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  1. 1. AMAZON: HAPPY 20th BIRTHDAY TO THE MOST CUSTOMER –CENTRIC COMPANY ON EARTH (?) Thomas Cravens Final Paper Quality Customer Service, Wednesdays, 5:20 PM
  2. 2. Amazon Drone Delivery
  3. 3. BACKGROUND Amazon “mythic”, with its provision of high-quality customer service.  On the other hand, Amazon is not without its challenges.  Amazon still struggling to learn how organized labor fits into relentless push for innovation.  Founder and CEO Jeff Bezos started Amazon, Bellevue, WA, July, 1995, as online bookstore.  Amazon of today, has grown to rival the largest retailers.  First stock offered for sale “IPO”, May, 1997.  Amazon’s net annual sales recently surpassed $100 Billion.
  4. 4. BACKGROUND Amazon Much more than simply US’s largest online retailer.  Amazon involved many different businesses, number of rivals increase from innovation.  Amazon’s first international websites, with the United Kingdom, Germany.  CEO Jeff Bezos named Time Magazine’s 1999 “Man of the Year.”  2000 launched Marketplace, offered free shipping $99 purchase, contracted with Toys”R”Us.  2002 Amazon made first profit, became more aggressive, lowered free shipping to $25.  Seeking new technologies, including Kindle tablet, exploration of drone delivery, and smart phone.  Continual reinvestment has allowed growth, yet challenges Amazon to reach profitability.
  5. 5. BACKGROUND  Search for innovation places Amazon in competition with technology giants; Google, Netflix, Apple.  Competing with Netflix, Hollywood movie companies, signed rights for first movie; Spike Lee’s “Chi-Raq”.  2002 launched online cloud service, Amazon Web Services (AWS) before industry-known. Meets federal security and compliance requirements, leading provider of cloud services.  Expanding the reach of the Kindle, with applications for other devices, Amazon continues.  Amazon Prime, a $99/year subscription service provides 2-day delivery, streaming movies and music.  Innovation continues with purchase of robotics company, adding robots in warehouses.
  6. 6. CUSTOMER BASE  Average consumer purchasing items from Marketplace.  Businesses selling products on the Marketplace.  Start-ups with limited computer storage first Amazon Web Services customers.  Now larger companies are utilizing AWS to remain competitive, without the cost of overhead.  Employees important customers; 2011 “Career Choice” program pays 95% of tuition, prepaid.
  7. 7. GLOBAL DIVERSITY Corporate headquarters: Seattle, WA.  Also locations: Australia, Brazil, Canada, China, Fra, Germ, India, Italy, Japan, Mexico, Netherlands, Spain, U.K.
  8. 8. GLOBAL DIVERSITY  Successful in China: Worked well for Amazon, knowledgeable regarding cultural differences.  Acquired Chinese e-commerce start-up Joyo, 2006:  Delivery of goods in China is unique set-up, may be foreshadowing of future.  China only country where Amazon delivers good on own; average delivery time 2.5 days.  Chinese more interested in knowing when package will delivered, prefer to pay on delivery.  Customers are notified of the date and time their package will arrive.  Amazon first allowing point of sale(POS) upon delivery, using hand-held, portable card scanner.  CEO Wang Hanhua--service in China “…has surpassed its service in the US.”
  9. 9. GLOBAL DIVERSITY Amazon may have missed the mark in Germany. Amazon’s second largest market.  Regularly has conflicts with organized labor in Germany.  Fulfillment centers strike against Amazon on a regular basis.  In U.S., Amazon has successfully prevented union organization.  In Germany, Amazon has pushed back, saying too much union involvement prevents continual innovation.
  10. 10. CUSTOMER SERVICE CHAMPIONS  Most current award; 2014 by Zogby, 24/7 Wall St: highest-rated company for fifth year.  One comment from research-- “The company’s roots as a technology company… helps customer service.”  2013 ranking by ForeSee, ranked higher than brand names Nordstrom, Coach, Tiffany, Costco, etc.  Has highest ranking for 9 years, consecutively.  Showed great importance of Amazon’s focus on the “…customer experience…”
  11. 11. SERVICE BREAKDOWNS AND RECOVERIES Personal experience: Wall plug replaced on rechargeable watch.  Amazon willing to replace if unable by working directly through the manufacturer.  Customer service rep. apologetic, even though it was my fault that I broke the part.  Manufacturer replaced the part at no charge, including the cost of shipping.  Impressed that Amazon willing to replace entire item, including the watch, in order to rectify my error.  Positive customer experience that Amazon is fully committed to provide, with every single contact.
