THE INTERNET TAKES OVER RETAILING The Internet has developed rapidly in the last two decades and the number of web users has grown exponentially with high speed Internet and relevant information technology spreading worldwide. Businesses have exploited the web and firms promote their products and services online offering detailed descriptions and product information and images. More and more people have come to rely on Internet shopping and consumer behavior has, as a consequence, changed from traditional shopping in brick and mortar stores to virtual browsing on the worldwide web. Companies have had to rethink their marketing strategies and those that did not adapt have suffered the consequences of the digitalization of commerce (e-commerce)
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This allows them to employ less and hence cut fixed costs and labor costs. Moreover, Amazon buys in bulk and hence reduces the price per unity it buys, proceeding as an economy of scale. All of these aspects contribute to providing Amazon with a competitive advantage, providing cheaper prices than any of its online rivals, also providing cheap shipping, going from 3-4$ (Fig 1), half that of prices of most other online retailers. Indeed, Amazon enjoys economies of scale far beyond their online competition allowing they to provide very low prices and fast, cheap shipping. It is larger than the next dozen largest e-tailers combined allowing growth and further scale advantages. Amazon not only competes with its prices but also with the customer experience it …show more content…
Indeed, the website is not afraid to try new things, and is known for thinking like a technology company and a group of agile innovators. Facing no internal competition, it diversifies its products thanks to differenciation, and is not hamstrung by an enormous brick-and-mortar business like Walmart. Its success its mainly axed on the company’s culture to always test these new ideas, testing product prices, calls to action, colors, navigation, marketing channels etc. The largest risk was the transgression from selling hardware to electronics. Indeed, it began associating physical distribution systems and the digital world, branching out to cloud computing, e-books, video streaming and music downloads. Its main success was the launching of the first e-book, launched in 2007 under the name of Kindle. As the price of the Kindle reduced from 2009 to 2010, from $259 to $189, the law of demand was confirmed with the number of Kindles sold tripling. One of Amazon’s popular dynamics and vital aspects is cloud computing which allows to grow infrastructure instantaneously and to shrink it back if things do not work out. This elasticity in resource attraction and usage gives Amazon the momentum on a vast new scale. Moreover, in 2006, it began renting out computer capacity per
This allows them to employ less and hence cut fixed costs and labor costs. Moreover, Amazon buys in bulk and hence reduces the price per unity it buys, proceeding as an economy of scale. All of these aspects contribute to providing Amazon with a competitive advantage, providing cheaper prices than any of its online rivals, also providing cheap shipping, going from 3-4$ (Fig 1), half that of prices of most other online retailers. Indeed, Amazon enjoys economies of scale far beyond their online competition allowing they to provide very low prices and fast, cheap shipping. It is larger than the next dozen largest e-tailers combined allowing growth and further scale advantages. Amazon not only competes with its prices but also with the customer experience it …show more content…
Indeed, the website is not afraid to try new things, and is known for thinking like a technology company and a group of agile innovators. Facing no internal competition, it diversifies its products thanks to differenciation, and is not hamstrung by an enormous brick-and-mortar business like Walmart. Its success its mainly axed on the company’s culture to always test these new ideas, testing product prices, calls to action, colors, navigation, marketing channels etc. The largest risk was the transgression from selling hardware to electronics. Indeed, it began associating physical distribution systems and the digital world, branching out to cloud computing, e-books, video streaming and music downloads. Its main success was the launching of the first e-book, launched in 2007 under the name of Kindle. As the price of the Kindle reduced from 2009 to 2010, from $259 to $189, the law of demand was confirmed with the number of Kindles sold tripling. One of Amazon’s popular dynamics and vital aspects is cloud computing which allows to grow infrastructure instantaneously and to shrink it back if things do not work out. This elasticity in resource attraction and usage gives Amazon the momentum on a vast new scale. Moreover, in 2006, it began renting out computer capacity per