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Amazon’s Digital Transformation

Posted by Nora Osman | Oct 19, 2023 | Analysis , Digital Readiness , Technology | 0

Disrupting Industries Through Customer-Centric Design

Amid the whirlwind of technological advancements shaping our modern world, Amazon stands as a shining example of how a relentless commitment to digital transformation can revolutionize industries and redefine customer expectations. Founded in 1994 as an online bookstore, Amazon has since evolved into a global tech giant, disrupting numerous retail and service industries along the way. Let’s explore Amazon’s journey in digital transformation, focusing on 3 unique examples of this transformation, as well as how customer-centric design was core to their strategy, and ultimately, to their success.

I nnovations Reshaping Industries for a Competitive Advantage

• E-Commerce Reinvented: Amazon Prime

One of Amazon’s most significant digital transformations was the introduction of Amazon Prime in 2005. This subscription service offered customers a bundle of benefits, including free two-day shipping on eligible products, access to a vast library of streaming content, and exclusive discounts. Amazon Prime was a game-changer, as it fundamentally altered the way people shopped online.

Amazon recognized that convenience is paramount for customers, and Prime exemplified this principle. With its two-day shipping guarantee, customers no longer had to wait days or weeks for their orders to arrive. This revolutionized the e-commerce industry, setting new standards for shipping speed and convenience. Competitors were forced to adapt or risk becoming obsolete. Amazon Prime’s customer-centric design created a loyal and engaged customer base, ensuring ongoing success and expansion of the service.

• Cloud Computing Dominance: Amazon Web Services (AWS)

In 2006, Amazon made another bold move by launching Amazon Web Services (AWS), a cloud computing platform. AWS allowed businesses to access scalable and cost-effective cloud infrastructure and services, eliminating the need for expensive on-premises data centers and infrastructure. This digital transformation was groundbreaking, and AWS quickly became a powerhouse in the cloud computing industry.

Amazon’s customer-centric approach played a crucial role in the success of AWS. They listened to the pain points of businesses and addressed them through AWS’s flexible and pay-as-you-go model. This customer-focused design allowed companies of all sizes to scale their operations seamlessly, reducing IT costs and increasing efficiency. AWS’s reliability and security features also made it an attractive choice for businesses, further solidifying Amazon’s position as a technology leader.

• Voice-Activated Revolution: Amazon Alexa

In 2014, Amazon introduced the world to Alexa, its voice-activated virtual assistant. Alexa-powered devices, such as the Amazon Echo, have transformed how people interact with technology in their homes. This innovation marked a significant shift towards the integration of artificial intelligence and voice recognition in everyday life.

Amazon’s customer-centric design philosophy was at the core of Alexa’s success. They focused on making the technology easy to use and tailored to the needs and preferences of individual users. This personalization created a more immersive and convenient experience, from setting timers to controlling smart home devices. Alexa’s extensive ecosystem of third-party skills and integrations further expanded its capabilities, cementing Amazon’s position as a leader in the smart home and voice technology market.

The Power of Customer-Centric Design

Amazon’s disruptive success can be attributed to its unwavering commitment to customer-centric design principles. Here’s how this approach has set them apart from their competitors:

• Obsession with Customer Experience : Amazon has consistently demonstrated its obsession with delivering a seamless and enjoyable shopping experience. They use data and analytics to understand customer behavior, preferences, and pain points, allowing them to continually enhance their services.
• Constant Innovation : Amazon understands that the digital landscape is ever-evolving. By fostering a culture of innovation and experimentation, they remain at the forefront of technology trends. Their willingness to take risks and explore new avenues has led to groundbreaking products and services.
• Customer Feedback-Driven Improvement : Amazon actively encourages customer feedback and uses it to improve its offerings. This iterative approach ensures that their services are continually refined and tailored to customer needs.
• Personalization and Recommendations : Amazon leverages data and machine learning to provide personalized product recommendations, enhancing the customer’s shopping experience. This not only drives sales but also fosters customer loyalty.
• Commitment to Speed and Convenience : From one-click ordering to same-day delivery, Amazon’s focus on speed and convenience has raised the bar for the entire industry. Customers have come to expect rapid and hassle-free service.

Amazon’s journey of digital transformation has been nothing short of extraordinary. Through innovations like Amazon Prime, AWS, and Alexa, they have disrupted retail and service industries, setting new standards and forcing competitors to adapt or fade away. What sets Amazon apart is its unrelenting commitment to customer-centric design. By obsessively focusing on delivering the best possible experience for their customers, they have not only thrived but also reshaped the digital landscape. As we move forward in the digital age, Amazon serves as an inspiring example of how a customer-centric approach can fuel innovation and success in the ever-changing world of technology and commerce.

Tag/s:Automation , Business Transformation , Customer Experience , Digital Enterprise ,

About The Author

Institute Fellow Nora Osman, an IT Service Management executive leader with 25 years of diverse experience, excels in every facet of Service Management, from design to support. A devoted advocate for team diversity and individual empowerment, Nora prioritizes fostering a culture of care and associate development. Her expertise spans IT operations, service level management, infrastructure support and process engineering. Her unwavering commitment lies in enhancing customer service across IT service delivery strategies. Nationally recognized as a thought leader and change agent, Nora shares her wisdom through speaking, coaching, mentoring, authoring, and www.noraosman.com. She co-authored "ITIL and the Information Lifecycle" and published 50+ articles in renowned editorials.  Her innovative mindset, motivational prowess, and strategic acumen have earned her accolades from C-suite leaders and recognition as “The Most Inspirational Woman in Business to watch in 2023."  She earned a "Global CXO Certification" from The Wharton School in 2023 and holds numerous IT certifications. Nora actively contributes to executive training programs and serves on boards while mentoring students.

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5 Lessons for Digital Transformations from a Case Study On Amazon

Learn crucial digital transformation insights from Amazon's case study in just 5 lessons.

Within the rapidly changing digital landscape, Amazon is a prime example of a business that has effectively executed digital transformation . Its constant commitment to customer satisfaction, creative application of big data & artificial intelligence, supply chain optimization, robotics integration, & unmatched scalability have completely changed the e-commerce sector. Examining this Amazon case study in detail will reveal five priceless takeaways from its path that businesses of all sizes may apply. These lectures cover the fundamentals of automation, data-driven decision-making, operational effectiveness & the vital ability to grow & change in a world that is changing quickly. Because of its incredible success, organizations looking to succeed in the digital space can use Amazon as a beacon of light. So let’s discuss deeply what we can learn from Amazon & become successful in business. 

5 Lessons From Amazon’s Digital Transformations: 

1. customer experience:.

Customer experience is Amazon's top priority. The company is continually innovating to discover new methods to make the customer experience smoother. For example, Amazon presented a one-click checkout to make it more comfortable for customers to buy products. Amazon also uses artificial intelligence to suggest products to customers based on their previous purchases & browsing history.

Examples of Amazon's customer-centric initiatives:

• Amazon Prime: Amazon Prime is a membership program that offers customers various advantages, including free two-day shipping on millions of things & access to exclusive streaming content.
• Amazon Go: Amazon Go is a chain of cashierless convenience stores where customers can just pick up the items they want & walk out and their purchase will be automatically delegated to their Amazon account.
• Amazon Alexa: Amazon Alexa is a voice assistant that customers can use to shop, play music, get updates & handle their smart home devices.

2. Artificial Intelligence And Big Data:

Artificial intelligence & big data are essential for Amazon's digital transformation. The company uses AI to power its recommendation engine, fraud detection system & customer service chatbots. Amazon also uses big data to analyze customer behavior & trends. This data helps Amazon to improve its products, services & operations.

Examples of Amazon's use of AI & big data in trial:

• Amazon's recommendation engine: Amazon uses AI to suggest products to customers based on their past purchases & browsing history. This helps customers to browse new products that they are likely to be interested in.
• Amazon's fraud detection system: Amazon uses AI to detect & prevent fraudulent transactions. This helps to protect customers & Amazon from financial loss.
• Amazon's customer service chatbots: Amazon uses AI-powered chatbots to answer customer questions & resolve issues. This helps to provide customers with fast & efficient customer support.

3. Supply Chain Optimization:

Supply chain optimization is required for Amazon's success. The company has funded heavily in its supply chain to confirm that it can deliver products to customers quickly & efficiently. Amazon uses AI to optimize its stock levels & shipping lanes. 

Examples of Amazon's innovative supply chain optimization initiatives:

• Amazon's predictive inventory management system: Amazon uses AI to predict customer demand & ensure that it has the right products in stock at the right time. This helps to minimize stockouts & overstocking.
• Amazon's dynamic shipping routes: Amazon uses AI to customize its shipping routes based on real-time traffic situations & weather information. This helps to make sure that customers receive their products as fast as possible.
• Amazon's fulfillment center network: Amazon has a network of fulfillment centers all around the world. This allows the company to supply products to customers fast, even if they live in isolated areas.

4. Robotics

Robotics is another key element of Amazon's digital transformation. The company uses robots in its fulfillment centers to pick, pack & ship products. Robotics has helped Amazon to improve the efficiency and accuracy of its fulfillment operations.

Examples of Amazon's use of robots in practice:

• Amazon's robotic pickers: Amazon uses robotic pickers to pick items from warehouse shelves. This helps to speed up the picking process & reduce errors.
• Amazon's robotic packers: Amazon uses robotic packers to pack items into boxes. This helps to improve the accuracy & speed of the packing process.
• Amazon's robotic shippers: Amazon uses robotic shippers to move boxes around its fulfillment centers & load them onto trucks. This helps to enhance the efficiency of the shipping procedure.

5. The ability to Scale

Scalability is important for Amazon's growth. The company has created a scalable infrastructure that can manage millions of transactions per day. Amazon's scalable infrastructure lets the company to grow fast into new markets & launch new products & services.

