and yet each time I walk in there to buy something, they treat me as if I’ve never been there before. Not only do they not personalize my experience in any way, but they apparently keep no record of my past purchases. When I went in recently to return a broken lawn sprinkler with a one year guarantee, I had to first fish through a year’s worth of credit card receipts to prove when I bought it. My friends at Amazon on the other hand, let me instantly see the detail of an entire year’s worth of my past purchases. When I return an item, the question of when I bought it doesn’t even enter into the conversation, since we can both see my personal history.
++ PERSONALIZATION. In the past year I’ve purchased books from Amazon on the topics of email marketing, home maintenance, and how to discipline a four year old (don’t ask). Each time I revisit the site, it suggests related books that I may be interested in purchasing — all based on my past activity. Not only is this an extremely cost effective way for Amazon to market specific products to an empirically targeted customer (i.e. me!), it also enhances my experience by showing me selections that are most relevant to my own interests (and in the process, lowers my propensity to shop elsewhere because I don’t want to have to “teach” another web site what I like). Going back to the Sears example, imagine for a moment what it would be like if they reconfigured the store to match your interests each time you visited!
WHAT THIS ALL MEANS FOR YOU: Many people talk about the web as a way to cut transaction costs, build relationships and extend an organization’s reach beyond its local area. All of these things are true, certainly. For my money however, the real beauty of the web — and the time when it is at its most compelling — is when it outdoes the physical world.
Remember Amazon as you build and develop your own web sites. Instead of simply translating your offline practices to the online world, look for opportunities to outdo the physical world, and make it easier for your customers to do business with you in the process.