7 Ways Amazon is raising your Customer Expectations

Amazon is changing expectations for customers regarding speed, convenience pricing, and choice. Echo and Prime

It makes shopping simple and convenient with their voice ordering system for free shipping and return shipping for no cost. The company is expanding

The network and logistics capabilities allow speed. Marketplace facilitates price comparison as well as a wide variety of vendors offering the best cost.

1. Winning with convenient, frictionless shopping for customers

Prime members are the primary engine of the company. Prime helps customers stay loyal and decreases friction through quick, free shipping for members.

Amazon isn’t able to compete with shipping costs However, it is a winner in the consumers’ minds. The majority of online shopping searches begin on Amazon rather than Google.

And Amazon is shifting the sale away from the shop as well as the phone, computer and computer, and seamlessly integrating into its customers’ lives via voice ordering using Amazon’s Alexa/Echo products.

Today the majority of owners of smart speakers within the U.S. have used the device to buy something.

Increasing order-to-delivery speed

It is done through a large network of fulfillment centers, hubs and now bricks and mortar stores.

Amazon’s growing distribution infrastructure and logistics capabilities enable them to fulfill their promise to deliver Prime.

Speed is always a major advantage for Amazon however, thanks to Amazon’s acquisition Whole Foods and the addition of physical stores, Amazon is developing an omnichannel presence , which could enhance speed.

They are redefining the shopping experience by introducing Amazon Go stores that are designed to speed up and make shopping easier.

Customers do not use the checkout, and get charged for their purchases at the time they leave the shop.

They also utilize bricks and mortar investments by providing lockers that are open 24 hours a day to allow for convenient ordering and return.

3. Marketplace enables broad selection and competition for the “buy box”

Sellers pay a cost to advertise their goods on Amazon’s platform . Sellers can use the Amazon store pick up, pack, ship and ship orders for a fee.

Marketplace is a key component of business. It earns money regardless of whether Amazon ever interacts with the product.

It’s not a secret that Marketplace offers Amazon insights into which products are successful on its site, as well as the pricing patterns of those items.

Amazon also offers a variety of private label brands, including AmazonBasics, Wickedly Prime and Elements as well as recently, launched several new apparel collections that are its own.

Private labels from Amazon usually outperform the brand name category leaders because of their lower costs and free shipping that are preferred by the “buy box” algorithm.

4. Building its own logistics network to reduce costs

They’ve hired an air hub and 50 Boeing 767s. They’ve got 10,000 truck trailers dedicated to their use and act as freight forwarders in China.

The logistics infrastructure is being developed to lower shipping costs that have been increasing each year since 2009.

Amazon’s net shipping expenses were $7.2 billion in 2016. In the same year Amazon’s shipping expenses were $27.7 billion in 2018.

In the same year Amazon purchased 20,000 delivery vans and launched the Delivery Service Providers Program, offering loans for business to encourage entrepreneurs to set up businesses to be able to handle the last mile delivery volumes for the company.

5. Driving greater competition for labor in tight markets

Amazon’s workforce has increased by almost 10 times over between 65,000 and 613,000 across the globe over the past 8 years.

When they go into an industry and employ many of its workers, it places the pressure on other businesses to raise wages and provide incentives to attract and keep the top employees.

Amazon just announced that it will offer a new $15 standard wage to U.S. workers and challenged other retailers to follow suit.

It hired 100,000 temporary employees to help meet the demand for holiday workers in the year 2018 alone.

6. Growth isn’t just in the U.S.

They are expanding their operations outside of the U.S. at a rate of 23-28% per year. It has also made substantial expansions in the U.KGermany, Japan, India, France, Italy and Spain in the past two years.

Amazon recently acquired its largest rival within the Middle East, Dubai-based Souq and, in 2019, changed the name of the website to Amazon.ae.

They have launched Amazon in Australia as well as Amazon Prime within Mexico in a sign of their intention to compete with other countries that have the largest online giants.

7. Growing both organically and through acquisition

Amazon paid for the acquisition of Whole Foods by bond sale instead of cash like other acquisitions. It is evident that the company is ready for additional purchases in order to help boost its expansion.

The market power of Amazon is comparable to Walmart’s 32 years before. Amazon’s market capitalization is three times the size of Walmart’s.

And Amazon is more extensive than what it appears when you consider third-party sales made through Marketplace.

Amazon does not report as revenue the revenue it earns through Marketplace sales, therefore the numbers for revenue don’t reflect the actual growth in sales.

Conclusion

More than everything else, Amazon is a company that is constantly learning and experimenting every day.

They are eager to test new ideas, knowing that some will be unsuccessful. As per Jeff Bezos’ own words, “the company is energizing a culture of relentless progress,” and “using the divine discontent of the customer as a North Star.”

Amazon is creating an edifice around the 100 million plus Prime customers by continually anticipating the needs of its customers and delivering new services and products before anyone else can even recognize that there is a need.