Amazon - From most Customer Centric to Human Centric company on Earth

Not just A - Z of Products, but A - Z of Human Needs

Today’s brew is for Amazon Inc.,
Brew Date: 16th May 2015
Type: Served Hot – Redefine and Transform brew

Why with some decent transformation, Amazon can be one of the most Consumer Oriented Company to exist on Earth.

For a deeper understanding of Amazon’s business model: check out the following:

With a mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices,” Amazon offers merchandise, the number of which easily run in millions, and like its logo, delivers as many smiles as well.

Surprisingly, the Earth’s most customer centric company is not a technology company and where the circle might be turning it back to where it all started, it was in 1994, when Bezos, after reading a report about the future of the Internet which projected annual Web commerce growth at 2,300%, created a list of 20 products which could be marketed online. The Amazon model has moreover remained the same throughout till date apart from the fact that it has established itself in other lines of businesses as well which serve multitudes of Consumer needs, given the status quo, it wont be surprising to expect some other Bezos Like to be making a plan of another Amazon, the difference being it will be Earth’s most Human Centric Company.

The Brew will analyze Amazon majorly in 2 parts:
a) Business Analysis
b) Improvisation to Business Strategy
a) Business Analysis:
1)   ­­­­­Though Amazon’s mission is to be the most Customer Centric Company, it falls flat by a mile bcos of couple of reasons – Its not a *Technology Firm nor does it have an established competence in Human Behavioral Analytics which relates to pricing (though it has bits of both of these, some technology with pricing analytics supporting a dynamic competitive pricing). Its more of a firm, which focuses more on Ecommerce and Innovation. And for this matter it is Consumer Centric, and not Consumer Driven (the difference can is a real game changer).

The closest any competitor who may come to Amazon in all likelihood, can either be Facebook or Google, as both these firms deal with Human Behavior information (Amazon knows about Consumers buying a product / service, but it does not know nuances of what triggered that need, why etc, which FB or Goog can guesstimate, knowing Human behavior will help it map and understand the Needs and Triggers, essentially, building up an Ecosystem for Triggers and Need fulfillment on Core Model) and can be monetized by having a Ecommerce setup to their Core Businesses. Amazon, on other hand will have to travel some distance to establish itself as player, which can built a strong ecosystem to collect human behaviour information to lead to higher Monetisation of its Core Business.

*Technology enables in moving closer to Consumers, both in terms of Engagement and Understanding and Fulfilling their needs as well as cognitive surpluses, especially, when the Consumers are spending huge quantum of time with other Tech products.

2) Currently, Amazon’s competence is the Brand promise of delighting Consumer with plethora of products, speedy delivery and providing great customer support. We also need to consider that Amazon does Manages End to End lifecycle of the orders (where it has decent competence in operations). However, in the current era, Firms are focusing on micro segments of this complete value chain (sourcing, logistics, storage, fulfillment, delivery), effecting better and smarter solutions with the core competence of Technology.

The Mantra is to establish competence in the entire value chain of the Backend as well Front End to retain the delightful brand promise.

3) From the pattern, Amazon follows Linear Innovation Models, in its Core model as well its Acquisition strategy however has the potentiality is there for high disruptions and convergences.

4) Moving from a Customer Centric company to Human Centric Company: In the Offerings segment of Products, Services and Platforms, Retail (and not Amazon) scores well in Products and Services model where it has established its dominance (and to some extent some competence as well, and bcos of it, it offers Products and Services offerings as Platform as well).