Examples of Amazon's scalable infrastructure initiatives:

• Amazon Web Services (AWS): AWS is a cloud computing platform that Amazon delivers to businesses & individuals. AWS allows businesses to scale their IT resources up or down as required.
• Amazon's distributed computing platform: Amazon uses a distributed computing platform to manage its huge workload.

Challenges Faced During Amazon's Digital Transformation:

While Amazon's success in digital transformation is indeed remarkable, it's important to acknowledge that their journey was not without challenges. Understanding these challenges can provide valuable insights for organizations embarking on their own digital transformation efforts:

1. Changing customer expectations: 

Amazon's customers have come to expect a high level of convenience & service. The company has had to constantly innovate to keep up with these expectations.

2. Technological challenges:

Amazon has had to invest massively in new technologies like artificial intelligence & big data. This has been a challenge in terms of price, time & expertise.

3. Organizational challenges: 

Amazon has had to transform its organizational culture & structure to support its digital transformation. This has been a challenge for both employees & managers.

4. Competitive challenges: 

Amazon works in a highly competitive industry. The company has had to continually evolve its business model to stay ahead of its rivals.

Here are some specific examples of the challenges that Amazon met during its digital transformation journey:

• When Amazon first launched its online bookstore, it faced the challenge of convincing customers to buy books online. This was a new concept at the time & many people were hesitant to trust their credit card information to an online retailer. Amazon overcame this challenge by offering a number of customer-friendly features, such as free shipping & a generous return policy.
• As Amazon expanded its business into new areas like electronics & apparel, it faced the challenge of building relationships with new suppliers. Amazon had to develop a system for evaluating & onboarding new suppliers & it had to negotiate favorable pricing & terms.
• As Amazon's customer base grew, it faced the challenge of managing its inventory & shipping operations efficiently. Amazon had to develop sophisticated systems for tracking its inventory levels & optimizing its shipping routes.
• As Amazon joined new markets, it faced the challenge of adjusting its business model to regional cultures & rules. For example, Amazon had to learn how to capitulate with different tax laws & labor regulations in various countries.

Amazon has successfully overpowered all of these challenges & it is now one of the most successful businesses in the world. The company's digital transformation has been a critical factor in its victory.

In addition to the challenges listed above, Amazon has also faced challenges like

• Cybersecurity: Amazon is a prime target for cyberattacks & the company has had to invest laboriously in cybersecurity actions to rescue its customers' data.
• Counterfeit goods: Amazon has had to take steps to fight the sale of fake goods on its platform.
• Labor practices: Amazon has been criticized for its toil practices, especially in its fulfillment centers. The company has taken steps to grow its labor practices, but it continues to face scrutiny.

Key Technologies and Tools in Amazon's Digital Transformation:

Amazon's digital transformation success is underpinned by a strategic adoption of various cutting-edge technologies & tools. Understanding these key elements can offer valuable insights into their transformation journey:

1. Cloud computing: 

Amazon Web Services (AWS) is Amazon's cloud computing platform. AWS supplies a wide range of services, including computing, storage, networking, databases, analytics, machine learning & artificial intelligence. AWS permits Amazon to raise its IT resources up or down as required & to develop & deploy new applications quickly & efficiently.

2. Big data: 

Amazon uses big data to investigate customer manners & trends and to enhance its products, services & processes. Amazon collects data from different sources, including customer purchases, website visits & social media interactions. Amazon then uses this data to generate insights that can be used to grow the customer experience, develop new products & services, and customize operations.

3. Machine learning: 

Amazon uses machine learning to develop & improve its AI applications. Machine learning permits Amazon's AI applications to learn from data & improve their implementation over time.

4. Internet of Things (IoT): 

Amazon also uses IoT technology to improve its procedures & customer experience. For example, Amazon uses IoT sensors to track the movement of products through its fulfillment centers & to monitor the temperature & humidity in its warehouses.

In addition to these key technologies, Amazon also uses many other tools to sustain its digital transformation. For example, Amazon uses the following:

1. Software development tools: 

Amazon uses a variety of software development tools, including Git, Jira & Confluence. These tools help Amazon's developers to build & maintain high-quality software applications.

2. Project management tools: 

Amazon uses project management tools, like Asana and Monday.com, to track the progress of its digital transformation projects & to ensure that they are completed on time & within budget.

3. Communication tools: 

Amazon uses communication tools, like Slack & Zoom, to facilitate communication & collaboration between its employees.

4. Customer relationship management (CRM) software: 

Amazon uses CRM software to manage its customer relationships. CRM software helps Amazon to track customer interactions, identify sales opportunities & provide better customer service.

5. Enterprise resource planning (ERP) software: 

Amazon uses ERP software to manage its business processes like accounting, manufacturing & inventory management. ERP software helps Amazon to improve the efficiency & accuracy of its operations.

Conclusion:

Amazon's digital transformation journey serves as a beacon of creation, innovation & adaptability in a heavily evolving digital landscape. As we've explored the five key lessons from Amazon's case study, along with the challenges they encountered & the technologies that fueled their transformation, it's clear that the company's success is not a mere stroke of luck but a result of meticulous planning, strategic execution & relentless commitment to customer satisfaction. If you are looking for a digital transformation tool for your business partner with Hybrowlabs .

1. How did Amazon prioritize customer experience in its digital transformation?

Amazon placed customer satisfaction at the core of its digital transformation efforts by focusing on personalization, user-friendly interfaces & customer feedback. The company's commitment to providing a seamless shopping experience helped build customer loyalty & retention.

2. What role did artificial intelligence and big data play in Amazon's success?

Artificial intelligence & big data were instrumental in Amazon's success. These technologies powered customer recommendations, inventory management & fraud detection, leading to data-driven decision-making & improved operational efficiency.

3. How did Amazon optimize its supply chain through digital transformation?

Amazon optimized its supply chain by implementing real-time inventory management, demand forecasting & logistics efficiency. This streamlined operations reduced costs & enabled faster delivery to customers.

4. What were the key applications of robotics in Amazon's digital transformation?

Robotics played a crucial role in Amazon's warehouses, automating tasks like picking, packing, & inventory management. This automation enhanced speed, accuracy & cost-effectiveness in fulfillment operations.

5. How did Amazon's ability to scale impact its digital transformation journey?

Amazon's ability to scale was supported by its cloud computing platform, Amazon Web Services (AWS). This allowed the company to rapidly expand its operations & innovate, providing the necessary infrastructure & services for growth.

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The Integration of Digital Business Models: The Amazon Case Study

• First Online: 21 May 2022

Cite this chapter

• Carlo Bagnoli 10 ,
• Andrea Albarelli 11 ,
• Stefano Biazzo   ORCID: orcid.org/0000-0003-3373-2964 12 ,
• Gianluca Biotto 13 ,
• Giuseppe Roberto Marseglia 14 ,
• Maurizio Massaro   ORCID: orcid.org/0000-0001-6461-2709 15 ,
• Matilde Messina 13 ,
• Antonella Muraro 16 &
• Luca Troiano 17  

Part of the book series: Future of Business and Finance ((FBF))

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The final chapter involves the description of the Amazon case study. The intention is to reconnect the various categorizations illustrated in the previous chapter to a real-world example for the purpose of presenting a successful case of business disruption as Amazon is known to have disrupted retail. The analysis aims at highlighting the fact that Amazon combines all the business model frameworks described in the preceding chapters as well as investigating their coexistence within a single organization.

The present chapter also explains a few methodologies which have been developed in order to guide companies through the process of disrupting their existing business models and facilitating the shift towards an innovative framework. Digital technologies can ease the above-mentioned transition as firms are required to select the technological advancements enabling them to accomplish particular organizational goals.

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Department of Management, Ca’ Foscari University of Venice, Venice, Italy

Carlo Bagnoli

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Andrea Albarelli

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Bagnoli, C. et al. (2022). The Integration of Digital Business Models: The Amazon Case Study. In: Digital Business Models for Industry 4.0. Future of Business and Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-97284-4_4

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Amazon’s Role in Digital Transformation

by Accelery Inc. | Apr 6, 2022

It all started as a bookseller’s pipe dream.  

The biggest e-commerce marketplace and cloud computing platform worldwide has been ordered by nearly every home, at least once. In its 25 years of creation, the website fields more than 200 million people monthly — more than the entire population of Russia.

Amazon is the fourth company to reach a $1 trillion market cap, and is breaching the $2 trillion threshold .   It will join only Microsoft and Apple in that category. Apple, first closed at the $2 trillion thresholds on Aug. 20, 2020 and Microsoft did so on June 24, 2021. Amazon will be the fastest to go from $1 trillion to $2 trillion.

By September 2021, 65% of Amazon customers held a   yearly membership to the site.  

The company runs two models for business: both first-party and third-party reselling, alongside providing subscription services and owning numerous companies.

Stock prices — currently priced around   $3,500+ a share — are forecasted to be $5,000+ in 2030, with generous predictions seeing increases up to $7,000+.  

Origins of Amazon

Even though it started as an online bookstore in 1995, creator Jeff Bezos always pictured it as an “everything store” — quickly adding other items across the e-commerce platform. That included everything from a Dewalt screwdriver to a giant plush Pokemon Pikachu stuffed critter (see this delightfully ‘90s picture here ).  

The previously named “Cadabra” evolved into “Amazon”, based on the largest river in the world, capable of reaching everyone across the earth.  

For the first decade and a half of its existence, Amazon was considered a low-profit venture. Bezos reinvested most of the profits back into the company.  

By the beginning of the century, Amazon had its own distribution hubs; it wasn’t until later in the 2000s that the company started its own delivery services. New ways to generate revenue were considered during this transformative decade for the company, including hardware (Kindle in 2007), streaming (Prime in 2005) electronics (Echo in 2018), and acquisitions. Chiefly, this last ideation has made the retailer a company gobbler.  