  12. 12. SERVICE BREAKDOWNS AND RECOVERIES Commitment shown strongly in corporate material: “There’s Always Room for Improvement”.  Amazon coined innovation: “ACES (Amazon Customer Service Excellence System’).  Continuous improvement methodology; closer to customer-centricity through continuous improvement. Jeff Bezos’ Question mark email: Shows commitment to action is article about CEO Jeff Bezos.  ”…Amazon employees get a Bezos question mark email, they react as though… ticking time bomb.” Amazon is so committed to customer obsession, even rectifies situations that it cannot control.  A father purchased a PlayStation from Amazon, was stolen from the front steps of their home.
  13. 13. BRAND LOYALTY Business customer:  One of Amazon’s customer types is sellers on Amazon website.  Independent business, Florida Gifts, initially hesitant: “…It turned out to be really great thing for us.’”  Helped grow their business.
  14. 14. BRAND LOYALTY Amazon stating on website: they are “most customer-centric retailer on earth” shows commitment.  Experiencing this on a personal, direct level, along with numerous ratings and rankings of research,  Amazon is consistently rated in first place, verifies this result.  Included research of two main age-group targets: millennials and baby boomers.  Prosper Analytics: millennials ranks Amazon first place, Baby Boomers ranked Amazon second place.  Prosper found two out of five Prime members under 35, loyalty important to younger generation.
  15. 15. BRAND LOYALTY Amazon Prime is an online innovation that is similar to a membership at Sam’s Club or Costco.  $99/year membership that allows certain benefits for its members. No limited offering of items.  Anyone in the household, purchasing an item under this membership, can receive Prime benefits  As long as you have an online connection, log into Amazon Prime account.  Benefits include free 2-day shipping for items with “Prime” label, instant ad-free video, music streaming.  The “extras” add a great deal of value.
  16. 16. BRAND LOYALTY Another way that Amazon encourages customer loyalty:  One technology that provides a history of past purchases mentioned already.  Another described: “Price-Drop”; a business writer impressed that he ordered a book, received $.16.  Explained Amazon’s high level of integrity, bringing Jonathan Salem Baskin for more to purchases.  Christiana Hart explained commitment to loyalty shown by numerous warehouses, worldwide.  50 in U.S. alone spread over 19 states, as major commitment for “…faster and cheaper delivery”.
  17. 17. TECHNOLOGY The technological innovations main categories:  1) First there is the website technology, for convenience for online retail customers.  2) The suite of tools targeted for eCommerce business, Innovations for all organizations, including Government and education. and/or entrepreneurs.  3) Finally, machines that you can “hold in your hand”.
  18. 18. TECHNOLOGY Amazon is generally seen as mainly as retailing website: Amazon relishes this emphasis.  Simplifying the process of purchasing an item, online requires complicated technology.  Amazon’s IT staff has developed this process, patented the “1-Click” purchase button, on 10/12/99.  1-Click makes “’…shopping easy and hassle-free.’”  Another technology Amazon uses is the storage and reminder of previous purchases.  It provides a summary of the account, on top, than “Buy it Again”, various departments recently shopped.
  19. 19. TECHNOLOGY E-commerce Business:  Definition: “An entire spectrum of companies that market products on the Internet and through other technology, and the process of accessing them by consumers”.  E-commerce businesses that utilize Amazon have package of technologically driven products.  They can simply use to advertise their products.  Businesses can use Amazon Pay, or the commitment can be as deep as Fulfillment by Amazon.  AWS Saves money for businesses and organizations
  20. 20. TECHNOLOGY Technology that you can hold in your hands  Amazon seeks more practical, best value, such as the Amazon Fire HD 6, retails for $99.  First company to contract with a wireless provider, 12/1999, allowing online purchases by cell phone.  Also offers higher-end, interactive devices, with recent introduction of the $189Amazon Echo.
  21. 21. Conclusion: Amazon may be the most customer-centric company on earth  Amazon very complex company extremely driven to satisfy the customer, make some profits.  Utilizing every logistical, technological, and systematic customer-centric tool that they can develop.  Amazon appears on a path to pursue every possible avenue to satisfy the needs of customers. These have been the reasons Amazon  Is a customer service champion  Explaining service breakdowns and recoveries  Brand loyalty  Technology innovations