Introduction
An e-commerce strategy is important in order to determine the procedure and facilities that are essential for processing monetary transactions through the standard data connections (Evaluba, page 5). This case deals with the e-commerce website Amazon.com and creating a suitable e-commerce strategy and structure for it. Today, Amazon is one of the biggest companies in the world with revenues of almost $15 billion in 2013 (Forbes, 2013).
An E-Commerce strategy for Amazon and the reason for its selection
E-Commerce strategy that could be applied to Amazon will be based on ‘Personalized Digital Media’ strategy. Personalization and page speed is gaining importance in today’s consumer world and it is one of the powerful tools to leverage any online business like Amazon. As Amazon is one of the largest online retailers in the world, it must focus on the power of ‘keyword search’ used by its customer to find a particular product online and therefore its focus should be on - Page speed. The time it takes for a webpage to load can have a large impact on user experience and overall sales. (For example: greater the time a page takes to upload, more likely it is for a user to surf the internet and look for other online sites to purchase a particular product).
Secondly, Amazon must focus on making its online shopping experience more ‘personalized’ by making it’s interface more user friendly, providing customized filters as per user’s need/demand by creating easy search-bars and most importantly providing product reviews & ratings by other users which highly impacts sales of a product online. Thirdly, it should influence its users to purchase more than just one product. Bundling similar products together based on a user’s need leads to increase in average order value. The above mentioned strategy can make Amazon as one of the most formidable and successful e-commerce website in the world.
Other viable strategies and its comparison with the ‘Personalized digital media strategy’
Strategy of Investing in Mobile technology: Mobile technology is becoming better every day, thanks to the rapid increase in the sales of smartphones all across the world. Also, mobile commerce is growing rapidly at a rate of over 130 percent annually (Forbes, 2014). If an e-commerce major like Amazon lacks a secure, robust and a safe mobile platform, then it would lose numerous prospective customers who prefer to shop through their smart phones and this would eventually result in a decline in their overall sales. In order to remain ahead of its competition, an e-commerce company such as Amazon needs to create a robust mobile platform which can be easily and safely used by its customers and it can be a convenient alternative to online shopping.
Comparison of ‘Mobile technology strategy’ with the ‘Personalized digital media strategy’
Although ‘mobile technology strategy’ is very useful and important for Amazon, it needs to first work on its ‘personalized digital media strategy’ which would also include mobile platform. A personalized mobile page would be beneficial to the user as it would include facilities such as delivery notifications, delivery tracker, customer support, and support chat along with customer feedbacks.
Strategy of improving and maximizing ‘logistics efficiency’
For a company that is as big as Amazon, it is important that it effectively manages its logistics in order to maximize its on time delivery performance. It is extremely important to handle return orders, exchanges and same day delivery in a precise manner. Otherwise, the reputation of the company may suffer and this may lead to customer dissatisfaction.
Comparison with the ‘Personalized digital media strategy’
Although focusing on logistics would be a great idea, it would be better if Amazon ‘sub- contracts’ the logistics part. Amazon needs to ensure that it carefully ‘selects’ and ‘trains’ its logistics partners and brief them as to what is expected from them. Also, it needs to collaborate with good and established logistic companies as they represent Amazon while delivering the goods to the customer. As compare to the ‘personalized digital media strategy’ the ‘logistics strategy’ is not that vital for the e-tailing company.
Web 2.0 technology and its advantages
Web 2.0 is the current way in which the companies run their websites. It is nothing but a way to increase interactions and enhanced communication between the companies and its end user, unlike the earlier times when companies were running static websites without any two – way communication channels (Tech target, 2014).
There are several features that Web 2.0 technology offers to companies who use it for running their websites. Web 2.0 technology offers the following competitive advantage to the companies as compared to those who do not use it:
Interaction between the company and its customers
It is a prerogative of any organization to ensure that it understands the needs, aspirations and wants of its customers. Also, it is equally important to measure and analyze the customer feedback and make the necessary improvements in the product or service. Web 2.0 technologies offers this interactive feature which allows the customers to interact with the company using techniques such as content sharing, collaboration and community based inputs.
Combining the power of social media and customer interaction in a single platform
Today, the social media has become one of the most crucial and biggest aspects of the digital media. Whether it is Amazon, Walmart or Alibaba, every company now has a considerable social media presence. Social media platforms such as Twitter, Facebook, LinkedIn etc. are the biggest social media platforms present today. The social nature of Web 2.0 is a major differentiating factor between it and normal World Wide Web.
Top Mobile and Social Media Technologies for organizations
The top three mobile technologies for organizations would be:
- Cloud storage and remote communications: With the help of cloud storage, you can store and share your work files via google docs, Apple’s ICloud service, Drop Box and other cloud computing sites.
- Mobile applications.
- Mobile transactions that involve cashless transaction.
The top three social media technologies for organizations would be:
- Networking: Social media platforms such as Facebook and Twitter enable networking.
