Amazon is considered an online retailing powerhouse, holding its own when up against platforms such as eBay and Walmart. Amazon has developed a sturdy and reliable marketing strategy to ensure that they get the best results out of the online market.
Amazon, like many other ecommerce powerhouses, relies on both demographic and psychographic segmentation of the markets. They focus directly on the behavior of customers with regards to purchasing: this is not specifically what customers show interest in rather, what the customers did (buying or not buying).
This approach to segmentation (micro-level segmentation) is aimed at individual buyers, giving Amazon the opportunity to turn casual buyers into loyal, big money buyers.
To further explain segmentation in ecommerce: this is when online retailers invent profiles of people who purchase products in a certain manner and target specific products.
In the case of Amazon, they focus on catering to middle and upper-class customers who possess a basic understanding of technology but lack the time and are not fans of physical shopping.
The Amazon team has proved themselves as an online retail giant that allows people to order any goods of their choice and have it delivered from any location not matter how far or remote. The Amazon tracker app also allows customers to keep track on their purchase until it reaches them. In this article, we are going to break down Amazon’s marketing strategy in detail:
They possess a competitive edge
Amazon took care to set themselves apart from other online retail companies by investing in several IT and ecommerce start-up platforms such as Junglee.com, Zappos.com, IMDB.com, and audible.com. This has been useful in providing greater value to their buyers while relying on the technology of their start-ups at a much lower price.
In addition to this, Amazon has expanded the list of products they offer to include things like eBooks, electronics, DIY products, toys and many other products. Such additions are key to ensuring that Amazon maintains low costs while giving its customers added benefits.
Amazon has been around in the world of online retailing for many years, and it has since expanded to foreign markets such as Asia and Europe in addition to being a powerhouse in the USA. Their marketing strategy has really helped them cement themselves as a step above the rest in global markets.
Branching into entertainment and tech world
In recent years, Amazon has expanded its services, making their mark in the entertainment and tech world. With the introduction of Amazon Prime, movie streaming services and e-books, Amazon has been raking in millions of dollars in annual revenue creating bigger profit margins for the company.
They have even decided to reach out to freelance filmmakers to create profiles and upload scripts or film samples to be analyzed by award-winning producers, writers, and filmmakers. If they are interested, they can invest in the project, a perfect platform for struggling and upcoming filmmakers. In recent years, Amazon movies and series have even been nominated for Emmy, Oscar, and Golden Globe Awards. This has cemented Amazon as a force to be reckoned with in the entertainment industry.
Although some services such as Kindle and Amazon web have become fairly obsolete, there are still some other features like the e-book that are growing in popularity as time goes by. Products such as electronics and other related products are working in the online retail giant’s favor with their high rates of growth but, Amazon’s market share for said goods is also quite high.
Their strategy for distribution
If there’s one thing buyers are not a fan of, it’s waiting around on the delivery of an ordered product. Amazon recognizes this and has developed a platform for efficient distribution, creating over 55+ centers for delivery that cover over 43 million square feet.
They are quite determined in their approach, targeting warehouses and using them to store consumer-packed products to better their delivery process. This has brought Amazon to new locations and more buyers.
Amazon has developed an in-depth and carefully planned platform to ensure that products are delivered to remote areas, doing it free of charge up to certain product limits. Globally, their delivery network has grown quite rapidly as a result.
Amazon’s Brand Equity
Amazon was once a humble e-book platform, but today, it is the second largest online retail company in the world. Paying greater attention to advertisements and promoting its product has helped Amazon develop a bigger brand equity. In 2015, Amazon.com was estimated to be worth US $176 billion, complete with over 55% repeat customers. It is also counted as one of 13 of the “world’s most valuable brands” by the Forbes list.
A closer look at its competitors
Comparing Amazon to other online providers is not a one step process as the brand covers different sectors from books to retail products. It’s important to break the sectors out and analyze them individually:
- Books and related content: Apple is its biggest rival in this department, also delivering audio books and magazines. Amazon has had trouble shaking off the iTunes store due to its delivery of incredibly popular products such as the MacBook and iPhone.
- Web related services: Google has grown to be its biggest rival when it comes to web services with many preferring it as a reliable search engine.
- Retail market: With over $9 billion being made through internet sales, Walmart is slowly flexing its retail muscles as a contender to Amazon’s global dominance. So far Amazon has managed to beat its rival out, making over double the amount that Walmart makes annually.
Amazon keeps a close eye on its competitors and makes a note of adding in extra features that its rivals don’t offer like, personalized shopping experiences. They are constantly testing out new ideas in a bid to stay ahead of the competition, and it cannot be denied that for now, they are definitely a cut above their rivals. With solid, determined, marketing strategies and a finger on the consumer’s pulse, Amazon is only going to continue to grow as an online retailing company. Here’s a really cool infographic on their history over 20 years.
We wish to thank Mari Jasmine Smith a digital marketing writer for SEO consultants for this article.