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Opinion

Happy Birthday Amazon

Today it is 25 years since Amazon started disrupting the world of retail and using the power of the internet to be the ‘earth’s most customer-centric company’. From innovative US bookseller to global behemoth that bestrides the retail space, Amazon has spent every one of those 25 years in the ruthless pursuit of removing friction from the process of shopping. Its’ successful expansion into hundreds of categories has been done by providing exactly what shoppers require and using its scale to drive down costs. The Amazon ‘Flywheel’ business model that combines price, convenience and service to drive ever greater scale, shows no sign of slowing. It has done this whilst continuing to untap the potential in digital technologies like voice, Dash buttons and a dozen other ways to connect shopper and retailer – remember the Amazon Fire smartphone?

It is a business that is relentless in thinking about its customers problems and then working backwards to offer a solution. Its’ use of data allows it to test and learn at astonishing speed. These are behaviours that set a benchmark for today’s retail market and we can all learn from them.

From a pure-play online retailer, it is now a multi-channel offer as it has seen the value of physical stores in many areas of selling. From pop-ups to checkout free stores, kiosks and the new Amazon 4-Star stores featuring its most popular products, the company is using all its know-how to become a leading bricks and mortar retailer. The first Amazon-Go store is predicted to open in the UK soon which should again give us a view of what the future holds. For those of us that love retail and the business of commerce we should see Amazon less as the destroyer of traditional ‘high street’ retail and instead celebrate the company’s role in driving exciting new ideas forward and that focus on customers that some are too quick to take for granted.

All of these developments have also required changes to the way in which we create our campaigns. Amazon is such an important individual channel for almost all clients that it is now a key consideration in campaign planning, ideation and activation. According to TGI more than 10% of UK adults bought something from Amazon in the last 4 weeks and Mintel claims 15% of us are prime subscribers - meaning it now plays a role in millions of shoppers’ everyday lives. For any campaign designed to engage shoppers and drive conversion taking account of how it will align with a brand’s Amazon presence and make the most of its varied customer touchpoints is critical. Given the dynamism of the business this requires some specialist knowledge and an intimate understanding of its eco-system from optimised product pages, search terms and advertising products. It is why leading commerce agencies are investing in exactly those skills and clients search out partners with the requisite creative know-how.

So happy birthday Amazon. Here’s to innovation and to the next 25 years of retail.

Written by Anthony Donaldson
Executive Planning Director