Across the Amazon arsenal, the company has invested in at least 128 companies over the last two decades. These include: artificial intelligence inventions, cloud computing, financial services, clothing, accessories, hardware, food and beverages, media production, publishing, social networking, and transportation. In fact, there isn’t a market sector that the company hasn’t considered merging or acquiring. The biggest ones by cost value include : Whole Foods ($13.7 billion), Metro-Goldwyn-Mayer ($8.5 billion), Zoox ($1.2 billion), Zappos ($1.2 billion), and Ring ($970 million).  

Bezos stepped down as CEO in Q3 2021, but still operates as the largest shareholder, holding more than a 10% stake in the company.

Amazon’s Competition Analysis  

In 2020, Amazon was ranked first in company revenue among global publicly-traded internet corporations. The closest competitor was Google ($181.7 billion) and Alibaba ($109.5 billion). In terms of revenue, it is the third-largest public company in the world, behind only Walmart and China’s Petrochemical Corporation.  

Though they dominate a large chunk of the market share, top competitors include: online stores (21% of total retail sales), eBay (which saw its best net revenue since 2013), Walmart (the primary rival, although Wally World has a 30-year edge in terms of brand loyalty), and Alibaba (cloud computing is on a 60% year-on-year rise).  

Current Valuation  of Amazon

The company started Amazon Web Services (or AWS) in the early 2000s. The subsidiary provides on-demand cloud computing platforms on a pay-as-you-go basis. There are 200 cloud services available, all without any long-term contracts or complex licensing.  

Amazon headquarters are currently in Seattle, with 235 additional office locations across 36 countries.  

Amazon is one of the world’s most valuable brands and is a Big Five American IT company — alongside Alphabet, Apple, Meta (formerly Facebook), and Microsoft. Amazon Prime alone has over 200 million subscribers worldwide. The company is the second-largest private employer in the United States.  

In 2010, the company’s revenue was $34.20 billion; 2021 saw earnings of $469.82 billion. Based on their Q4 FY 2021 financials , the United States was the company’s biggest market with $314 billion. Germany ranked second ($37.3 billion), followed by the UK ($31.9 billion) and Japan ($23.07).  

The company recently announced suspending shipments and Prime Video streaming to Russia, in protest to the country’s invasion of Ukraine. Their losses were recuperated by adding a focus on Western European expansion, increasing their workforce and logistics across the region’s network.  

Digital Transformation  

Over the last decade, Amazon has increased their web services by 11%. As consumers and trends shift, Amazon was an industry leader in adapting to predicted behaviors. In 2021 Q4, AWS generated $17.8 billion, reporting a 40% growth year-over-year. It’s the industry’s largest cloud computing provider, earning more revenue the last quarter than any previous quarter in history. The cloud vendor is currently battling to keep its dominant market share. New customer partnerships — including American Express, Toyota, and United Airlines — made AWS twice as large as its nearest competitor Microsoft Azure.  

The unit concluded the quarter with $5.29 billion in operating income, a 49% increase.  

However, both Azure and additional rival Google Cloud grew faster in their fourth quarter in year-over-year, respectively. To further their development, AWS announced that it will update the useful life of its servers, from four to five years. Additionally, networking equipment increased from five to six years.  

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What Can Amazon Can Teach Us About Successful Digital Transformations?

To gain a comprehensive understanding of how technology can effectively automate and expand our businesses, we need not search beyond the example of Amazon. In this discussion, I aim to explore the key lessons that Amazon can impart regarding digital transformation.

When guiding clients through digital transformations , we consistently refer to case studies and examples illustrating how successful organizations have utilized technology to grow and automate their operations. Among these examples, Amazon stands out as a remarkable success story. Their utilization of technology and commitment to digital transformation have been unparalleled, contributing to their status as one of the fastest-growing companies in history.

Today, my objective is to delve into some of the valuable lessons we can learn from Amazon, particularly in their adept use of emerging technologies. These insights may prove invaluable as your business embarks on its own digital transformation journey .

Table of Contents

Customer Experience

One of the initial lessons we can glean from Amazon's technology initiatives is their unwavering commitment to enhancing the customer experience . When we consider the genesis of Amazon, we find it emerged as a pioneer in the e-commerce realm during the late 1990s. This was a time when people were still unfamiliar with website usage, and e-commerce was a relatively novel concept.

However, Amazon distinguished itself by offering a remarkable customer experience. This commitment to customer satisfaction not only characterized the company's early days but also persisted as it continued to advance, expand, and evolve.

When we discuss "customer experience," we refer to Amazon's ability to simplify the purchasing process, facilitate product discovery, provide customer reviews to aid informed decision-making, offer sales rankings to gauge product popularity, and suggest items based on past purchasing behaviors. These strategies not only bolstered revenue generation but also fostered stronger, lasting customer relationships.

In the context of your digital transformation efforts, the key question arises: How can you enhance the customer experience within your organization? What measures can you undertake to ensure that technology serves as an enabler, rather than an impediment, in delivering a more positive customer experience? By addressing these questions, you can aspire to increase sales and revenue while fostering customer satisfaction.

Artificial Intelligence and Big Data

Another valuable lesson from Amazon that applies to digital transformations is their emphasis on Artificial Intelligence and Big Data. Amazon has established its foundation on collecting vast amounts of data from its customers. Subsequently, they employ algorithms and Artificial Intelligence to discern methods for providing enhanced products and recommendations to customers. Moreover, these data and analytics resources enable Amazon to ensure that customers locate their desired products precisely when they need them.

The utilization of Big Data and artificial intelligence also plays a crucial role in optimizing Amazon's inventory management and supply chain operations. By effectively capturing data throughout their supply chain , they achieve greater efficiency. I will elaborate on Supply Chain management shortly.

What is particularly noteworthy about Amazon is their exceptional proficiency in artificial intelligence and Big Data. They have invested in enormous data centers to process the copious amounts of data they accumulate. This infrastructure allows them to scale and hyper-scale data management, artificial intelligence, machine learning, and various algorithms for the purpose of business growth and enhancing the customer experience.

Amazon's expertise in this domain has led to the creation of Amazon Web Services (AWS), an arm of the company that originated from their core competency in data management, business intelligence, artificial intelligence, and related areas. This development underscores their prowess in data processing and computational power, which is now available as a third-party service for both B2B and B2C organizations.

In your own digital transformation endeavors, consider the role of artificial intelligence, Big Data, and analytics in harnessing the power of data through technologies such as artificial intelligence, machine learning, and robotic process automation (RPA), among others. These tools can be instrumental in maximizing the potential of your data resources.

Supply Chain Optimization

In the 1980s, Walmart, the prominent retailer, pioneered a novel approach to supply chain management , thereby spearheading the Supply Chain Management movement. However, it was Amazon that elevated this concept to an entirely new level in the late 1990s and into the 2000s. During this period, Amazon embarked on a journey to significantly enhance the efficiency and effectiveness of its global supply chain.

Amazon's approach encompassed several key strategies. Firstly, they constructed massive warehouses capable of accommodating substantial inventory. These warehouses served as hubs for collecting vast amounts of data and customer information, facilitating the swift processing and dispatch of products. Over time, as Amazon expanded, their network of warehouses grew extensively.

Presently, in most major North American cities, Amazon operates large warehouses that enable rapid product delivery, often achieving overnight or same-day delivery due to their close proximity to customers.

Furthermore, Amazon pursued vertical integration of its supply chain by not only expanding its warehouse infrastructure but also by assuming control of its fleet management. Previously, Amazon rented mail trucks from the US Postal Service to supplement their delivery network. However, they gradually brought this aspect in-house, establishing and managing their fleet of delivery trucks. This vertical integration empowers Amazon to respond swiftly to customer demands and achieve remarkable speed in product delivery.

As we consider our digital initiatives within our respective organizations, we can draw inspiration from Amazon's supply chain management practices. By optimizing and efficiently managing our supply chains , we can scale our operations, enhance the customer experience, and accelerate the growth of our companies beyond what would have been possible without such strategic focus.

Amazon has leveraged emerging technologies, specifically robotics, to revolutionize its business operations. Although robotics is not an uncommon concept today, with many companies implementing it in manufacturing facilities and warehouses, Amazon's scale and utilization of robotics are unparalleled.

Amazon employs robotics extensively for tasks such as picking, packing, and shipping products within its warehouses. They also employ robotics for inventory management, including the reception of inventory into the warehouses. Additionally, Amazon has explored the use of drones, which can be considered a form of robotics, for the delivery of products to end customers in the final leg of the delivery process.

Amazon's mastery of robotics has led to the establishment of a separate division known as Amazon Robotics. Interestingly, Amazon Robotics, a former client of ours, now sells robotics technology to non-Amazon companies, assisting them in automating their own warehouses and manufacturing operations. This underscores Amazon's profound expertise in the realm of robotics.

While robotics may or may not directly apply to your digital transformation efforts, it serves as a compelling example of thinking innovatively about the adoption of non-traditional or emerging technologies. Exploring high-value areas within the spectrum of emerging technologies can potentially yield transformative benefits for your business.

This strategic approach may offer a more prudent allocation of IT budgets, focusing resources on initiatives with a greater potential for business value, as opposed to investing in costly back-office systems or other endeavors that may yield fewer tangible benefits.

Ability To Scale

The final lesson from Amazon that I'd like to discuss today revolves around their remarkable ability to leverage technology for rapid and substantial company growth. Few companies have achieved such rapid and significant scaling as Amazon. Their ability to do so can be attributed to their business model, innovation in technology usage, and a relentless focus on scalability.

For years, Amazon operated at a loss because they made substantial investments in their business and concentrated on scaling. One noteworthy example from over a decade ago involved Jeff Bezos deciding to introduce Amazon Prime, despite opposition from the CFO. Amazon Prime, a subscription model with an annual fee, offered faster delivery to its members. At a mere $10 per year, the fee did not generate significant revenue, and in fact, Amazon was technically losing money on it.

However, Bezos believed that it would drive customer loyalty and lead to increased spending on Amazon, playing the long-term game. Despite the CFO's reservations, Bezos proceeded with the idea, and it has since become a cornerstone of Amazon's success.

