amazonsuccess.ppt 138KB Jun 23 2011 07:24:06 AM

Retail Success Factors
Amazon.com examples
Chuck Ehrlich
Chuck@EhrlichOrg.com

415-441-7140

© 1999, Chuck Ehrlich all rights

1

Internet Retail
 New ballgame
 Different rules
 Look at what’s working

© 1999, Chuck Ehrlich

2

Amazon.com

 Combining multiple factors to
achieve success

© 1999, Chuck Ehrlich

3

What factors or activities define Amazon’s business ?
Unlimited
virtual
shelfspace

Wholesale
relations

Large
Selection

Cross
Marketing

High
Advertising

Publisher
Relations

Superior
service
reps

High
Customer
Service
E-mail
confirm

CoBranding

Less

Employees

Low
Overhead

1st
mover

Convenience
&
Ease of use

Easy
Search

Add useful
information
Customize

No hassle

return

Innovative
Technology

Low
inventory

Less real
estate

Brand
Share of
Mind

Large Customer
Database

Always
open

Always
there

Low
Price

Cost
Structure

Washington
State
Graphic courtesy of the Kellogg School, NWU

What factors or activities define Amazon’s business ?
Large
Selection

Low
Overhead

Convenience
&
Ease of use

High
Customer
Service

Brand
Share of
Mind

Large Customer
Database

Customize

Customer
Loyalty

Low
Price
Graphic courtesy of the Kellogg School, NWU

Cost
Structure

High Performance Service
 Web site is fast, reliable, and easy to
use
 Shipping is prompt
 Customer is kept informed

© 1999, Chuck Ehrlich

6

Branding
 Short, clever name/URL/tag line
 Good: Amazon.com worlds largest

bookstore
 Poor: Barnesandnoble.com
 Poor: Cyberian Outpost

© 1999, Chuck Ehrlich

7

Networking
 Referral program
 Co-branding and cross promotion

© 1999, Chuck Ehrlich

8

Community
 Posting customer reviews with
author reviews
 Customer gifts

 bookmarks, note pads, cups, etc.

 Promotion where customers
collaborate with famous authors

© 1999, Chuck Ehrlich

9

Personalization
 Extensive customer profiles
 Recommendations
 Other readers who bought this title
also bought
 Other readers who bought this
author also bought

© 1999, Chuck Ehrlich

10

Trust
 Guarantees
 Return policy
 Great customer service

© 1999, Chuck Ehrlich

11

Extended Service





Extensive subject index
Search
Ability to order before publication
Out of print search

© 1999, Chuck Ehrlich

12

Logistics
 Fast, reliable, inexpensive shipping
 Originally no inventory, use Ingram

© 1999, Chuck Ehrlich

13

Price differences between Amazon and Barnes&Noble
Date

Titles with different
prices (125 total)

Total price difference on
125 titles (Am-B&N)

17 Mar 97

124

$ 177.87

24 Mar 97

122

$ 94.29

5 May 97

125

$ 133.86

13 May 97

Barnes & Noble enters online business

10 Jun 97

54

$ -10.32

1 Jul 97

52

$ -10.73

4 Aug 97

53

$ -11.39

Source: OECD and Kellogg, NWU