Amazon turned 25 years old this week. In its quarter century of existence, it has created roughly a trillion dollars in shareholder value.
Amazon dominates e-commerce, has the biggest cloud-computing infrastructure offering and leads the market for home assistants with its Alexa technology. Additionally, it has a burgeoning online ad business and is becoming a force in Hollywood through its streaming video division. Total sales jumped 31% last year to $232.9 billion.
Tom Forte of D.A. Davidson, one of the most bullish Wall Street analysts on Amazon, said in a report Friday that the company has developed a number of strategies for others to learn from and even copy. Here’s what he laid out, along with some concrete examples.
Focus on customers, not competitors: CEO Jeff Bezos has been customer-obsessed since starting the company in 1994 as an online bookseller. According to Forte, that has been Amazon’s most important enduring quality — focusing on customers, not competition.
One recent example is its private-label business, where Amazon sees what customers want most and tries to provide it at the lowest price by creating its own branded version.
Iterate: Amazon values iteration, “making continual refinements to improve its efforts.”
Examples: The Kindle e-reader has continued to evolve to keep pace with general-purpose tablets, and the Echo has gone from a basic voice assistant to a platform for developers to provide all sorts of help for customers.
Create a flywheel: Focus on having the lowest prices, biggest selection and fastest delivery and customers will keep coming back. This customer volume attracts suppliers and other partners, which in turn increases competition in these areas — price, selection and delivery speed — which in turn draws more customers, and so on.
One recent example of this is when Amazon introduced one-day shipping for its Prime customers. Although this increases Amazon’ costs in the short run, a recent RBC survey shows that customers spend…
https://www.cnbc.com/2019/07/05/as-amazon-turns-25-da-davidson-analyst-lays-out-top-lessons-learned.html