These decisions reflect Amazon's unwavering focus on scale and a willingness to think beyond short-term gains. They make long-term investments that ultimately benefit employees, shareholders, and consumers alike. It underscores the importance of using technology, process improvements, and supply chain optimization not just for the sake of innovation but to scale organizations, drive growth, and secure long-term prospects.

In summary, Amazon's journey teaches us valuable lessons about digital transformation.

I would enjoy brainstorming ideas with you if you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, so please feel free to contact me at  [email protected] . I am happy to be a sounding board as you continue your digital transformation journey .

Be sure to download the newly released 2024 Digital Transformation Report to garner additional industry insight and project best practic es.

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Lessons from Amazon’s Early Growth Strategy

If you’re interested in strategies for scaling start-ups, this episode is for you.

• Apple Podcasts

So much has been written about Amazon’s outsized growth. But Harvard Business School professor Sunil Gupta says it’s the company’s unusual approach to strategy that has captured his scholarly attention. Gupta has spent years studying Amazon’s strategy and its founder and former CEO Jeff Bezos.

In this episode, Gupta shares how Amazon upended traditional corporate strategy by diversifying into multiple products serving many end users, instead of having a narrow focus.

He argues that some of Amazon’s simplest business strategies — like their obsession with customers and insistence on long-term thinking — are approaches that companies, big and small, can emulate.

Key episode topics include: strategy, innovation, leadership, scaling, Jeff Bezos, long-term thinking, customer focus.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

• Listen to the full HBR IdeaCast episode: How Jeff Bezos Built One of the World’s Most Valuable Companies (2020)
• Find more episodes of HBR IdeaCast
• Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org .

HANNAH BATES: Welcome to HBR On Strategy , case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business.

So much has been written about Amazon’s outsized growth. But Harvard Business School professor Sunil Gupta says it’s the company’s unusual approach to strategy that has captured his scholarly attention.

Gupta has spent years studying Amazon’s strategy and its founder and former CEO, Jeff Bezos.

In this episode, Gupta shares how Amazon upended traditional corporate strategy by diversifying into multiple products serving many end users instead of focusing more narrowly.

And he argues that some of their simplest business strategies – like their obsession with the customer and insistence on long-term thinking – are approaches that companies, big and small, should emulate.

If you’re interested in innovation strategy, this episode is for you. It originally aired on HBR IdeaCast in November 2020. Here it is.

ALISON BEARD:  Welcome to the HBR IdeaCast from Harvard Business Review.  I’m Alison Beard.

If you had to name the most successful business leader alive today, who would you say?  I can’t hear you from my basement podcasting room, but I would bet that for many of you, the answer is Jeff Bezos, CEO of Amazon.  This is a man who over the past 25 years turned his online bookstore startup into a diversified company currently valued at $1.6 trillion.

Amazon is a digital retailing juggernaut, it’s also a web services provider, media producer, and manufacturer of personal technology devices like Kindle and Echo.  Oh, and Bezos also owns the Washington Post and Blue Origin, a space exploration company.  Forbes tells us he is the richest person in the world.

How did he accomplish so much?  How did he change the business landscape?  What mistakes has he made along the way?  A new collection of Bezos’s own writing, which full disclosure, my colleagues at Harvard Business Review Press have published, offer some insights.  Here’s a clip from one speech that’s included.  The book is called Invent and Wander.

And our guest today, who has spent years studying both Amazon and Bezos, is here to talk with me about some of the key themes in it, including the broad drivers of both the company and the CEO’s success.  Sunil Gupta is a professor of business administration at Harvard Business School and cochair of its executive program, and cochair of its executive program on driving digital strategy, which is also the title of his book.  Sunil, thanks so much for being on the show.

SUNIL GUPTA:  Thank you for having me, Alison.

ALISON BEARD:  So Invent and Wander.  I get that Bezos is inventive.  You know, he created a new way for us to buy things – everything.  How is he also a wonderer?

SUNIL GUPTA:  So he’s full of experiments.  His company and his whole style is known for experimentation, and he says that in so many words that if you want big winners, then you have to be willing to have many failures.  And the argument is, one big winner will take care of a thousand failed experiments.  So I think that’s the wandering part.  But also his experiments are not aimless.  There is a certain thought and process behind what experiments to do and why they will connect to the old, old picture of what Amazon is today.

ALISON BEARD:  And your expertise is in digital strategy.  How does he break the traditional rules of strategy?

SUNIL GUPTA:  So for the longest time the way, at least I was taught in my MBA program and the way we teach to our MBA students and executives, is strategy is about focus.  But if you look at Amazon, Amazon certainly doesn’t look like it’s focusing on anything, so obviously Jeff Bezos missed that class, otherwise it’s a very, very different thing.

And then you’d say, why is it that so called lack of focus strategy seems to be working for Amazon?  And I think the fundamental underlying principle that he’s guiding his whole discussion of strategy is, he’s changed the rules of strategy.  So the old rules of strategy were, the way you gained competitive advantage is by being better or cheaper.  So if I am selling you a car, my car is better of cheaper.  But the inherent assumption in that strategy statement is, I’m selling one product to one customer.  And what Amazon is basically arguing is, the digital economy is all about connection.  We have got to connect products and connect customers.  Let me explain why that is so powerful.

So connecting products, here the idea is, I can sell you, this is a classic razor and blade strategy.  I can sell you a razor cheap in order to make money on the blade.  So I can sell you Kindle cheap in order to make money on the ebooks.  Now, at some level you might say, hey, razor and blade have been around forever.  What’s so unique today?  I think unique today is razor could be in one industry and blades could be in completely different industrys.

So for example, if you look at Amazon’s portfolio of businesses, you sort of say, not only Amazon is an e-commerce player, but also is making movies and TV shows, its own studio.  Well, why does it make sense for an e-commerce player, an online retailer to compete with Hollywood.  Well, Walmart doesn’t make movies.  Macy’s doesn’t make movies?  So why does it make sense for Amazon to make movies?

And I think once you dig into it, the answer becomes clear that the purpose of the movies is to keep and gain the Prime customers. Two day free shipping is fine, but if  you ask me to pay $99 or $119 for two day free shipping, I might start doing the math in my head, and say, OK, how many packages do I expect to get next year?  And is the Prime membership worth it or not?

But once you throw in, in addition to the two-day free shipping, you throw in some TV shows and movies that are uniquely found only on Amazon, I can’t do this math.  And why is Prime customers important to Amazon?  Because Prime customers are more loyal.  They buy three or four times more than the non-Prime customers, and they’re also less price sensitive.

And in fact, Jeff Bezos has said publicly that every time we win a Golden Globe Award for one of our shows, we sell more shoes.  So this is, and he said it in your book, Invent and Wander, also, that we might be the only company in the world which has figured out how winning Golden Globe Awards can actually translate into selling more products on the online commerce.

So this is a great example of the razor being in a very different industry and blade being in another industry.  Take another example.  Amazon has a lending business where they give loans to small and medium enterprises. If Amazon decides to compete with banks tomorrow, Amazon can decide to offer loans to the small merchants at such a low price that banks would never be able to compete.  And why would Amazon be able to do that?  Because Amazon can say, hey, I’m not going to make money on loans, as much money on loans, but I’ll make more money when these businesses, small businesses grow and do more transactions on my marketplace platform.  And I get more commissions.  So again, loan can become my razor in order to help the merchants grow and make money on the transaction and the commission that I get from that.  The moment I make somebody else’s, in this case the banks, core business my razor, they will make a very hard time competing.  So I think that’s the key change, the fundamental rules of strategy and competition in that direction.

The second part of connection is connecting customers, and this is the classic network effect.  So marketplace is a great example of network effects.  The more buyers I have, the more sellers I have.  The more sellers I have, the sellers I have, the more buyers I get, because the buyers can find all the items.  And that becomes flywheel effect, and it becomes a situation where it’s very hard for a new player to complete with Amazon.

ALISON BEARD:  In this diversification that Amazon has done, how have they managed to be good at all of those things?  Because they’re not focused.  You know, they’re not concentrated on an area of specific expertise.  So how have they succeeded when other companies might have failed because they lacked that expertise, or they were spreading themselves too thin?

SUNIL GUPTA:  So I think it depends on how you define focus.  Most of us, when we define focus, we sort of define focus by traditional industry boundaries, that I’m an online retailer, therefore going into some other business is lack of focus.  The way Amazon thinks about is focus on capabilities.

So if you look at it from that point of view, I would argue that Amazon had three fundamental core capabilities.  Number one, it’s highly customer focused, not only in its culture, but also in its capability in terms of how it can actually handle data and leverage data to get customer insight.  The second core capability of Amazon is logistics.  So it’s now a world class logistics player.  It uses really frontier technology, whether it’s key word, robotics, computer vision, in its warehouse to make it much more efficient.

And the third part of Amazon’s skill or the capability is its technology.  And a good example of that is Amazon Web Services, or AWS.  And I think if you look at these three core capabilities, customer focus and the data insight that it gets from that, the logistics capability, and the technology, everything that Amazon is doing is some way or the other connected to it.  In that sense, Amazon, and there’s no lack of focus, in my judgment on Amazon.

Now, if he starts doing, starts making cream cheese tomorrow or starts making airplane engines, then I would say, yes, it’s got a lack of focus.  But one of the other things that Jeff Bezos has said again and again is this notion of work backwards and scale forward.  And what that means is, because you’re customer obsessed, you sort of find ways to satisfy customers, and if that means developing new skills that we don’t have because we are working backwards from what the customer needs are, then we’ll build those skills.

So a good example of that is, when Amazon started building Kindle, Amazon was never in the hardware business.  It didn’t know how to build hardware.  But Bezos realized that as the industry moved, people are beginning to read more and more online, rather, or at least on their devices, rather than the physical paper copy of a book.  So as a result, he says, how do we make it easier for consumers to read it on an electronic version?  And they’re spending three years learning about this capability of hardware manufacturing.  And by the way, Kindle came out long before iPad came out.  And of course, that capability now has helped them launch Echo and many other devices.

