What Is The Impact Of Digital Trends On Business Models Of Automobile Manufacturers?
Amazon is leading ecommerce company that also provides cloud computing. Amazon is based in Seattle, Washington in 1994. Amazon has grown from online book store to a retail company including electronic products. It is also the largest provider of cloud services that is PaaS and IaaS (Barrett et al. 2015). In this report, the analysis of digital technology and information use in Amazon is done to evaluate their digital strategies for future. The digital technology is the primary and an integral part of Amazon in shaping up its business strategy to reach large number of people. The digital technology in this report is focused mainly on its ability to provide value to Amazon’s products and services. The report will be further used for providing steps to be taken for Amazon digital strategies. The purpose of this report is to analyze the use of digital technology to add benefits and values to the services and products provided by Amazon.
The report is structured to describe use of digital technology for business strategy, changing of organizational strategy and ensuring continuous customer connection in Amazon. The analysis of details of customers, competitors or Amazon itself is provided to get an understanding of digital technology use in Amazon.
The digital technology is rising very rapidly and it has taken center stage in every organization from past few years. The immense growth of digital technology is driving every sector and is expected to grow. Amazon is the leading organization that has been utilizing digital technology and has shown growth due to the technology (Booth 2015). The further sections will describe how digital technology has provided alignment between organizational, information and business strategies. The use of digital technology to keep consumers connected. The other sections describe the use of digital technology in Amazon to collect and process understanding about its consumers, Amazon’s operations and competitors.
The development in digital technologies that are used by Amazon to strengthen its organizational and business processes are the given as follows.
AmazonFresh- AmazonFresh is used for ordering grocery and delivering it to the customer within one or two days at their location. This technology is used for customers residing within the serviceable areas of Amazon where they can provide the delivery of grocery (Collins and Halverson 2018). The delivery fresh food to customer’s location is delivered through this service. This service was launched in 2007 and has expanded from its initial place, Seattle, to other places, SanFransico, SanDiago, New York, Philadelphia and other places.
Amazon Prime Air- Amazon Prime Air is the coming age technology introduced by Amazon. Amazon is going to introduce Amazon Prime Air which is known as delivery drones, unmanned aerial vehicles in near future. This technology is going to be the major boost for Amazon’s business strategies as it will provide quick and effective delivery of orders within 30 minutes and without human interference (De Jong and van Dijk 2015). This technology will not involve setting up of multiple distribution centers in each and every neighborhood. The delivery drone, as claimed by Amazon, will provide delivery of orders to the customers without any human interference and within 30 minutes (Montag 2017). However, delivery drones are surrounded by controversies but Amazon assures that it will be viewed as more valuable and effective drones.
Amazon Fire TV- Amazon Fire TV is used for streaming live TV, customers can watch large number of movies and shows that are queued and it is a well-appreciated gaming device. This technology is introduced by Amazon to enter into the market where its competitors such as Apple’s TV and Google’s Roku, are booming (Deegan and Sutherland 2016). Amazon Fire TV has garnered quick market share and it is rapidly growing.
Amazon Fire Phone- Amazon Fire Phone is a Smartphone introduced by Amazon to enter into the market of Smartphone. The operating system of Amazon Fire Phone is Fire OS that provides Dynamic Perspective that creates 3-D appearance and customer service for 24 hours (Dempsey 2015).
The above technologies are introduced and implemented by Amazon to achieve its goals and objectives. Amazon has improved a lot from its initial periods and it is recognized as one of the leading company across the world.
The values added through use of digital technology in Amazon are done through following ways.
Enhanced customer service- The customers are the important factors in the business growth of Amazon. The focus of Amazon is always been to improve customer satisfaction. The customer satisfaction helps to understand the business more briefly. The digital technology has benefitted Amazon in various ways. The first one is improved experience of in-store and returns are free and effortless (Dodgson et al. 2015). The second one is digital channels use has been improved leading to higher expectation and standards for customers and retailers respectively. This shows that technological advancement has provided growth in the business of Amazon through improving customer services.
Easy and simplified checkout- The digital technology has disrupted the working process of Amazon in several ways. The digital way to purchase is the most important disruption in Amazon. The other digital strategies that are implemented in Amazon are convenient services like direct purchasing (print circulars), order in one click and storage of billing information is secured (Hanelt et al. 2015). The point of purchase is improved in Amazon where new and advanced experiences have taken place that is impacting return on investment and improved checkouts. The checkout is the most important factor in any industry. This is because the checkpoint helps to interact with customers and make decisions.
Improved shopping experience- The shopping experience has been improved in Amazon due to the implementation of digital technology. The improved experiences such as interactive display of products, dynamic personalization and rotating have driven the organization to satisfy the demand of customers (Iansiti and Lakhani 2017). The online shopping on Amazon with personalized store experience has contributed to provide customers satisfaction.