- Instant Messaging: Social media platforms such as Yahoo, G- talk, WhatsApp, etc. enable instant messaging.
- Video Conferencing: Social media platforms such as Skype, Viber etc. enable video conferencing.
An ideal mobile and social media technology for Amazon
Amazon is an e-commerce company that needs to ensure that its customers always remain connected to it. In order to ensure better connectivity, it needs to ensure that it’s networking (social media) platforms are designed in such as manner in which they can act as a bridge between the company and the customer. It needs to build an effective two way communication with its customers.
Also, Amazon needs to ensure that while its customer uses their mobile phones to purchase its products, they can easily do cashless transactions without any payment-gateway errors and with ease. Amazon needs to ensure that its mobile transaction gateway remain user friendly and without any bugs.
Because of the above mentioned factors, Amazon needs to consider ‘Networking’ along with ‘Mobile transactions’ as its most vital social media and mobile technology.
Key IT Strategies for Amazon
An IT strategy is an elaborate and a detailed plan that the Information Technology professionals develop and utilize in order to guide their organizations (Tech target, 2014).
If we talk about Amazon, then there can be the following three IT strategies that can provide it a competitive advantage when compared to its competitors such as e-bay, Alibaba and Walmart.
- Technology management and infrastructure: It is absolutely essential for Amazon to ensure that it uses the latest technology in designing its web pages as well as mobile applications. It needs to ensure that there are no technology glitches during peak hours and holiday seasons when the user activity increases to a high level.
- Seamless integration of social media platforms such as Facebook, Twitter and Instagram with the web pages by utilizing Web 2.0 features to the maximum. Amazon needs to ensure that its IT creates such a platform that enables its users to easily and conveniently interact with the support staff regarding issues such as delivery tracking, payment, cancelled orders, refunds and rebates.
- Appropriate vendor management: Amazon needs to create an IT platform that covers and addresses the issues of all its external and internal vendors and stakeholders.
In order to maintain a distinct competitive advantage over its rivals, Amazon needs to adopt a strategy which focuses on its technology management and infrastructure. It is extremely important for Amazon to maintain technological superiority by providing speedy transactions, high web page download speed and easy customer interface.
How can an ERP (Enterprise Resource Planning) and loyalty schemes enhance value of Amazon?
In order to manage their value chains companies such as Amazon have invited and approached software companies such as Oracle and SAP to create and design an elaborate enterprise resource planning (ERP) system that can handle functions related to transactions, customer feedbacks, customer database, customer profiling and other functions (Kotler, p 407a). With the help of an ERP software, Amazon can also develop a comprehensive customer relationship management (CRM) module which can be used to record, analyze, measure and store customer data. This data can be used by the e-commerce major for its future activities and planning.
Loyalty schemes such as discounts, exclusive products, one-day delivery facility etc. create an enhanced ‘value’ to the customer. This value would enhance customer loyalty, customer delight and will result in higher and better revenues for the company. Also, loyalty schemes would attract the other customers to join the program so that they can also avail the related customer benefits.
How can social media channels such as Facebook, Instagram and Twitter increase sales for Amazon?
- Displaying and promoting the official ‘Facebook’ and ‘Twitter’ page of Amazon. The social media, today, has become one of the most effective ways to communicate. Emails and telephones are no longer the primary way of electronic communication. Consumers today prefer to ‘post’ messages or ‘tweet’ their feedbacks and requirements by sharing it with their friends, relatives and colleagues (Wind chimes, p05). Amazon can ‘promote’ its Facebook and Twitter pages to increase its consumer base and build customer loyalty. It can use its Instagram page to promote various new product launches and loyalty programs.
- Creating and running the contests on social media channels such as Facebook and Twitter: Contests are one of the best ways to generate publicity for any company. Amazon can utilize this great social media facility to run daily contests on its official social media pages. These contests must ideally run for a single day and winners must be offered attractive prizes such as free products listed on Amazon or discount vouchers. Running regular contests will be a great sales strategy for Amazon.
Conclusion
There is no doubt that Amazon is of the biggest and leading e-commerce company in the world today. With its robust supply chain network, logistics support and a loyal customer base it is one of the very few companies that is ready to brace the future challenges of business. In order to ensure that it does not falter in its strategic path, the top management of Amazon needs to ensure that it sticks to an appropriate strategy which revolves around the achievement of technological excellence and digital personalization and create a structure that is supported with a robust IT program.
References
Kotler, P (2011). Marketing Management 4th ed. Washington. Pearson. Print
Wind chimes Communications (2013). Social media hand book. Mumbai, India. Print.
Veronica, K (2009). Evaluation of an E- Commerce Strategy. Hocshchsule Furtwangen University. Print.
Tech target. IT Strategy. Retrieved November 25, 2014 from www.techtarget.com
Forbes. Mobile Technology. Retrieved November 26, 2014 from www.forbes.com
Forbes. Amazon.com Retrieved November 26, 2014 from www.forbes.com