ALISON BEARD:  Right.  So it’s the focus on the customer, plus a willingness to go outside your comfort zone, the wander part.

SUNIL GUPTA:  Exactly.

ALISON BEARD:  Yeah.  How would you describe Bezos’s leadership style?

SUNIL GUPTA:  So I think there are at least three parts to it.  One is, he said right from day one that he wants to be a long-term focus.  The second thing is being customer obsessed.  And many times he has said that he can imagine, in the meetings he wants people to imagine an empty chair.  That is basically for the customer. And he says, we are not competitor focused.  We are not product focused.  We are not technology focused.  We are customer focused.  And the third is, willingness to experiment.  And fail, and build that culture in the company that it’s OK to fail.

ALISON BEARD:  What about personally, though?  Is he a hard charger?  Is he an active listener?  What’s it like to be in a room with him?

SUNIL GUPTA:  Oh, he’s certainly a hard charger.  I mean, he’s also the kind of guy, when he hires people, he says, you can work long, hard, or smart.  But at Amazon, you can choose two out of three.  And I think this is similar to many other leaders.  If you look at Steve Jobs, he was also a very hard charging guy.  And I think some people find it exhilarating to work with these kind of leaders.  Some find it very tough.

ALISON BEARD:  Do you think that he communicates differently from other successful CEOs?

SUNIL GUPTA:  So the communication style that he has built in the company is the very famous now, there’s no PowerPoints.  So it’s a very thoughtful discussion.  You write six-page memos, which everybody, when their meeting starts, everybody sits down and actually reads the memo.

In fact, this was a very interesting experience that I had.  One of my students, who was in the executive program, works at Amazon in Germany.  And he is, he was at that point in time thinking of moving to another company and becoming a CEO of that company.  So he said, can I talk to you about this change of career path that I’m thinking about?  I said, sure.  So we set up a time, and five minutes before our call, he sends me an email with a six-page memo.  And I said, well, shouldn’t he have sent this to me before, so I could at least look at it?  He says, no, that’s the Amazon style.  We’ll sit in silence and read it together.  And so I read it together, because then you’re completely focused on it.  And then we can have a conversation.  But this discipline of writing a six-page memo, it’s a very, very unique experience, because you actually have to think through all your arguments.

ALISON BEARD:  You also mentioned the long term focus, and that really stood out for me, too, this idea that he is not at all thinking of next year.  He’s thinking five years out, and sometimes even further.  But as a public company, how has Amazon been able to stick to that?  And is it replicable at other companies?

SUNIL GUPTA:  I think it is replicable.  It requires conviction, and it requires a way to articulate the vision to Wall Street that they can rally behind.  And it’s completely replicable.  There are other examples of companies who have followed a similar strategy.  I mean, Netflix is a good example.  Netflix hadn’t made money for a long period of time.  But they sold the vision of what the future will look like, and Wall Street bought that vision.

Mastercard is exactly the same thing.  Ajay Banga is giving three year guidance to Wall Street saying, this is my three-year plan, because things can change quarter to quarter.  I’m still responsible to tell you what we are doing this quarter, but my strategy will not be guided by what happens today.  It will be guided by the three-year plan that we have.

ALISON BEARD:  There are so many companies now that go public without turning any profit, whereas Amazon now is printing money, and thus able to reinvest and have this grand vision.  So at what point was Bezos able to say, right, we’re going to do it my way?

SUNIL GUPTA:  I think he said it right from day one, except that people probably didn’t believe it.  And in fact, one of the great examples of that was, when he was convinced about AWS, the Amazon Web Services, that was back in the early 2000s, when a majority of the Wall Street was not sure what Jeff Bezos was trying to do, because they say, hey, you are an online retailer.  You have no business being in web services.  That’s the business of IBM.  And that’s a B2B business.  You’re in a B2C business.  Why are you going in there?

And Bezos said, well, we have plenty of practice of being misunderstood.  And we will continue with our passion and vision, because we see the path.  And now he’s proven it again and again why his vision is correct, and I think that could give us more faith and conviction to the Wall Street investors.

SUNIL GUPTA:  Oh, absolutely.  And he’s one of the persons who has his opinion, and you always surround yourself with people better than you.

ALISON BEARD:  How has he managed to attract that talent when it is so fiercely competitive between Google, Facebook, all of these U.S. technology leaders?

SUNIL GUPTA:  So a couple of things I would say.  First of all, it’s always good fun to join a winning team.  And all of us want to join a winning team, so this certainly is on a trajectory which is phenomenal.  It’s like a rocket ship that is taking off and has been taking off for the last 25 years.  So I think that’s certainly attractive to many people, and certainly many hard charging people who want to be on a winning team.

And a second thing is, Amazon’s culture of experimentation and innovation.  That is energizing to a lot of people.  It’s not a bureaucracy where you get bogged down by the processes.  So the two type of decisions that we talked about, he gives you enough leeway to try different things, and is willing to invest hundreds of millions of dollars into things that may or may not succeed in the future.  And I think that’s very liberating to people who are willing to take on the ownership and build something.

ALISON BEARD:  But don’t all of the tech companies offer that?

SUNIL GUPTA:  They do, but if you think about many other tech companies, they’re much more narrow in focus.  So Facebook is primarily in social media.  Google is primarily in search advertising.  Yes, you have GoogleX, but that’s still a small part of what Google does.  Whereas if you ask yourself what business is Amazon in, there are much broader expansive areas that Amazon has gone into.  So I think the limits, I mean, Amazon does not have that many limits or boundaries as compared to many other businesses in Silicon Valley.

ALISON BEARD:  So let’s talk a little bit about Bezos’s acquisition strategy.  I think the most prominent is probably Whole Foods, but there are many others.  How does he think about the companies that he wants to bring in as opposed to grow organically?

SUNIL GUPTA:  So some acquisitions are areas where he thinks that he can actually benefit and accelerate the vision that he already has.  So for example, the acquisition of Kiva was to improve the efficiency and effectiveness of the systems that he already put in place in his warehouse.  And logistics and warehouse is a key component or key part of Amazon’s business, and he saw that Kiva already was ahead of the curve in technology that he probably wanted to have that in his own company.  So that was obvious acquisition, because that fits in the existing business.

Whole Foods is kind of a slightly different story, in my judgment, because I some ways, you can argue, why is Amazon, an online player, buying an offline retail store, Whole Foods?  And in fact, they bought it at 27% premium.  So that doesn’t make sense for an online retailer commerce to go to offline channels.  And I think, in fact, part of the reason in my judgment is, it’s not just Whole Foods, but it’s about the food business, per se.  And why is Amazon so interested in food?  In fact, Amazon has been trying this food business, online food delivery for a long period of time without much success.  And Whole Foods was one, another way to try and get access to that particular business.  And why is that so important to Amazon, even though you could argue, food is a low margin business?

And I would say, part of the reason is, food is something, grocery is something that you buy every week, perhaps twice a week.  And if I, as Amazon, can convince you to buy grocery online from Amazon, then I’m creating a habit for you to come onto Amazon every week, perhaps twice a week.  And once you are on Amazon, you will end up buying other products on Amazon.  Whereas if you are buying electronics, you may not come to Amazon every day.

So this is a habit creation activity, and again, it may not be a very high margin activity to sell you food.  But I’ve created a habit, just like Prime.  I’ve created a loyal customer where you think of nothing else but Amazon for your daily needs, and therefore you end up buying other things.

ALISON BEARD:  And Amazon isn’t without controversy.  You know, and we should talk about that, too.  First, there are questions about its treatment of warehouse employees, particularly during COVID.  And Bezos, as you said, has always been relentlessly focused on the customer.  But is Amazon employee centric, too?

SUNIL GUPTA:  So I think there is definitely some areas of concern, and you rightly said there is a significant concern about the, during the COVID, workers were complaining about safety, the right kind of equipment.  But even before COVID, there were a lot of concerns about whether the workers are being pushed too hard.  They barely have any breaks.  And they’re constantly on the go, because speed and efficiency become that much more important to make sure customers always get what they are promised.  And in fact, more than promised.

Clearly Amazon either hasn’t done a good job, or hasn’t at least done the public relations part of it that they have done a good job.  Now, if you ask Jeff Bezos, he will claim that, no, actually, they have done things.  For example, they offer something called carrier choice, where they give 95% tuition to the employees to learn new skills, whether they’re relevant to Amazon or not.  Pretty much like what Starbucks does for its baristas, for college education and other things.  But I think more than just giving money or tuition, it requires a bit of empathy and sense that you care for your employees, and perhaps that needs, that’s something that Amazon needs to work on.

ALISON BEARD:  And another challenge is the criticism that it has decimated mom and pop shops.  Even when someone sells through Amazon, the company will then see that it’s a popular category and create it itself and start selling it itself.  There’s environmental concerns about the fact that packages are being driven from warehouses to front doors all over America.  And boxes and packaging.  So how has Bezos, how has the company dealt with all of that criticism?

SUNIL GUPTA:  They haven’t.  And I think those are absolutely valid concerns on both counts, that the small sellers who grow to become reasonably big are always under the radar, and there are certainly anecdotal evidence there, small sellers have complained that Amazon had decided to sell exactly the same item that they were so successful in selling, and becoming too big is actually not good on Amazon, because Amazon can get into your business and wipe you away.  So that’s certainly a big concern, and I think that’s something that needs to be sorted out, and Amazon needs to clarify what its position on that area is, because it benefits from these small sellers on his platform.

And your second question about environmental issues is also absolutely on the money, because not only emission issues, but there’s so many boxes that pile in, certainly in my basement, from Amazon.  You sort of say, and it’s actually ironical that Millennials who are in love with Amazon are extremely environmentally friendly.  But at the same time, they would not hesitate to order something from Amazon and pile up all these boxes.  So I think Amazon needs to figure out a way to think about both those issues.

