AMAZON: CHANGE THE GLOBAL SHOPPING INDUSTRY BY APPLYING INNOVATIVE TECHNOLOGY IN LOGISTICS
30 years ago, no one would think they could buy goods directly from different districts, cities, even other countries just by having an Internet-connected device. But why could Amazon become a giant player in the online shopping industry and made Jeff Bezos the CEO as the richest man in the world?
There are many reasons contributed to Amazon's success, but the 2 most determined ones are:
Capturing the right need of customers
Jeff Bezos discovered that the biggest downside of traditional stores was they can't sell all the items because the shelves and stock are not big enough. Therefore, they will often choose the best selling products or bring the best profit to display. This also meant that almost everyone will use similar products and sometimes customers can't find the products that satisfied 100% of their needs.
The only way to find the needed product back then was to find all the familiar shops or make an exclusive order with the store. Because it's too time-consuming so most customers chose to accept the items available and gave up the desire to 100% satisfy their needs.
Use the technology innovation to fully satisfy the customers
Bezos has created the Amazon online shopping platform to maximize the diversity of the items and reduce the cost of storage nearly equal to 0. Customers can find all the desired items from different stores in the world by typing keywords on Amazon. When receiving orders, the delivery service will directly pick up the goods from the store and deliver it to customers.
With this "endless online storage", Jeff Bezos has helped to satisfy 100 % personal needs of each customer, pushing the sale of the corner products (niche products) without having to hire a giant warehouse just to contain products.
This is called the concept of "The Long Tail", which was introduced for the first time by Chris Anderson in 2004. In the book " Longtail " published in 2006, he revealed that total revenue from the niche products was equal or more than that of Amazon's best selling products. When traditional stores ignore this niche market, they are throwing 50% of their revenue out the window.
Author: Vo Ngoc Thanh
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