Dynamic Marketing Communiqué

“Work Hard. Have Fun. Make History.”: How Amazon’s fast and efficient service helped them grow [Monday Marketing Marvels]

March 9, 2020

When it comes to providing the best customer experience and convenience, Amazon has always strived to innovate to grow and develop their business.

The company is a great example of how a brand or business should address customer needs by constantly improving services and user experience.

Founded in 1994 by CEO Jeff Bezos, Amazon started out as an online bookstore that can deliver customers’ purchases at their doorstep.

From the start, Amazon’s service was a step above the competition. They provided a more convenient purchasing and delivery process for their customers.

In the next few years, the company began to expand its list of product offerings. These included video games, electronics, toys, music, clothing, movies, and much more.

Along with expanding their product offerings, they also constructed new distribution centers and heavily invested in optimizing their technology to make their business operations more efficient and effective.

The distribution centers allowed them to ship and store more products for faster delivery.

Investing in the right technological development helps maintain their smooth and easy to use online transaction process.

They also purchased various companies in order to expand their product range and develop new ways to further improve their services. These companies include Whole Foods (grocery delivery), Twitch (video game streaming), Kiva Systems (robotics and automation), and Zappos (online shoe store).

The consistent drive for innovation has helped build Amazon as one of the world’s largest online retail companies in the world. This is also fueled by their goal to provide the best service to all their customers.

Amazon’s marketing strategies are guided by four main principles:Customer obsession rather than competitor focus

  • Passion for invention
  • Commitment to operational excellence
  • Long-term thinking

These principles are key to Amazon’s continual growth over the past 20 years.

Along with providing accessible services, Amazon also supports small businesses in the United States. Over 1.9 million small businesses and entrepreneurs have benefited from Amazon’s platform that allowed them to reach more customers to sell their products to.

Amazon is also committed to promoting sustainability and community development. They have significantly made investments in efficient packaging solutions, solar panels, and wind farms in order to promote environmental awareness.

For their community-building efforts, they have launched programs such as Disaster Relief and Amazon Future Engineer to support different communities that have been underprivileged and underrepresented.

All these efforts have led to positive results for the company. Their net revenue has increased every year since 2004, reaching USD 280.52 billion in 2019.

  • 2018 – USD 232.89 billion
  • 2017 – USD 177.87 billion
  • 2016 – USD 135.99 billion
  • 2015 – USD 107.01 billion

Amazon’s Earning Power: Valens Research vs. As-reported numbers

Amazon makes for a great case study that we come back to regularly. One great reason?

The company has proven itself to be a phenomenal earning power generator.

So, how well has Amazon been growing its business in the past years?

The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results much higher than what traditional databases show.

DMC%2317-1.png

The blue bars in the chart above represent Amazon’s earning power (Uniform Return On Assets). These numbers have been positive, going over 40% nine times for the past 15 years.

The global ROA average is just 6%.

The orange bars are the company’s as-reported financial information. If you relied on these numbers, you’d just see the 4.6% orange bar for the 2019 as-reported ROA (return on assets, a measure of earning power), instead of the 15.5% adjusted ROA.

That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.

The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Their returns have been well above the market.

DMC%2317-2.png

The numbers show that they are doing well and making a profit.

With optimizing and streamlining their online retail platform, creating more jobs for people, and supporting small independent businesses in the United States, Amazon made their services more useful, effective, and meaningful for their customers.

Their commitment to innovation is the key to their constant improvement, as they were able to develop their e-commerce website, while introducing new platforms that people can use outside of their standard services.

With online retail growing fast and becoming increasingly competitive, Amazon’s forward-thinking and customer-centric approach enables it to thrive and remain one of the biggest companies in the industry.

About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”

Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.

…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.

The true ROI in marketing can’t be separated from the business as a whole.

What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?

At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.

Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.

However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).

By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.

We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.

Hope you found this week’s marketing marvel interesting and helpful.

Stay tuned for next week’s Monday Marketing Marvels!

Cheers,

Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com