IQ Interactive Special Report: Interactive Marketing Awards – Best E-Commerce Experience – Amazon.com

The people have spoken and the verdict is in: Amazon.com provides the best e-commerce experience. When it comes to the giant Seattle online books-movies-music-whatever merchant, perhaps the most important thing is not to get between the site and the stampeding hordes charging there to buy everything from books to electronic bug killer.
Just to give a general idea of Amazon’s preeminence, it was ranked as the No. 1 consumer site in May 2000 by Cambridge, Mass.-based Forrester Research for the areas of toys, books, music and movies. A comment on the Forrester site regarding Amazon’s bookselling area: “Blows the competition away.” In 1999, Amazon was estimated to have 13 million customers.
What makes the company so special? “Overall, they provide the best shopping experience online,” says Tom Rhinelander, an analyst at Forrester. “From having lots of information on goods to making it easy to order to delivering promptly, they manage to do most things better than other folks.”
Rhinelander points out that certain elements of the online shopping experience are more important to consumers than others. “It varies from item to item, of course,” says Rhinelander, “and certain elements will be more important depending on what you are buying. Generally, though, for example, usability is not that important to consumers. Customer service is usually one of the most important areas.”
Not surprisingly, Amazon ranks No. 1 in the customer service area for the categories of toys, books, music and movies in Forrester’s ratings. The rankings are based both on the opinions of Forrester employees who shop the various e-commerce sites and on feedback from 19,000 Net users.
When Amazon opened for business in 1995, founder Jeff Bezos told Time magazine in 1999 he wanted his company “to do something that simply cannot be done any other way.” His reasoning was that this would lure customers away from “the old way” of shopping via bricks and mortar. Though he only gave himself a 30-percent chance to succeed, telling potential investors, “Don’t invest unless you can afford to lose it,” Bezos has now succeeded beyond his–and probably anybody else’s–wildest dreams.
In the beginning, the site only sold books, but all that has changed. As of December 1999, the site sold 18 million products, and it is Bezos’ plan for the site to offer everything short of guns and certain small animals in just a few years.
A consistent comment about Amazon is that the company manages to do well pretty much across the board in the various elements of e-commerce. “It’s hard to pick out one particular thing that Amazon has done well, they’ve done so much right. From strategy to execution, they really don’t miss,” says Ken Cassar, analyst for New York-based Jupiter Communications. But among consumers, anecdotal evidence indicates that the fast and reliable delivery service is one area that stands out.
How does the process work? If the customer is buying in the United States, after the “Place Your Order” button is pressed, the order goes to one of seven Amazon distribution centers in the U.S. The order is then transmitted to the closest facility carrying the items, which are located by human beings adorned with multiple piercings (OK, not always) and loaded into green (yes, green!) crates holding many other orders. Next, the order is dumped into a chute, then a cardboard box; if requested, it is wrapped by hand. It’s then packed, labeled and whisked away in a truck to be delivered to the consumer.
And, as Rhinelander points out, if any step along the way miscarries, Amazon will do its best to straighten things out. “That’s an important part of customer service,” he says. For example, one customer interviewed by Forrester described Amazon’s return procedure as “the fastest.”
Another key element of Amazon’s customer service, Rhinelander says, is the customer reviews on the site. “If you want a Tonka truck, Amazon will have 50 reviews for you. Toysrus.com doesn’t have that.” It’s widely recognized that people use the Net for research, and supplying visitors with reviews makes it possible for them to both research and purchase at the same place. If a consumer knows he or she wants a product, it is possible to decide which one to buy going on the information Amazon provides.
While Amazon does a good job in a preponderance of areas, there are some customer complaints: “no real-time inventory information” is one oft-repeated comment. “They don’t tell you if they have the book on hand. They say it will ship in 24 hours,” says Rhinelander. Though the clear leader in the books, movie and music categories, the company is just a hair ahead of its closest competitors in the toy category, SmarterKids and eToys.
Overall, though, Jupiter’s Cassar says the company has done a good job diversifying. “I questioned their decision to sell items other than books, but now I am willing to concede it was a good idea,” he says. “They have quickly come to dominate many categories and have not done any damage to the brand name as they extended the market.”
Concurring with Rhinelander, Cassar says, “The content around each product category seems to be pretty good.” Cassar says that Amazon hires good managers for each category and gives them the tools to be successful.
Looking to the future, Cassar feels that Amazon’s challenge will be whether or not to build brick-and-mortar outlets. “Right now the company says they’re opposed to the idea. I question whether they should be,” Cassar says, noting that Jupiter released a report in May arguing that for every dollar spent online, eight dollars are spent offline as a result of online product research.
“So this means the great content Amazon and others have developed is likely to be used by consumers to make purchase decisions, but in many cases they may be making the purchase in brick-and-mortar stores. If Amazon had such stores, they would be able to capitalize on the research they are providing,” Cassar says. He says that opening offline stores would provide a great opportunity for Amazon. “Everyone seems to be coming around to the notion that the multichannel retailer will be the winner. Putting up physical stores would fundamentally change the economics of their business.”–Janis Mara Photo: Joseph Cultic