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Impact - A Blog by INM

Amazon’s Modest Plan for World Domination

November 22, 2016 by Vahe Kassardjian
Amazon’s Modest Plan for World Domination

With Pokemon Go stealing all the thunder this summer, little attention was paid to Amazon Prime Day (July 12th, 2016).  Amazon indeed wanted media attention, but its actual plan was a little more ambitious. It was something like securing world domination.  

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This is how the events unfolded:

  • In the weeks preceding July 12th, there was heavy advertising to get people to hurry and sign up to the 90$/year Prime program. Free for 30 days, you could cancel afterwards, but doing so required an explicit cancellation. By default, you would remain a Prime member.
  • Amazing deals, and lots of them, were expected on July 12th. Quantities were limited. The market was expected to be volatile. To save you the effort of watching Amazon.com the entire day, you could declare in advance the products that were of interest to you. Amazon would then notify you of the right deals at the right time.
  • In addition to regular markdowns, there would be Lightning Deals made available for only minutes or a few hours, and they would roll out every five minutes. The best way to keep up was to watch them through the Amazon Mobile App on your smartphone.

To recap, so far Amazon has collected a list of new and existing clients along with their names, profiles and interests. Most of them have an Amazon App at their fingertips.

On July 12th, things went well for Amazon. Lots of people were on the streets chasing Pokemons but a large enough crowd was shopping online. The inevitable glitches happened (see #PrimeDayFail on Twitter) but Amazon closely monitored social media and handled crises such as excessive lags, depleted inventories, buggy shopping carts, etc.

It was Amazon's best summer shopping day ever.

But wait there's more.

In the following days, both classical and social media were swamped with Prime Day’s successes to get the stock market excited, to build awareness with potential retailers, and get them to want to Sell on Amazon, and with customers in general who took advantage of incredible deals thanks to Amazon. The story of the Canadian retailer who sold 24,000 hammocks in a single day went viral.

And nothing in this adventure went to waste. Every action was designed to produce a benefit:

Testing for price sensitivity. A number of "incidents" had happened in the past where different people were offered different prices based on context. Amazon had apologized for the discriminatory practice and refunded the overcharges. But on Prime Day, pricing was openly set to vary every few minutes and thus critical thresholds in price modeling were easy to find.

Testing for performance in production: Both software and infrastructure are constantly in evolution and despite the best simulation practices, nothing is as reliable as system testing under real load. Rumors have it that Amazon Prime Day was partially meant to get the technology ready for Black Friday but in the low season.

The more clients talk to you, the less they talk to your competitors: More than ever, E-commerce is about shopping, comparison, education, cross-influence and relation building, and not only a commercial transaction. Keeping a customer’s attention focused on Amazon in a relevant way was clever in keeping the same customers away from the competition.

Building anticipation for Amazon Prime Day 2017: Amazon is trying to make Prime Day a recurring summer holiday. In addition to the multiple call-to-actions that encouraged immediate action through campaigns and other conversations, one major call-to-action remained anchored in people’s minds: Amazon Prime Day on July 11th, 2017, will be even greater.

To me, the whole matter can be summarized in two points:

  1. Amazon's unified and consistent approach to E-Business. E-mail campaigns, web sites, mobile applications, UX design, The Cloud, etc. are just the constituents of one single unique toolbox that allows Amazon to achieve a business purpose. They are not separate departments that use isolated systems.
  2. Amazon's strategy is not limited to one-way massive lead acquisition. Beyond the initial acquisition project, considerable efforts are spent to deliver incremental value and strengthen relations through different touchpoints.

This holidays season, Adobe predicts record 91B$ in sales, about 10% higher than last year.  

In the meantime, Amazon is hiring 20% more holiday workers than usual.

I guess this means that Amazon expects to grow revenues twice as much as everyone else.  Let’s observe and debrief in the New Year.

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