ALISON BEARD:  And at what point will it have to?  I mean, it seems to be rolling happily along.

SUNIL GUPTA:  Well, I think those issues are becoming bigger and bigger, and it’s certainly in the eye of the regulators, also, for some of these practices.  And not only because it’s too big, and there might be monopoly concerns, but these issues will become larger, and any time you become a large company, you become the center of attraction for broader issues than just providing shareholder value.

ALISON BEARD:  Yeah.  So those are weaknesses possibly for the company.  What are some of Bezos’s personal weaknesses that you’ve seen in studying him and the company?

SUNIL GUPTA:  So I think one thing that stands out to me, and at least in the public forums, I have not seen any empathy.  And it’s, I mean, we talk about that the leaders have, should have three qualities.  They should be competent.  They should have a good character.  And they should have compassion.  So he’s certainly very competent.  I mean, he’s brilliant in many aspects, right, from the computer vision and AI and machine learning, to the nuances of data analytics, to the Hollywood production, etc.  He also seems to have good character, at least I have not heard any personal scandals, apart from his other issues in his personal life, perhaps.

Those characteristics of competence and character make people respect you.  What makes people love you is when you show compassion, and at least I haven’t seen compassion or empathy that comes out of him.  I mean, he certainly comes across as a very hard charging, driven person, which probably is good for business.  But the question of empathy is perhaps something lacking right now.

ALISON BEARD:  Yeah.  The other issue is his just enormous wealth.  He did invent this colossally valuable company, but should anyone really be that rich?

SUNIL GUPTA:  Well, I guess that’s, you can say that’s the good or the bad thing about capitalism.  But I think, and again, my personal view is there’s nothing wrong in becoming rich, if you have been successful and done it with hard work and ingenuity.  But how you use your wealth is something that perhaps will define Jeff Bezos going forward.  I think Bill Gates is a great example how he actually has used his wealth and his influence and his expertise and his brilliance into some certain thing that actually is great for humanity.

Now, whether Jeff Bezos does that down the road, I don’t know, whether his space exploration provides that sort of outlet which is both his passion as well as good for humanity, I don’t know.  But at some point in time, I think it’s the responsibility of these leaders to sort of say, my goal is not simply to make money and make my shareholders rich, but also help humanity and help society.

ALISON BEARD:  If you’re talking to someone who’s running a startup, or even a manager of a team at a traditional company, what is the key lesson that you would say, this is what you can learn from Jeff Bezos?  This is what you can put to work in your own profession?

SUNIL GUPTA:  So I would say two things that at least I would take away if I were doing a startup.  One is customer obsession.  Now, every company says that, but honestly, not every company does it, because if you go to the management meetings, if you go to the quarterly meetings, you suddenly go focus on financials and competition and product.  But there’s rarely any conversation on customers.  And I think, as I mentioned earlier, that Jeff Bezos always tells his employee to think of the imaginary chair in which a customer is sitting, because that’s the person that we need to focus on.  Howard Shultz does the same thing at Starbucks, and that’s why Starbucks is so customer focused.

So I think that’s the first part.  And the argument that Bezos gives is, customers are never satisfied.  And that pushes us to innovate and move forward, so we need to innovate even before the rest of the world even sees that, because customers are the first ones to see what is missing in the offering that you have.

And the second I would say that I would take away from Jeff Bezos is the conviction and passion with what you do.  And many times that goes against the conventional wisdom.  And the Amazon Web Services is a great example of that.  The whole world, including the Wall Street Journal and the Wall Street analysts were saying, this is none of Amazon’s business to do web services.  But he was convinced that this is the right thing to do, and he went and did that.

And part of that conviction may come from experiments.  Part of that conviction comes from connecting the dots that he could see that many other people didn’t see.  I mean, that’s why he went, left his job, and went to Seattle to do the online bookstore, because he could see the macro trends as to what the Internet is likely to do.  So, I think that’s the vision that he had.  And once you have the conviction, then you follow your passion.

ALISON BEARD: Sunil, thanks so much for coming on the show.

SUNIL GUPTA:  Thank you for having me. Alison.

HANNAH BATES: That was Harvard Business School professor Sunil Gupta, in conversation with Alison Beard on the HBR IdeaCast .

We’ll be back next Wednesday with another hand-picked conversation about business strategy from Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review.

And when you’re ready for more podcasts, articles, case studies, books, and videos with the world’s top business and management experts, find it all at HBR.org.

This episode was produced by Mary Dooe, Anne Saini, and me, Hannah Bates. Ian Fox is our editor. And special thanks to Maureen Hoch, Nicole Smith, Erica Truxler, Ramsey Khabbaz, Anne Bartholomew, and you – our listener. See you next week.

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How COVID-19 pandemic, Amazon made retailers fundamentally stronger

Analytics: Turning data science into business strategy

In this special feature, ZDNet examines how advances in AI, visualization and cloud technology are shaping modern data analytics, and how businesses are addressing data governance and a potential data science skills gap.

Retailers in 2019 were on a slow march toward becoming irrelevant, roadkill for Amazon and digital wannabes if they were lucky.

Then the COVID-19 pandemic hit in 2020, brick and mortar retail stores closed with the exception of a few players such as Walmart, Target, supermarkets, Home Depot and Lowe's . Suddenly, digital transformation efforts looked a bit more pressing.

Digital sales surged, delivery models emerged, and curbside pickup and store fulfillment became omnichannel staples amid stay-at-home orders.

Fast forward to today and retailers are in a fundamentally different place. This retail environment is about being digital, delivering unified experiences, leveraging smart analytics, building on cloud infrastructure, and putting up a real fight against Amazon. Hell, even foot traffic has returned to bolster already heady digital sales.

The latest batch of retail earnings have highlighted the transformation that's occurred in the retail industry. What has emerged is a  transformation playbook and model for further technology investment. Here's how it happened.

Special feature

Digital transformation: a cxo's guide.

Reimagining business for the digital age is the number-one priority for many of today's top executives. We offer practical advice and examples of how to do it right.

Technology spending accelerated because retailers had no choice. Yes, there were a few retailers who were thinking ahead. Target's purchase of Shipt for instance made it look like the company had a crystal ball . Walmart was heavy into e-commerce before COVID-19 hit. But debt-ridden retailers trying to slow-walk digital transformation stepped on the gas.

Let's hear the retail CEOs tell the tale. Jeffrey Gennette, CEO of Macy's, said on the company's second-quarter earnings conference call:

Our results in the quarter were strong across Macy's, Inc. as many people return to in-person shopping while still continuing to shop online. From off-price to luxury, we are emerging from the pandemic a stronger company than we were before it began. In the second quarter, we attracted nearly 5 million new customers to Macy's, which is a 30% improvement versus 2019. Average customer spend in the quarter was up 10% compared to 2019 and up 2 points compared to the trend in Q1 of 2021.

Edward Stack, executive chairman and chief merchandising officer for Dick's Sporting Goods, said on the company's earnings call:

We said 2021 was going to be the most transformational year in our company's history, and so far, it certainly has been. The investments we've made in technology, infrastructure, space allocation and our team over the past 4-plus years are now paying off.

Best Buy CEO Corie Barry

Corie Barry, CEO of Best Buy, said: "Over the longer term, we are fundamentally in a stronger position than we expected to be in just 2 years ago." Barry could have been talking about much of the retail sector.

Omnichannel went from nice to have to necessary to survive. Target has become an omnichannel poster company as has Walmart. Target CEO Brian Cornell said the transformation that accelerated in 2020 is just starting.

Guests have emerged from a year in which digital was the primary growth driver, and they're now returning to our stores in droves. As a result, the majority of our second quarter growth was driven by the stores channel, where comps grew 8.7% on top of 10.9% a year ago. In addition, traffic accounted for more than 100% of our second quarter growth, in contrast to a year ago when guests were limiting time out of their homes and the bulk of our growth was coming from bigger transactions. Comparable digital sales grew 10% in the second quarter, building on the record growth of 195% last year.

He added that in-store pickup such as its Drive Up service and Shipt account for more than half of its digital sales. "Among those same-day options, Drive Up has quickly grown to be the largest, accounting for more sales than pickup and Shipt combined," he said.

• Target joins Open Compute Project, aims to expand edge computing use cases

Walmart CEO Doug McMillon said:

There are occasions when people want to visit a store, times when they want to pick up and times when they want to have it delivered. We're going to keep innovating and executing to get better at all 3 as our diversified omni model positions us well to gain share in high-growth markets around the world.

Retailers got smarter about data science and analytics. What makes Amazon so formidable? The company has a treasure trove of data to feed models to entice you to shop, subscribe and leverage services.

Dick's Sporting Goods CEO Lauren Hobart

Dick's Sporting Goods CEO Lauren Hobart said the retailer is using data to offer more personalized promotions via its ScoreCard loyalty program. Hobart said a big pillar for the company is increasing its database of athletes--the core customer of Dick's. Hobart said it added 8.5 million athletes to its database in 2020 and 2 million in the most recent quarter. She said:

We have an extensive data science capability, a personalized marketing capability, and we are actively keeping those people in our ecosystem. The omnichannel athlete does have other options. We are capturing data from every single athlete who transact with us in every way, so we are always working to try to get people to convert the ScoreCard. But even when they're not, we've said our active database member is over 30 million active e-mail addresses that we can speak with even if they don't join the program.

Best Buy CEO Barry said the company is leveraging data to predict buying intent as well as train workers to offer better service and increase Net Promoter Scores (NPS).

Retailers understand it's a mobile-first customer. "We continue to improve our online shopping experience. This includes our strategy to lead with mobile, which for the first half of 2021, represented over 50% of our online sales as well as faster delivery times and an enhanced shopping and checkout experience," said Hobart.

Target has added a feature called School List Assist to enable partners to find supplies and buy a list with a click. Another feature, internally known as "promo FOMO", will show Target offers before checking out.

And Best Buy is working on mobile app checkout.

Retailers learned technology investment is now critical to an enduring model.

