How Amazon Is Building Experiences Atop Digital Infrastructure [Marketing]


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PSFK's Future of Retail Report unpacks how the online retailer is building physical experiences on top of its existing digital platform to adapt to the expectations of a new generation of consumer.

By upending the purchase and delivery experience across most retail markets, U.S. e-commerce leader Amazon has solidified its position as the industry’s digital benchmark with a market value that exceeded $450 million and $136 billion in revenue in 2016.

As part of our Future of Retail 2018 Report, PSFK put together a case study on how the retailer is effectively building physical experiences on top of its existing digital platform to adapt to the expectations of a new generation of consumer. Our finding are underpinned with the trends from our report.

While continuing to perfect its convenience core, Amazon has invested in offline experiences—Treasure Trucks, Amazon Bookstores, Amazon Go, and most notably, its acquisition of Whole Foods—that help the retailer to establish a tangible relationship with shoppers that encourages them to identify with the brand. Amazon’s relationship-building initiatives are supported by effective use of existing data-collection and logistical processes, while always driving back to their core sales channel, online.

What are Amazon’s core drivers of retail success?
Seamless – Prime memberships reduce friction to make shopping easy, integrated and even automated
Brandless – With the shift to voice, the default becomes Amazon brands and preferred partners
Boundless – Rapidly growing commerce and fulfillment ecosystem that runs across industry and product category
Relentless – Constant innovations and acquisitions expand its
reach and efficiency, but failures are embraced

Convenience:
• Amazon.com
• Amazon Dash replenishment buttons let users order specific items with the touch of a button or automatically replenishes them when they run out
• Amazon Key facilitates in-home deliveries of products and services

Access & Support:
• The Amazon Experience allows customers to buy and return Amazon purchases at partner stores
• Amazon Lockers deliver orders to convenience stores, gyms and smaller retailers for those without a convenient home address

Recognition & Personalization:
• Amazon Alexa AI-enabled device suite interacts with and learns from consumers in their homes
• Amazon Alexa Routines learns daily routines and schedules regular tasks and deliveries around them

Belonging & Community:
• Whole Foods connects Amazon to an established community of wellness and sustainability- minded consumers
• Treasure Trucks deliver tailored deals while visiting regional communities

Confidence & Reinforcement:
• Smart Home consultations help customers feel confident in their Amazon IoT purchases
• Amazon Echo Show offers reinforcement for consumers on their outfit selections
• Physical locations of Whole Foods and Amazon Bookstores allow customers to touch and trial products before purchase

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