What your brand can learn from Amazon’s culture of innovation

Fifty years from now, when Amazon is selling real estate on the moon or shuttling Prime members around in flying cars, most people probably won’t remember that the world’s most valuable retail brand started out as a simple online bookseller. The tech giant has far surpassed its more humble beginnings, and not just in retail.

While many hear the “Amazon effect” and immediately think of the evolution of customer expectations and the decline of brick-and-mortar shopping, the truth is much broader.

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Amazon has succeeded by innovating far beyond the scope of eCommerce – whether through the cloud with Amazon Web Services (AWS), drone delivery and the supply chain, or even through the creation of Academy Award-winning original content. And while most brands can only dream of attaining the influence Amazon has, every organisation can learn from the principles that have guided the business to its success.

How can companies imitate Amazon’s winning strategy?

Don’t just adapt to consumer demand – change consumer behaviour

Amazon’s success is not solely rooted in its ability to offer competitive prices or a wide range of products. Many companies – Walmart, for example – have already covered that base, and do it well.

Amazon’s primary competitive advantage is its ability to foresee what the market will want and deliver solutions that change consumer behaviour entirely, rather than solely adapting their offerings to fit within existing trends.

For example, Amazon recognised the desire for more streamlined – shopping experiences that anticipate consumer needs. With Amazon Prime, the brand now provides 65 million members with just that – giving customers features like enhanced checkout and shipping options.

Consumers have been buying basic household goods online for year, but through Amazon’s innovations they can now execute those orders with a click of the Dash button conveniently placed on their washing machine, or by simply asking Alexa to do it for them. And the same service that provides these everyday items delivers ebooks to tablets and streams music, audiobooks and video across numerous devices, all for the same small subscription fee.

>See also: How can traditional retailers use technology to take advantage of Amazon

With an experience-driven service like Prime, Amazon addressed a need that customers didn’t even know they had yet – the need for a seamless shopping experience across an ever expanding basket of goods.

Now, Amazon has a loyal base of engaged customers that not only shop for products, but pay an added annual subscription fee for these types of benefits and exclusive access.

Amazon Web Services, which reported $3.53 billion in revenue for Q4 2016, is another example of innovation, expanding Amazon’s core offerings from eCommerce to the digital B2B space.

AWS is used by businesses ranging from small family-owned operations to household names like Netflix. Besides supporting Amazon.com’s massive infrastructure, AWS now accounts for nearly 10% of Amazon’s revenue and has expanded the company’s reach, establishing them as a competitor with tech companies like Google and Microsoft.

It also made the cloud much more accessible for small businesses that would otherwise have had to invest in complicated or expensive cloud computing solutions. That’s because Amazon anticipated the digital needs for organisations of every size and acted quickly to provide a solution.

>See also: Google Assistant vs Amazon Alexa: which is the best intelligent assistant? 

With these programs, Amazon hasn’t just exceeded expectations – they’ve moved the goalposts for brands across every industry. They’re redefining what customers and business buyers even think is possible, and how they expect brands to interact with them.

Analysis paralysis

With these innovations, Amazon has a history of launching full-force into uncharted territory – territory that would have gone unexplored if the brand waited for perfect, comprehensive predictions about what would come next.

Brands are often cautious to take risks, and try to mitigate uncertainty by waiting for flawless projections and models. While this is reasonable for large fixed cost investments, it limits opportunities for growth when applied to more dynamic industries.

By staying in their comfort zones, many brands have fallen behind their more agile competitors – consider Borders, which went under after it refused to sell its’ own products online and instead outsourced online bookselling to (you guessed it) Amazon.

>See also: Gaining business value through the “Amazon-ification” of data

Amazon has taken an agile, high-velocity approach to innovation, preferring to act fast recognizing iterations are necessary. The company has gotten comfortable knowing that they can always improve on solutions once rolled out, but the key is rolling them out in the first place.

Understand that iteration leads to innovation

By striving to constantly improve rather than banking on perfect solutions the first time, Amazon has the ability to launch a minimum viable product (MVP) quickly and then iterate and improve based on real-time customer feedback. And while every iteration might not be flawless, each one provides valuable information on how to get better.

This approach has been effective in the development of Amazon’s most disruptive innovations (think Amazon Echo) down to individual product offerings. Amazon’s policy of iterative innovation is something that any business, no matter what size, can co-opt.

For example, Amazon recently released a new feature, Amazon Custom, which for the first time, allows for merchants to offer customizable product through Amazon.com. The Beta offering went live in just weeks, allowing sellers to test the options, deploy to their customers, and provide feedback for Amazon to tweak and improve.

Bear Naked Granola was able to take advantage of this new capability by providing Bear Naked Custom, extending the experience previously accessible only on their own Bear Naked granola website.

Rather than waste time perfecting the service to their specifications before going to market, Amazon launched the offering with the plan to iterate based on retailers’ feedback, ensuring that the offering adequately met their needs.

>See also: 3 ways to transform the customer experience

The data gathered from the Amazon offering will give Bear Naked valuable insight into customer preferences, which will inform product offerings across all areas of the business.

This example shows that the strategy of consistent innovation can be applied across the spectrum: from the “big ideas” that redefine eCommerce to the small ones that improve the customer experience.

Not every organisation has the resources or revenue to be Amazon. But all leaders can learn from the ethos of innovation that has guided the company towards better user experiences that influence brands across every industry vertical.


Sourced by Scott Webb, president, Avionos


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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...

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