Value added services- The value added services offered by Amazon have improved its organizational business. The value added services are helping Amazon to develop strong consumer loyalty contributing sustenance in the competitive world (Irani 2015). Amazon has utilized digital technology to provide value added services however there are still opportunities for these services.
The use of digital technology to keep consumers connected to the organization, Amazon has implemented various strategies. Amazon has focused primarily on customer retention at its top priority. These strategies are described in the following points.
Digital technology serving different customer segments- The implementation of digital technology to cater the different needs of different people has been offered by Amazon. Amazon has not only focused on a particular segment, but it has entered into the market to cater the need of large customer segments (Kane et al. 2015). The customers’ demands are changing with the growing trends and thus to satisfy their need Amazon has introduced different technologies. This helps to interact with people and understand their choices.
Appropriate Digital channels- The appropriate digital channels have been adopted by Amazon to connect with the customers such as social media strategy. They are keen to adopt more new and advanced technologies however they are still the top player in the current market with digital strategies (Kenney and Zysman 2015). They are using social media strategy to connect with the customers directly and understand their demand and options. Amazon now wants to extend its digital strategies to reach large section of people.
Adding value to the customer- The customer’s view and opinion are kept first on mind when the products are launched or a digital technology are implemented. This helps to ensure that the products and services are according to the customers demand (Donnelly 2017). The decisions are made from the retailer side such as selling which product at what price or whether to include any offer. Amazon is using its digital technology to match the customer’s need (Kenney and Zysman 2016). The hassle free return and replacement are also the aspects taken into account by Amazon. However, Amazon still has opportunities to improve its customer retention by providing more transparent business strategy to the consumers.
Measuring the trends- The trends are periodically changing and thus Amazon uses cloud computing and big data analytics to improve its data collection to analyze the latest trend. This is done through analyzing various platforms such a social media platforms to gather latest trends (Keyes 2016). This will help to analyze the data and helps to sort the data that are important for the organization to implement in its working process. This helps Amazon to understand how to drive its business by getting an insight into the latest trends.
Space for new technologies- Amazon has so far introduced digital technology to grow its business and it is currently trying to adopt the coming age technologies. Amazon has entered in the cloud computing market that is Amazon Web Services, and it has become popular in the current market (Schor 2016). Amazon has been the most popular and widely used retail company and it has been growing since its foundation. Amazon has introduced various digital technologies and strategies and it also making space for new technologies to be introduced.
Online conversation- The online conversation is the implementation in Amazon that has helped its business to grow to satisfy the need of consumers. The online conversation has helped Amazon to listen to the customers query and provide solutions to them. This helps to understand the customer’s requirements and opinions to make better working process (Schüll 2016). The conversations on social media also help to make the business to reach maximum people. The most disrupted digital technology in Amazon is social media strategies. This strategy is helping to grow the organizations productivity and its outreaching to maximum people.
Working with third party retailers- The third party retailers’ involvement has proved a great benefit to Amazon. This has helped to cater the needs of customers. Amazon has allowed third party vendors to make selling on the website. This allows making its business reach to every customer at different locations including remote areas. Amazon supports legal and authorized third party retailers to sell on Amazon and thus customers feel more secure in buying products from Amazon (Turkle 2017). However, there are some issues with third party retailers selling on Amazon which should be taken into account. Thus, improving these issues through digital strategies are also the next step for Amazon.
Digital technology helps in improving customer service and engenders the customer loyalty. The digital transformation of Amazon website has pushed the business to mobile shopping. Customers are the most valuable asset for any company. The company survives and grows only when it has customers (Westerman and Bonnet 2015). With the use of E mail customer could receive quick respond to their requests and needs and improve the customer services. The website of Amazon has an area where customers can put their questions and answer to it or even could seek answers from other.
Customers are not always right as they mostly get confuse of the product they like to purchase. Amazon has a customer relationship management software with a sophisticated data-gathering tool through which the relationship of the customer can be manage easily. Communication has been made unify through which the user can see the customer who has left a voice mail and send an e-mail having the same request in their account few days back (Westerman, Bonnet and McAfee 2014). Amazon has generated loyalty for better customer interactions.
An annual study report of Future Retail has understood the expectation of the customer and increases a seamless shipping, delivery and returns of the order. Today Amazon offers free and one-day shopping for the customer. Also when customer has to return the order, it provides free online returns and exchange of item (Pearlson, Saunders and Galletta 2016). Customer satisfaction measurement is a leading performance indicator which provides a net profit and return on assets. If customer is satisfied then the benefits will be more for the company. The better customer interaction offers a good quality services and products to customer and is responsive to the customers.
