Exploring the Amazon
Published December 02, 2004
Wharton marketing professor Jerry Wind agrees, noting that Amazon still offers features other retailers can't or won't, including 24/7 shopping convenience, customized shopping lists and an easy-to-follow format. "Amazon can capitalize on" these capabilities, says Wind.
....Amazon has taken on two personalities. When it comes to books and music, the company is like any other retailer building fulfillment centers and distributing goods. Other parts of its sites are like a shopping mall, where one can buy goods from partners such as Target and Toys 'R' Us. Amazon also sells electronics, a cutthroat business, and apparel, often through partners. In the end, Amazon becomes a department store. "With Amazon there is always a danger that it is spread too thin," says Wind. "The company is definitely established in books and music, but whether it is viewed as a place for other products remains to be seen."
....Meanwhile, Amazon keeps investing. Third quarter operating profit margins were 6.5%, lower than some Wall Street projections, because of spending on technology, content improvements and a new fulfillment center in Scotland. The company continues to fare well with consumers, earning a score of 88 out of 100 on the American Customer Satisfaction Index. "Amazon has made free shipping, low prices, good service and order accuracy a hallmark. Our decision to put dollars into lower prices and free shipping instead of TV advertising continues to be embraced by customers," said Jeff Bezos, founder and CEO of Amazon.com, in the company's earnings release. "Customer adoption of free shipping hit another record high this quarter."
....While the current concerns are important, one needs to put the company's moves in context, according to Fader. Amazon could quickly win over Wall Street analysts like Rubinson by honing selection and delivering better profit and revenue growth. Amazon is distinct right now because "it is viewed as an online technology company," says Fader. "Sooner or later that distinction will fade and Amazon will be viewed by what it sells and how it does it."
The bottom line is that when the average Internet user thinks of online retail he/she typically thinks of Amazon - that is gold.
- Exploring the Amazon
- Published: December 02, 2004
- Type:
- Section: Sci/Tech
- Filed Under: Culture: Business and Economics, Sci/Tech: Internet
- Writer: Eric Olsen
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I *love* the free shipping on orders of $25 or more. I recently paid for shipping on an Amazon order for the first time in over a year. And that's because the items actually came from ToysRUs and not Amazon itself. So on pure Amazon shopping, I still haven't paid shipping in a looong time.
I also signed up for their Amazon.com Visa card last year, just before Christmas. I got $30 off the order I was making, plus I earn a point toward Amazon gift certificates [in $25 denominations] for each dollar I spend anywhere but Amazon and 3 points for every dollar I spend at Amazon. We put just about everything on that card, from day care to groceries to gas to whatever, and I have a stack of gift certificates waiting to be used. I get at least one every month.
So not only have I not paid for shipping in a long time, I also haven't paid for any actual purchases in a while, either. We don't buy that much music or that many books, but when we do, they're free.
What's not to like?
I should note that I used a gift certificate to pay the shipping cost on my recent oder, too. So it still didn't really cost me anything.
Amazon was the very first company I did business with online, and they still account for a large percentage of my internet purchases. I dont' care for the department store aspect -- I mostly buy books and occasionally DVDs from them, but their book prices are very hard to beat, and we buy lots of books in my house.
excellent and interesting information - thanks all!
I almost exclusively use Amazon.com to buy my music these days, since most music stores (the ones that are left) only carry the top 100 and other well known artists. You surely aren't going to find the obscure progressive rock and metal CD/DVDs that I like at Best Buy or Walmart. Their prices are often the best you will find and you get to read all of those great customer reviews before you buy. The free shipping on items over $25 is amazing too. I don't really know how they are making a profit...or are they? I just hope they stay in business and keep provind the excellent service.
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Amazon is gold, and I have not had any issues with their sales/service - I do think they are stretched too thin.
I used to own their stock, sold at $60, haven't looked at them since. Great books, Eric - will likely get the first.