However, it will have to replicate this model of success to other offerings mix of other business model, which are not linked to its Core business of Retail. Prime, TV, Tablets, Local Shopping, Content, Games, Instant Video, Appstore, Amazon OS, Web services etc

With the given width of Amazon’s offerings, along with some additions to its kitty (Handhelds, Computers etc), it will be successful in building up an (Hardware + Software) Connected Ecosystem which transforms it in to a Human Behavior Company, where leveraging this ecosystem it transforms to a Human Centric model resulting in Higher monetization, along with delivering on its brand promise Personalisation, Experience and Customer Centricity

The take away from the above is the Amazon has all the elements to be a transforming consumer oriented company however it has to build individual competences and acceptability in other products, services and platforms (primarily on the trajectory of Technology, Personalisation, Experience, Customer Centricity and its Variedness to serve Consumer needs), and stitch it back to the Core model and its competence, resulting in giving it a sustainable competitive advantage.

5) If Amazon wants to do something more meaningful with its claim of being Customer Centric, then it will need to have a Grander vision, on similar lines of Transforming & Fulfilling Human lives by being the most human centric company on Earth.

b) Improvisation to Business Strategy:
There are multiple ways to look at improvising the business strategy of Amazon, where one is Establishing Amazon as a Global End-to-End Fulfillment along with focusing on creating a competence in Tech and Consumer centricity (Aggregating Points 1, 3, 4, 6, 8 stated below), this approach requires redesigning the current operating model (and shaving the non focus areas off), and other one (includes all the points mentioned below) is a Larger play of being a Human Centric company.

1) To continue its dominance in the Core model of retail biz, Amazon has to establish, re-enforce and disrupts its competence in the value chain, both at an operational level and along with technology as well, especially the Fulfilling concept. Along side value chain disruptions, Amazon needs to focus on building Analytics on Pricing & Needs Personalisations, and Human Behavior Analytics.

The strategy is to build a persona of every value chain function in the minds of Consumers (For Fulfillment, if its fulfilled by Amazon, its Checked and will definitely get you a smile, For Delivery, its going to be the just in time when required, The Largest Catalogue on Earth, and the Customer centricness model etc),

2) To introduce Amazon business lines in terms of Smart Handhelds, Computers, Tablets, along with encouraging the existing ones of TV, Kindle, Instant Video etc, thus enabling a complete Human Connectedness Ecosystem. Along side this, it will as well have to build up on Amazon OS, Appstore etc and promote AWS and the next disruption of Living on Web and Cloud. These are Fulfillment centers for Consumers by helping them reach Amazon in a better way.

3) Create and Establish Consumer Engagement Platforms for Brands and Consumers, where the Customer Centricity can be addressed much before the decision-making has happened. A High Engagement model will not only strengthen the Ecosystem but as well contribute the higher Monetisation of Core model. Building in new age Consumer engagement tools with Amazon Video, Amazon Ads, Chat, and not to forget Socializing the entire process right from Need Generation in the minds of Consumers to Ending up by being fulfilled by Amazon. This can as well serve, as a Platform for the major brands along with Amazon trying to address the Consumer needs, Reviews etc.

4) Though Amazon fulfillment creates Consumer delight, Amazon should focus and promote more of Local fulfillment of needs.

5) Enabling progression of every Amazon offering, be it product or service to a Platform model allowing higher throughput and consumptions at both the ends (suppliers and consumers), and offering this Competence of platform as a service. Amazon TV, Appstore, Handhelds, Prime, Fulfillment, Analytics, etc.

6) Establish competence in Human Behavioral science along to build Pricing, Predictive, and Analytics competence, along with building a horizontal tech competence of Virtual Reality Stores, which can be extended to other dimensions of Gaming, TV, etc

7) Focusing building common competences for all Amazon offerings like Payments, Customer Reviews, Fulfillment & Customer Centricity (Pre – Consumption, Post Consumption)

8) With its acquisition of KIVA, Experimenting with AI, Automation and extending its possibility to explore offerings in Automation services for other consumer needs, Mobility solutions of Driver less transport, offering Aerial Drones as a Service to Consumer to exchange stuff in a P2P model etc.

9) Building up advancements & convergence in IOT, Wearable’s model, Automation and behavior analyses resulting in identification of needs proactively, leading to a transforming the thought of Human centricness and Amazon.

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