When looking into the Amazon’s revenue model, it performs efficiently against revenue per visitor and it is the key measures for the Amazon website
The figure gives a latest business model annual report. It has a great Digital Agility. Amazon has decided to measure their program and analytically make investment. Amazon has explained the business models from a long-term perspective and continues to make investment decisions with a long-term market leadership considerations rather than considering the short-term profitability (Collins and Halverson 2018). The latest innovation in their business model is the launch of Amazon Go store in which no checkout is required.
The user of the Amazon Go app simply enter into the store, select the product as per their need and go without any lines and checkout. The company had a range of business model innovation that focuses on hardware and new services such as Echo, Smartphone, TV, Kindle e-readers, Fire Tablet, Amazon fashion, grocery delivery and Amazon Web Services (AWS) (De Jong and van Dijk 2015). It has an annual membership program which is very common and knows, that is the Amazon Prime which includes unlimited free shipping. It also offers diversification to all media service that has access to unlimited instant streaming of movies and TV episodes (Inagaki and Lewis 2018). The company now provides e-commerce services, website development, cloud-based infrastructure and many more services.
Today Amazon has started its own Air Cargo Operation and acquire up to 20 767-freighter jets while talking and negotiating with Boeing Company, through which packages will get deliver to customer in and around U.S domestic market (Dempsey 2015). In the present date, most of the parcels of Amazon are ship through United States Postal Service, United Parcel Services and FedEx (Dodgson et al. 2015). The airfreight industry would seismically change with the change in in-house logistics venture. Through e-commerce companies majority of the air cargo activity has come up.
In-house delivery does three things for the company of Amazon. First, Amazon needs capacity to in-source transportation logistics for the growth of the company as third-party carriers are not able to provide enough capacity for Amazon (Irani 2015). Secondly, Amazon has control over the delivery chain which gives a better customer experience. Finally, Amazon sells excess capacity with profit to others by building an infrastructure for itself.
The simple example can be taken is the Amazon Web Service which has today proved that it is a major source of revenue. Today Amazon has set up their own storage system to save their money (Waters and Bullock 2018). In the year 2014, there was a net sale of $25.4 billion with a total of $100.6 billion. According to the Amazon Company, annual sales rate was growing to 18% (Kenney and Zysman 2015). By the end of the year, Amazon had a market capitalization of about $316 billion. With some of the shipping services and massive logistics, Amazon has signal the fleet of aircraft and decided to take in-house for it.
According to the report of David Vernon who is an analyst at the Bernstein Research usually track the shipping industry. The estimation provided that USPS handled 40 % volume or 150 million items of Amazon. In the meanwhile, UPS handle Amazon shipment with an estimation of 20% - 25 % (Schüll 2016). On the other hand, FedEx had ship 15 % to 20 %of Amazon’s annual load. These reports are according to the equity research firm. Amazon (AMZN) in the year 2014 itself had purchased a stake of 25 % in the French company and presently it is buying the rest. UPS still have a good relationship with Amazon (Westerman, Bonnet and McAfee 2014). If looking back into the past two years, ColisPrive purchase is the latest move by Amazon and ColisPrive is a French package delivery company (Kenney and Zysman 2016). Yodel is a U.K shipping service in which Amazon has purchased a 4.2 % of the stake.
From the report it has concluded that Amazon.com is the world finest online retailer site. As shown in the report the competitors like e-bay and best buy are very close but could not reach nearest to Amazon.com services. Thus for more growth of Amazon some recommendation has been made for Amazon.com that are as follow:
Customer Loyalty: There are buyers of Amazon’s who are repeated customer and loyal to Amazon. However, the risk comes when the competition grows and company loss the loyal customer.
New Product Innovation: To keep the loyalty of customers’ experience, Amazon has to think out of the box and come with ideas to bring some new products. This can make the customer feel satisfy and to be loyal to Amazon.com. Customers are getting better quality and services whenever they make any purchase from Amazon. This will not always remain same in future. In today’s world there are people who always ask for more. They are never satisfied to what they get. Thus, before customer knows anything about the product, Amazon is quite smart enough to understand the need of the customer.
Market Competition: With the global market change business competitors are growing rapidly and this competitor are trying to take Amazon down by investing a large amount in the market. It is a very big challenge to become a number one retailer shop and has to maintain the consistency in the market.
New Technology Integration: Amazon has to retain its domination in the market with a friendly technology and need to be adaptive to the market. Drone delivery system is a new technology of Amazon that plan and invest significant amount of money for the future technology. Like a spread of light, there is a huge progress in technology today.
Expansion in Global: From long period time, the business of Amazon has expanded around the world. In number of sectors there may be a significant strain such as supply chain, inventory, management and in the market place of Amazon. In the annual report of 2013, Amazon could not be successful in making an effort for expanding the international market segment. Due to the economic and political conditions, the challenges are huge for the international market. It is now essential to better understand the behavior and needs of the customer by upgrading the e-CRM and make investment towards the information provided by the customer.
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