When talking about e-commerce, there is Amazon on one side and everything else on the other side. Almost like when we talk about search engines: Google first, and then the others.
Although e-commerce websites are generally efficient and growing fast, the worldwide leader in e-commerce remains a unique model of growth and profitability.
To understand what distinguishes the American giant of its direct or indirect competitors, we must go back to the history of the brand since its launch, and the specificity of its business model.
Not only an E-commerce website
In the beginning Amazon was “only” the first “online library”, an e-commerce website specialized in selling books and cultural products. Nobody believed in it, except its founder and his circle of relatives, but it worked! And the company has spared no occasion to diversify its offer and increase its business, even while it was in deficit for several years.
The great advantage of the number one of e-commerce is to be present everywhere, for everyone, by all means … Diversity of the offer: The number of product references continuously grows up (exceeding any known worldwide hypermarket), diversity of channels: Amazon sells its own products, serves as marketplace for other sellers and marketing tool for other e-commerce sites (by sending the customer directly to the “competitor” website when he chooses the product displayed …). And this strategy is paying off today because Amazon is not just a reseller, or only an electronic market place, but also a huge customer’s base with a huge products database, and consequently huge quantities of data and advanced algorithms/technology.
A revolution in the consumption habits
According to a recent study, half of the internet users consult the Amazon sheets of a product even when they buy it in stores. This is a strong sign of the Amazon model anchor in consumer habits. In no more than 4 years Amazon has managed to dethrone Google as the first “contact” a consumer asks when he thinks about making a purchase!
To summarize, the Amazon model is both an innovative model and pioneer in market places and selling online; it allowed him to generate huge profits and exceed all competitors … but it is not immune to the stagnation of its model or the entry of new players with new ingredients in their recipe, and here we go!
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