Please review three websites through which you can order products (such as amazo
ID: 355151 • Letter: P
Question
Please review three websites through which you can order products (such as amazon.com, eBay.com, and Zappos.com) and answer all questions. What are the companies’ delivery promises? What type of standards might they set for these promises? Are these customer or company-defined standards? Please review three websites through which you can order products (such as amazon.com, eBay.com, and Zappos.com) and answer all questions. What are the companies’ delivery promises? What type of standards might they set for these promises? Are these customer or company-defined standards?Explanation / Answer
Amazon is the biggest e-commerce store in the world. They carry a wide range of products across various verticals. It has a clear focus on becoming the goto place for anything whether that is server time (AWS) or content (Amazon Kindle). Along the years Amazon has acquired a bunch of companies such as Zappos.com, Diapers.com, Soap.com: Health, Beauty, Household, School Supplies, Casa.com: Décor, Bed, Bath, Cookware & Home Goods.
Acquisitions mostly result in one of these outcomes:
a) The acquiring company buries the original product/service entirely. This is mostly done when they want to acquire as a means of killing competition or want to acquire purely because of a team's talent.
b) The acquiring company buries the product but uses the acquired asset for it's technology in parts, or for it's existing customers/distribution channels.
c) The acquired company continues to exist as an entity of it's own.
So why is c) is a better option for Amazon with these acquisitions?
1) Considering all of these products are Consumer facing products branding and customer trust is an asset that cannot be simply transferred like a piece of software. Thus continuing with separate websites and different brands allows Amazon to keep the customer loyalty and trust that the acquired companies gained over years of existence.
2) I am certain that none of these acquisitions were done "primarily" for the technology, if there were technology pieces that Amazon felt could be reused within Amazon (say something like a virtual trial room) it could do that regardless.
3) Most of these acquired companies operate in a particular e-commerce vertical/niche. The product or feature set would be tailored specifically to suit the targeted consumer category. Further it is much easier to do sales from "recommended for you" as suggestions are more relevant.
4) Separation of concerns when it comes to marketing and pushing sales. The marketing doesn't need to follow the parent company and neither does sales. It might be difficult to get the home page of Amazon to feature a huge discount on diapers but a website selling baby products would do it without much hassle. Similarly offering independent discounts and any sort of referral marketing campaigns don't need to be under the Amazon brand.
5) Taking a leaf out of how Amazon builds the technology stack, it follows the Service Oriented Architecture, a guiding tenet of such a stack is that the system should not have a single point of failure (don't put all your eggs in one basket). Now consider this being applied to Amazon as a company. If all products, verticals were being driven from one domain it creates such a single point of failure. I think SOA is something Amazon applies not only to technology but to the company as a whole.
6) Allows Amazon to easily sell off any of these websites if the need or opportunity arises.
The same question can be asked for Facebook's acquisition of whatsapp, Instagram. Typically with a consumer facing product a burial of acquired service seems counterintuitive.
Keep in mind most of these are result of acquisitions: Diapers was purchased as a part of Quidsi, Zappos and 6pm were purchased too. This could indicate Amazon is simply buying its biggest competitors who could threat its dominance in the markets it cares about.
What is more interesting is how this multi-brand strategy allows Amazon to address different segments of the market.
Just like GM owns Cadillac for luxury, Buick for midmarket, Chevrolet for low cost and GMC for trucks, each serving a different type of buyer, Amazon serves different customer segments with these brands:
- Zappos caters to buyers who care more about service and convenience than price
- 6 pm caters to price buyers who don't like Amazon's shopping experience or simply prefer a more fashion-oriented retailer
- Diapers (and Soap, Wag and other Quidsi brands) are targeted to specific buyers, often looking for repeat purchasers who buy subscriptions.
Amazon.com is getting so big selling so many products that it can be overwhelming. Separate brands provide a better experience for shoppers who want a more contextually-relevant shopping experience. It's a great strategy.
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