Marketing strategy of Amazon

July 7, 2022 Marketing Advice

Marketing strategy of Amazon

The importance of customer obsession in Amazon’s marketing strategy

Welcome to a new series of articles entitled “Marketing strategy of…”, in which we delve into the marketing strategies of some of the most influential and innovative companies in the world. Where else could we start, but with Amazon?

Love them or hate them, everyone has to admit that they are one of the most omnipresent and successful companies out there. But how did they achieve this? And how did their marketing strategy contribute to this success? In the following article, we will answer these questions as well as outline the marketing strategy of Amazon’s success.

Amazon’s marketing strategy

Amazon’s marketing strategy hinges on customer obsession. By focusing on the needs and wants of its customers, Amazon has been able to create a unique shopping experience that cannot be found anywhere else. It has also used its marketing strategy to expand into new markets and product categories, which has helped to further solidify its position as a market leader.

There are three sub-pillars that support the marketing strategy of Amazon:

Product Range – Starting with books and then expanding across verticals, Amazon offers a wide range of products across almost every category vertical. Amazon stocks so many category lines now that it is the default starting point for the world when looking for a new product, whatever your needs.

Customer Service Interface – Amazon’s customer service is world-renowned for its speed and efficiency. Removing friction from the buying process has been a constant focus since its inception, and Amazon has infact informed how all e-commerce works today. From checkout experiences to receiving and items, each step in the process has been iterated over decades to the point where it is almost frictionless for consumers.

Scalability – Amazon invests in systems and marketing practices that can scale, to the extent that if that solution does not exist, then they will build their own service, as with AWS. Everything in the ecosystem is designed to scale including its marketing efforts.

Networks Effects – Amazon harnesses the power of the network and the marketplace to deliver exponential returns. By using network effects they have been able to keep their cost base low enough to be highly innovative and service the needs of their customers. By using marketplaces it has been able to tap into pre-existing industries such as affiliate marketing to do the heavy lifting of creating brand awareness as well as generating sales.

How did Amazon become so successful?

At the core of Amazon’s success has been its focus on customers, combined with the company’s culture of preventing itself. This company culture comes in part from Bezos himself and can be observed through his letters to shareholders. “We want to be a large company that’s also an invention machine with the speed of movement… normally associated with startups.” Jeff Bezos

Customer obsession is a constant in his letters from 1997 through to the present day and is the main reason that they have been so successful. But there are other themes that come out of these letters.

A willingness to fail is another theme that is worth examining. Amazon consistently places big bets on products and services without there being much certainty of success from the outside.

You might remember the Fire phone as a failure, but actually, there have been many more including; Amazon wallet, Amazon music importer, zshops, kozmo.com, Testdrive, and Storybuilder, to name just a few. Failure and a willingness to try and fail are ingrained in Amazon’s business culture. It is only from this that revolutionary innovation will occur.

Finally urging investors to be patient and look to the long term is another of Bezos’ themes in letters to shareholders. Planning forward to where demand will be in 5-10 years’ time has been critical to its success. By being ahead of the trend and demand Amazon can ensure that is a market leader before there is even a market. This culture has been critical to Amazon’s continued success, even if there are some casualties like Fire phone along the way.

The importance of customer obsession in Amazon’s marketing strategy

Amazon has always been customer-obsessed, and this is one of the main reasons for its success. It has consistently placed the customer at the centre of everything it does, and this has resulted in a loyal customer base that keeps coming back increasing customer lifetime value.

A useful amazon marketing strategy case study would be its private label business. In 1999 it opened its platform and launched its third-party marketplace for other retailers. However, over the years the platform started to become flooded with third-party sellers who were sourcing generally low-quality products from China that had previously been absent from Amazon’s catalogue.

Amazon recognised that consumers wanted low-cost alternatives to many branded products, but understood that consumers were generally unhappy with these cheap third-party seller products that were on its marketplace platform. So in 2007, Amazon launched its own private label line which would directly compete directly with these FBA sellers, even though they were receiving sales commission from these third-party sellers. Amazon knew that they could sell better products at the same price point and improve customer satisfaction with them.

The future of Amazon’s marketing strategy

It is evident that Amazon will continue to be customer-obsessed and will continue to innovate in order to maintain its position as a market leader. It has already started to move into new areas such as groceries with the acquisition of Whole Foods, and it is likely that we will see Amazon move into other areas as well.

It is also worth noting that Amazon is not afraid to copy successful ideas from other companies and adapt them to its own business. For example, the company recently introduced Amazon Go, a new type of retail store that uses technology to eliminate checkouts and allow customers to simply walk out with the items they want. This is similar to the concept of ‘scan-and-go’ that has been trialled by other retailers such as Walmart.

By continuing to be customer-obsessed, Amazon will no doubt continue to be a success in the years to come. The marketing strategy of Amazon plays an important role in this company’s success story.

Thank you for reading! I hope this article was helpful in understanding Amazon’s marketing strategy. If you found it useful please let me know.

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