Macy's Gennette said the company's recent operating leverage will enable it to continue to invest in the business.

We also want to maintain a best-in-class digital experience as we continue to make investments in foundational improvements to keep our online platform current and differentiated digital experiences that provide greater service, discovery and value for our customers. We made advancements in enterprise-wide data and analytics capabilities to improve inventory placement, pickup and delivery options, boosting speed and convenience for online orders.

Walmart's McMillon said the company is investing in technologies that can scale into new businesses across the company. "More than 30 applications across five countries are leveraging cloud-powered checkout for retail transactions. Things like building a 360-view of the customer using machine learning are important for our business in the U.S., but it's also important in other markets. That's why we're now leveraging this technology in Mexico and in Central America," said McMillon.

Target's John Mulligan, chief operating officer, said he's an engineer by training and the bet is that the company can leverage automation to augment the productivity of its employees. Mulligan said:

When our team works to optimize Target's operations, both for today and in the future, we have access to every available tool and technology, robotics, automation, machine learning, artificial intelligence and more. But when we choose to invest in technology, we're not looking to remove the human element from the Target experience. Instead, we're investing to enhance the productivity of our team members, freeing them up to focus on what's most important, like serving our guests. This is another example of the power of "and", and how it runs through every part of our business. The choice doesn't have to be about people or technology. We can invest in both people and their productivity.

Tech Earnings

Amazon's prime big deal days set to return this october, the best amazon labor day deals, the 75+ best labor day 2024 deals: shop amazon, walmart, best buy, and more.

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• Digital Transformation

8 Examples of Innovative Digital Transformation Case Studies (2024)

• Published: January 19, 2022
• Updated: August 21, 2024

With the rapid pace of technological advancement, every organization needs to undergo digital transformation and, most likely, transform multiple times to stay relevant and competitive. 

However, before you can reap the benefits of new technology, you must first get your customers and employees to adapt to this change successfully—and here lies a significant digital transformation challenge.

Organizations thriving in this digital-first era have developed digital innovation strategies prioritizing the change management mindset. This paradigm shift implies that organizations should continuously explore improving business processes .

8 Best Examples of Digital Transformation Case Studies in 2024

• Amazon Business
• Under Armour
• Internet Brands®
• Michelin Solutions

8 Examples of Inspiring Digital Transformation Case Studies

While digital transformation presents unique opportunities for organizations to innovate and grow, it also presents significant digital transformation challenges . Also, digital maturity and levels of digital transformation by sector vary widely.

If you have the budget, you can consider hiring a digital transformation consulting company to help you plan your digitization. However, the best way to develop an effective digital transformation strategy is to learn by example. 

Here are the 8 inspiring digital transformation case studies to consider when undertaking transformation projects in 2024:

1. Amazon extended the B2C model to embrace B2B transactions with a vision to improve the customer experience.

Overview of the digital transformation initiative

Amazon Business is an example of how a consumer giant transitions to the B2B space to keep up with the digital customer expectations. It provides a marketplace for businesses to purchase from Amazon and third parties. Individuals can also make purchases on behalf of their organizations and integrate order approval workflows and reporting.

The approach

• Amazon created a holistic marketplace for B2B vendors by offering over 250 million products ranging from cleaning supplies to industrial equipment. 
• It introduced free two-day shipping on orders worth $49 or more and exclusive price discounts. It further offered purchase system integration, tax-exemption on purchases from select qualified customers, shared payment methods, order approval workflows, and enhanced order reporting.
• Amazon allowed manufacturers to connect with buyers & answer questions about products in a live expert program.
• Amazon could tap the B2B wholesale market valued between $7.2 and $8.2 trillion in the U.S. alone.
• It began earning revenue by charging sales commissions ranging from 6-15% from third-party sellers, depending on the product category and the order size.
• It could offer more personalized products for an improved customer experience. 

2. Netflix transformed the entertainment industry by offering on-demand subscription-based video services to its customers.

Like the video rental company Blockbuster, Netflix also had a pay-per-rental model, which included DVD sales and rent-by-mail services. However, Netflix anticipated a change in customer demand with rising digitalization and provided online entertainment, thereby wiping out Blockbuster – and the movie rental industry – entirely. 

• In 2007, Netflix launched a video-on-demand streaming service to supplement their DVD rental service without any additional cost to their subscriber base.
• It implemented a simple and scalable business model and infused 10% of its budget in R&D consistently.
• The company has an unparalleled recommendation engine to provide a personalized and relevant customer experience. 
• Netflix is the most popular digital video content provider, leading other streaming giants such as Amazon, Hulu, and Youtube with over 85% market share.
• Netflix added a record 36 million subscribers directly after the start of the COVID-19 pandemic.

3. Tesla uses connected car technology and over-the-air software updates to enhance customer experience, enable cost savings, and reduce carbon emissions.

No digital transformation discussion is complete without acknowledging the unconventional ideas implemented by Elon Musk. Tesla was a huge manifestation of digital transformation as the core motive was to prove that electric cars are better than their gasoline counterparts both in looks and performance. 

Over the years, Tesla has innovated continuously to improve its product, make itself more economical, and reduce its carbon footprint. 

• Tesla is the only auto manufacturer globally, providing automatic over-the-air firmware updates that allow its cars to remotely improve their safety, performance, and infotainment capabilities. For example, the OTA update could fix Tesla’soverheating issues due to power fluctuation. 
• Tesla launched an autopilot feature to control the speed and position of the car when on highways to avoid potential accidents. However, the user still has to hold the wheel; the vehicle controls everything else. This connected car technology has created an intelligent data platform and smart autonomous driving experience.
• Tesla further ventured into a data-driven future, and it uses analytics to obtain actionable insights from demand trends and common complaints. A noteworthy fact is that the company has been collecting driving data from all of its first and second-generation vehicles. So far, Tesla has collected driving data on 8 billion miles while Google’s autonomous car project, Waymo , has accumulated data on 10 million miles.
• Tesla’s over-the-air updates reduce carbon emissions by saving users’ dealer visits. Additionally, these updates save consumers time and money.
• Tesla delivered a record 936,172 vehicles in 2021, an 87 % increase over the 499,550 vehicle deliveries made in 2020.

4. Glassdoor revolutionized the recruitment industry by allowing employees to make informed decisions.

Glassdoor is responsible for increasing transparency in the workplace and helping people find the right job by allowing them to see millions of peer-to-peer reviews on employers, including overall company culture, their CEOs, benefits, salaries, and more. 

• Glassdoor gathers and analyzes employee reviews on employers to provide accurate job recommendations to candidates and vice-versa. It also allows recruitment agencies and organizations to download valuable data points for in-depth analysis & reporting. 
• It further introduced enhanced profiles as a paid program, allowing companies to customize their content on the Glassdoor profiles, including job listings, “Why is it the Best Place to Work” tabs, social media properties, and more. This gives companies a new, innovative way to attract and recruit top talent.
• Glassdoor created the largest pool of interview questions, salary insights, CEO ratings, and organizational culture via a peer-to-peer network, making it one of the most trustworthy, extensive jobs search and recruiting platforms – and one of the most well-recognized review sites
• Glassdoor leverages its collected data for labor market research in the US. Its portfolio of Fortune’s “Best Companies to Work For” companies outperformed the S&P 500 by 84.2%, while the “Best Places to Work” portfolio outperformed the overall market by 115.6%.

5. Under Armour diversified from an athletic apparel company to a new data-driven digital business stream to transform the fitness industry.

Under Armour introduced the concept of “Connected Fitness” by providing a platform to track, analyze and share personal health data directly to its customers’ phones.

• Under Armour acquired several technology-based fitness organizations such as MapMyFitness, MyFitnessPal, and European fitness app Endomondo for a combined $715 million to obtain the required technology and an extensive customer database to get its fitness app up and running. The application provides a stream of information to Under Armour, identifying fitness and health trends. For example, Under Armour (Baltimore) immediately recognized a walking trend that started in Australia, allowing them to deploy localized marketing and distribution efforts way before their competitors knew about it.
• Under Armour merged its physical and digital offerings to provide an immersive customer experience via products such as Armourbox. The company urged its customers to go online and share their training schedule, favorite shoe style, and fitness goals. It used advanced analytics to send customers new shoes or apparel on a subscription basis, offering customers a more significant value over their lifetime.
• It additionally moved to an agile development model and data center footprint with the ERP SAP HANA . 
• Under Armour additionally leveraged Dell EMC’s Data Protection and Dell Technologies to help fuel digital innovation and find peak value from its data.
• Under Armour created a digital brand with a strong consumer focus, agility, and change culture. 
• With the Connected Fitness app, it provided a customer experience tailored to each consumer.

6. Internet Brands® subsidiary Baystone Media leverages Whatfix DAP to drive product adoption of its healthcare businesses.

Baystone Media provides end-to-end marketing solutions for healthcare companies by providing a low-cost, high-value subscription offering of Internet Brands® to promote their practices digitally. Baystone Media empowers its customers by offering a codeless creation of personalized websites. However, as its userbase is less tech-savvy, customers were unable to make the most of their solution. 

The idea was to implement a solution for Baystone Media & its sister companies to enable its clients to navigate its platforms easily. In addition to PDFs and specific training videos, the search was on for a real-time interactive walkthrough solution, culminating with Whatfix .

Baystone media saw a 10% decrease in inbound calls and a 4.17% decrease in support tickets, giving them the runway to spend more time enhancing its service for the clients.

7. Sophos implemented Salesforce to streamline its business and manage customer relations more effectively.

Sophos went live with Salesforce to accelerate its sales process , enhance sales productivity , and increase the number of accounts won. However, the complex interface and regular updates of Salesforce resulted in a decreased ROI. 

