What Makes Amazon.. Amazon? Unraveling the Secret of the Ecommerce Giant
According to Amazon’s VP, Alex Szapita, the secret is not on technology neither is related to high investments. Customers are the answer.
The story of Amazon and its clients was what packed the main auditorium of the Ecommerce Brazil Forum. Thousands of entrepreneurs and ecommerce enthusiasts were there to listen to Alex Szapiro, VP of the company who saw its valuation cross $900 billion this year.
Despite most of the audience could have expected, topics related to state-of-the-art technology, advanced resources and the power of such a giant company as Amazon remained in second place.
As indicated by the name of the Amazon conference, what made Amazon Amazon is their strong mission of placing the user as the protagonist in all moments, from big business decisions to small daily issues.
Szapiro’s biggest challenge was demonstrating how philosophy allowed the 23-year company to outshine their competitors and how the principle could and should be routinely applied even in companies not as big as Amazon.
Amazon’s VP successfully achieved his goal and gave the audience a lecture about customer experience. And I’m here to tell you all about it.
The Story of Amazon
Just like so many other tech-giants, Amazon also had that “je ne sais quoi” going on at the very beginning of the operation, with a few people doing a lot, working late and hard in a garage.
It was 1994 and Bezos, aged 30, was an employee in a Wall Street company with a nice senior VP salary. But something was lacking. Noticing the fast growth of the Internet, Szapiro spotted an opportunity of changing something. He left his job, packed a few bags and moved to Seattle with his wife, MacKenzie Bezos.
The couple had both been maturing the idea of selling products through the Internet but didn’t know exactly how, or what. Books were one of the options, and that’s what they decided to sell. Cadabra, as in “abracadabra” was the name Bezos had chosen for the website, but the similarity to the word “cadaver” made the couple back off. Another option was Relentless and until today the URL relentless.com redirects the access to Amazon’s home page. The company was finally named Amazon after the largest river in the world; in fact, the company’s first logo makes reference to the river.
In the beginning, everything worked fine inside – guess where — Bezos’ garage. Rumour has it that the website server required such power that many of the house’s fuses were blown during those days. For every sale made, a bell was rung by the team (especially when it wasn’t someone known to them that completed the purchase). It didn’t take long for Amazon to start selling almost anything. Ringing the bell became impractical very quickly, as orders came from all 50 US States and more than 45 countries. In no time, the company outgrew Bezos’ garage and moved to a bigger place, but it still wasn’t enough; bunches of books and products piled up the new office’s desks.
Amazon’s first sales frenzy came in Christmas 1998, when all areas had to stay up all night, some even bringing even family members to help out with inventory management.
Since then, many ideas popped up were endorsed or rejected, but all of them had one thing in common: the user. The consumers for whom Amazon did it all. Since day one, the company placed their user in the center of everything. And this philosophy remains until today. One of Amazon’s buildings in the region of South Lake Union, Seattle, was named Wainwright because of the customer’s first customer, John Wainwright.
Obsession with customer satisfaction
In order to better explain the company’s success recipe, attributed to Amazon’s obsession in fulfilling their customers’ needs, Szapiro stated that all consumers are the same in their basic expectations and that there are 3 absolute truths o what they do not expect from a brand:
- Delay in receiving their goods
- Paying more for the products
- Not finding what they are looking for
These are the three items Amazon avoids on a daily basis in its relations with consumers. And it was based on the third one that the company noticed the need of offering more products to meet their customers’ requests. That’s why, in 2000, it was announced the brand’s marketplace, which changed the company’s whole business model.
This was just an example used by Szapita to manifest how Amazon’s customer-centric philosophy works in real life. But you might be wondering: “ok, but isn’t it a big business decision, isn’t it risky taking this customer-obsession too seriously?”
According to Alex, that’s exactly the point.
Balancing business and consumers needs is one of the major challenges of the company, but with maturity came the understanding that, at some point, sacrifices will be demanded in order to solve a customer problem.
This can be observed in the day-to-day life of the company, from the amount of time that is dedicated into improving the user experience (even when there isn’t a gross sales reflect) to more punctual situations, such as the following example mentioned by Szapita.
An employee received a message from a person through a social media platform. This user was informing her that they had found a Kindle in a taxi and wanted to return it to the device’s proprietary but would need Amazon to provide the owner’s information so they could deliver it.
What procedure do you think was followed by Amazon’s employee?
- Informing the person that it isn’t possible to access customers’ personal data.
- Directing them to the customer service center.
- Without getting authorization from superiors, locating the owner of the Kindle, sending them a new Kindle device and formatting the old one so that the thoughtful person who reported its loss could keep it from now on.
Yeah, if you’ve got how Amazon treats their customers, you’ve probably guessed that they went with the least obvious and more laborious option: C. That move cost the device time and a new device, nevertheless it solved the issue and offered a unique experience for both the customer who lost the device and the one who’ve found it.
This is also the reason why Alex was very emphatic when telling that Amazon always tries to keep an open communication channel with customers.
The relation among success and failure
So that all that way of acting made sense, another philosophy needed to be embraced: the “trial and error” philosophy.
Amazon has in its ADN a very particular way of dealing with mistakes within the company, even those that onerous to the business.
That’s because Amazon sees mistakes as valuable opportunities to learn. The employee that made a mistake today will be the one that will get it right tomorrow since they already know what not do, and will hardly make the same mistake twice.
“Failure and innovation are inseparable twins” Jeff Bezos, Founder of Amazon
According to the company’s policies, mistakes are closely related to innovation, and not being afraid of making them is the only way to endure the brand’s characteristic innovation.
For such a consolidated brand, surprising the audience is not an easy task, that’s why Szapita highlighted two main measures that point out where Amazon is heading.
The first is delivery drones, which is to become a reality in the United Kingdom. That represents a significant change in the delivery time of products.
The other big bet of the company for the future is Artificial Intelligence (AI). To talk about this, Szapiro introduced Alexa to the audience, a virtual assistant that helps users in several ways using an amicable, helpful and delicate tone, which translates very well to the brand’s values.
Szapiro finished telling the crowd that Amazon has always been a “Day 1” company, and intends to keep that way. The “Day 2” is irrelevant and presents a painful decline. At Amazon, every day is Day 1 for all employees, because each day they have a chance of making the difference in the life of a customer. Or thousands of them.
And that’s what, in essence, makes Amazon, Amazon.