From time to time, DirectiveGroup team members will share their views on a piece by an industry thought leader. Here, Arlin discusses Bryan Eisenberg’s Amazon’s Performance Secrets.
Given Amazon’s dominance over modern e-commerce, it’s easy to forget that it began as just one of a number of Internet upstarts, a book-selling, virtual brother of now-defunct online merchants like Pets.com. However, in Amazon’s Performance Secrets, Brian Eisenberg succinctly details the practices that turned the company into a titan of the online marketplace.
Eisenberg describes how the company applies Amazon CEO Jeff Bezos’s “four pillars of success”—customer centricity, continuous optimization, a culture of innovation, and corporate agility—to drive the company ahead of its competition. At Amazon, small, cross-functional teams have the authority and resources to execute on plans without additional support. These teams rely on optimization data gathered from more than 200 simultaneous marketing tests, customer behavior tracked to the mouse movement, and a $6.5 billion R&D budget. The combination of agile teams, big data, and a focus on customer experience allows the company to innovate and evolve to online marketplace changes in near real-time. Innovations such as its patented “1-click ordering” and, more recently, same-day delivery are all products of the four pillars of success. The pillars have also made Amazon the undisputed giant of e-commerce, with $74.45 billion in 2013 sales alone.
It’s easy to get lost in Amazon’s staggering numbers. However, those figures are simply the hard evidence of how successful Amazon’s four pillars can be. A company of any size can use Amazon’s focus on customer experience, optimization, innovation, and agility as a road map for e-commerce success. After all, less than 20 years ago, Amazon was just an online bookseller with the seemingly quixotic idea to compete with brick-and-mortar giants like Borders and Barnes and Noble. Its ascent to global e-commerce leader in everything from books to groceries proves just how strong those four “pillars” really are.