• Sophos implemented Whatfix to provide interactive, on-demand training that helped users learn in the flow of work. The 24*7 availability of on-demand self-support, contextual guidance, and smart tips allowed Sophos to manage its new CRM implementation effectively. 
• It unified internal communications using Whatfix content. First, they created walkthroughs for the basic functionality of Salesforce such as lead management, opportunities, etc. Next, they moved to slightly more complex features that their users were uncomfortable with and created guided walkthroughs and smart pop-ups. Sophos also used Whatfix to align the sales and product management teams by embedding videos and other media to unify product communication instead of relying on various communication tools.
• Sophos experienced a reduction in sales operations support tickets globally by 15% (~12,000 tickets). It saved 1070 man-hours and achieved an ROI of 342%. 

8. Michelin Solutions uses IoT & AI to provide customers with a more holistic mobility experience.

The digital strategy of Michelin Solutions has essentially centered around three priorities:

• Creating a personalized relationship with customers and end-users
• Developing new business models
• Improving their existing business processes 
• AI is extensively used in R&D, enabling the digital supply chain driven through digital manufacturing and predictive maintenance. For example, connected bracelets assist machine operators with the manufacturing process. 
• It deployed sophisticated robots to take over the clerical tasks and leveraged advanced analytics to become a data-driven organization. 
• Offerings such as Effifuel & Effitires resulted in significant cost savings and improved overall vehicle efficiency. 
• Michelin Solutions carefully enforced cultural change and launched small pilots before the change implementation . 

• Effifuel led to extra savings for organizations and doubled per-vehicle profits.
• A reduction in fuel consumption by 2.5 L per 100km was observed which translates into annual savings of €3,200 for long-haul transport (at least 2.1% reduction in the total cost of ownership & 8 tonnes in CO2 emissions).
• Michelin Solutions shifted its business model from selling tires to a service guaranteeing performance, helping it achieve higher customer satisfaction, increased loyalty, and raised EBITDA margins.

Each industry & organization faces unique challenges while driving digital transformation initiatives. Each organization must find a personalized solution and the right digital transformation model when implementing new technology. Their challenges can prepare you better for the potential roadblocks, but the specific solutions will need to be personalized according to your business requirements.

Open communication with your customers and employees will help you spot potential issues early on, and you can use case studies like these as a starting point.

If you would like to learn how you can achieve these results by using a digital adoption platform , then schedule a conversation with our experts today.

Request a demo to see how Whatfix empowers organizations to improve end-user adoption and provide on-demand customer support

The Rewards and Challenges of Digital Transformation – An Amazon Case Study

• Technology Solutions
• Microsoft Cloud

I am always intrigued by companies that get it right when it comes to technology. Take Amazon, for example. Their processes are so well thought out, everything is well communicated, and service levels are high. The high degree of ease and convenience for customers to do business with them is a main driver of their success. They also provide a great deal of control to their customers in various stages of the sales process. Once items are selected, they offer a range of delivery options and visibility throughout the entire shipping process.

Amazon is a company that is in a state of continuous digital transformation. They don’t just create a highly automated process and stop there. They keep tweaking and improving it to make it faster, better, and cheaper. Although they are considering applying some cutting edge technologies such as AI and drones, most of the technology they use is widely available. Their competitive advantage comes from successfully deploying these technologies through a strong blend of people, process, and technology, all with a focus on exceeding customer expectations.

Amazon also reaps significant benefits from their digital efforts by accumulating a tremendous amount of data that they use to learn about customer and supplier trends, introduce new products, and improve overall service delivery capabilities. These data assets enable management to make better decisions that result in increased sales and reduced costs.

It is not easy for companies like Amazon to achieve and sustain this level of digital transformation. They are very process-centric, continually improving their processes and providing a significant level of training to their employees. T hey are also willing to take risks, accepting that while some of their initiatives might not succeed, there will be lessons learned that they can incorporate into other areas of the business.

As a recent example, given that upcoming automation tools such as drones and robots could significantly impact a number of existing jobs, management has started a large-scale training program to retrain these workers for future positions rather than pursuing the normal route of layoffs and re-hirings. This strategy will result in a stronger corporate culture and a positive impact on employee morale and loyalty. It will also reduce the risk associated with new hires.

As you can see from Amazon’s example, when a company embarks on a digital transformation journey, rewards heavily outweigh challenges if the effort is orchestrated in a well-thought-out and planned manner. Stay tuned for next month, when we will discuss how your company can get started on such a journey.

Sassan S. Hejazi   can be reached at Email or 215.441.4600.

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Amazon.com – Digital Transformation Strategies

All the vital news, analysis, and commentary curated by our industry experts.

Published: December 19, 2023 Report Code: GDDT0756ES-ST

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• Report Overview
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Table of Contents

Amazon digital transformation strategies overview.

Amazon is leveraging AI-based technologies as a part of its digital transformation strategies. The annual ICT spending of Amazon was estimated at $75.9 billion in 2023. A major share of this spending is earmarked for acquiring software, network and communications, and ICT services from vendors. Amazon.com Inc (Amazon) is an online retailer and web services provider. The company retails a variety of products including apparel, auto and industrial items, beauty and health products, electronics, groceries, books, games, jewelry, kids and baby products, movies, music, sports goods, toys, and tools among others through online platforms and brick-and-mortar stores.

The ‘Amazon Digital Transformation Strategies’ report will act as a reference point to understand the company/competitor’s digital strategy. It will also help in understanding the digital preparedness of the company against its peers. The information included in these reports is sourced from a mix of our very own internal database and authentic secondary research links such as the company’s annual report, presentations, press releases, etc. The report covers an overview of the company, its digital transformation strategies, technology focus areas, technology initiatives, technology introductions, partnerships, investments, acquisitions, and ICT spending among others.

Buy the Full Report to Get More Insights on the Digital Transformation Strategies of Amazon

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Digital Transformation Strategies

Amazon is one of the first retail companies in the world to use artificial intelligence (AI) and its subset – machine learning (ML) – to suggest products to customers. The Amazon recommendation engine, Amazon Go Store, and Alexa, the three most popular Amazon products are powered by AI and ML. The company follows a unique AI strategy called the flywheel approach to ensure that AI and ML-based innovations and insights are not confined to just one department but are shared among departments across the organization.

Buy the Full Report to Know More About Other Digital Transformation Strategies and Initiatives of Amazon

Amazon Technology Theme Focus

Amazon is utilizing several emerging technologies including artificial intelligence, big data, robotics, IoT, and alternative reality to enhance operational efficiency and product offerings.

Amazon Technology Focus

Buy the Full Report to Know About Other Technology Themes Under Focus for the Company

Amazon Technology Initiatives

Amazon has been involved in several strategic technology partnerships and collaborations, technology developments and roll outs over the past few years. For instance, it launched Amazon Robotics Identification (AR ID), an AI-powered scanning device that uses ML and computer vision to scan packages at Amazon’s fulfillment centers. Earlier, employees scanned all packages using a hand scanner. This meant that employees had to hold the package in one hand and the hand scanner in another. Now, employees have to just place a package in front of the device to complete the scanning process. This quickens the scanning process at the fulfillment centers.

Buy the Full Report for More Insights on Other Technology Initiatives of Amazon

Amazon ICT Spend by Function

• Communications
• Data Center
• Application
• End-user Computing
• Service Desk

Amazon ICT Spend by Function, 2023 (%)

Buy the Full Report for More Insights on Amazon’s ICT Spending by Function

Amazon ICT Spend by Channel

• Internal Development and Maintenance
• Technology Vendors (Direct)
• Local Resellers
• ICT Services Providers/Consulting Firms
• Specialist Outsourcers
• Systems Integrators

Amazon ICT Spend by Channel, 2023 (%)

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Amazon External ICT Spend by Segment

• ICT Services
• Software (Including Cloud SaaS)
• Hardware (Including Cloud IaaS)
• Network and Communications

Amazon External ICT Spend by Segment, 2023 (%)

 Buy the Full Report for More Insights on Amazon’s External ICT Spending by Segment

This report provides:

• Insight into Amazon’s technology activities.
• Insights of its digital transformation strategies and technology center & innovation program.
• Overview of technology initiatives covering product launches, partnerships, investments, and acquisitions.
• Insights on each technology initiative including technology theme, objective, and benefits.
• Details of estimated ICT budgets and major ICT contracts.

Reasons to Buy

• Gain insights into Amazon’s technology operations.
• Gain insights into its technology strategies and innovation initiatives.
• Gain insights into its technology themes under focus.
• Gain insights into its various product launches, partnerships, investments, and acquisitions.

Overview                                                                                              

– Brief information about the company, its business divisions, and its financials

Digital Transformation Strategy                                                       

– A summary of key  digital strategies/implementation efforts of the company

Accelerators, Incubators, and Other Innovation Programs      

– D iscusses the company’s key strategic units, innovation labs, incubation, and accelerator programs dedicated to technology innovation

Technology Focus                                                                               

– Lists the technology themes pertinent to the industry the company operates in and highlights the themes adopted by the company

Technology Initiatives                                                                       

– Discussion about all the technology introductions & partnerships the company has entered

Venture Arm: Alexa Fund                                                               

– Brief information about the Company’s Ventures and its key decision-makers

Investment                                                                                          

– Brief discussion about the investments made by the company to acquire new technologies

Acquisitions                                                                                        

– Brief discussion about the acquisitions by the company

Partnership and Investment Network Map                                 

– A bird’s eye view of all the partnerships/investments/acquisitions that the company has made in the last 3-5 years

ICT Budget and Contracts                                                                 

– The company’s ICT budget segregated into hardware, software, and managed IT services

Key Executives                                                                                      

– Lists key executives and Digital Transformation Executives of the company, typically the key decision makers/influencers

Frequently asked questions

The annual ICT spending of Amazon is estimated at $75.9 billion in 2023.

Network accounted for the highest ICT spending by function for Amazon in 2023.

Internal development and maintenance accounted for the highest ICT spending by channel for Amazon in 2023.

Software accounted for the highest external ICT spending by segment for Amazon in 2023.

Artificial intelligence, big data, robotics, IoT, and alternative reality are the key technological themes in focus for Amazon.

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