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The Reasons Why Amazon Is One Of The World's Most Innovative Companies

Amazon is considered to be one of the most innovative companies in 2017

14Aug

Amazon is considered to be one of the most innovative companies in 2017, and not without good reasons. The company has changed the way people live and shop, but when it comes to innovation, Amazon stands apart from others because of some pretty unique cultural elements that make it a perfect place for cultivating innovation.

Amazon builds on the ruins of past structures

For over 20 years, Amazon has been moving into one sector after another, gentrifying them, even if it required tearing down their existing structures. Amazon Music Unlimited, the latest version of their streaming music service was built on top of Amazon MP3 (their initial music store). The company introduced their crowdsourcing platform for aspiring scriptwriters in 2010, upon which they built their award-winning TV shows.

Embracing continuous evolution

Microsoft, Google, and Apple are focused on an ecosystem of services and apps that are quite tightly designed. Amazon, on the other hand, emphasizes platforms that serve their customers in the fastest and best possible way. Amazon CEO, Jeff Bezos, says that their customers are loyal to them until somebody else offers them a better service. Instead of trying to fight it, they turned it into a motivational force that drives the entire company and sparked a great stream of creative firsts.

The streaming video-game network Twitch (acquired by Amazon in 2014), launched its first 3 original titles, while Prime Video was made available in more than 200 countries, after the debut of Amazon’s most watched premiere ever - The Grand Tour. Amazon invested huge sums of money in startups that will build voice-control apps for Alexa, the intelligent assistant, and provide her with thousands of new skills. The continuous evolution of the company has allowed them to experiment in other, adjacent areas, and build them into franchises.

Initiatives that drive Amazon

The 3 initiatives that drive Amazon today are: an incursion into the physical world with brick-and-mortar stores; Prime, their $99 per year membership program; and their fulfillment center that has human workers and high-tech robots working together, restlessly rethinking logistics.

Amazon’s founding idea was that the marketplace will be radically reshaped by digital commerce. From a book-selling website, they have now made selling products online possible for everyone – just set up your own storefront and sell your goods. Amazon Web Services grew out of their own eCommerce infrastructure needs and is now a $13 billion business. The company's impact is staggering, which is affirmed by a study which found that their 2015 expansion caused a net loss across all businesses of almost 150,000 jobs.

Prime

About 60% of the total value of all merchandise sold on Amazon is accounted for by Prime. Almost all of their most recent innovations share a connection to Prime, which has between 40 and 50 million users in the U.S. alone. These customers annually spend $2,500 on Amazon (4 times more than non-members). Prime Now’ offers membership advanced features, so besides having tens of thousands of items available for purchase and delivery at your door, there’s a free e-book a month, one-hour restaurant delivery, and viewing of a Twitch streaming video-game (ad-free) – all included in the annual fee. Prime can also be upgraded to include grocery delivery, unlimited audiobooks, and an HBO subscription that users can watch on Amazon’s streaming media player, Amazon Fire.

The more services and products Amazon manages to cram into Prime, users are more likely to buy more stuff and renew their membership. This gives the company insights (translated into big data) about their customers’ tastes and predictions on their next purchase. Their aspiration is to simply enable users to get whatever they want in the shortest time possible.

Amazon Go

Amazon opened their first physical stores, but they didn’t want to do it until they had a differentiated idea. Now, in-store shoppers can interact with Amazon’s sophisticated digital platforms in new ways. For example, their convenience store concept, Amazon Go, was announced in December. At the entryway turnstile, shoppers swipe a code on their mobile phones and can grab whatever items they like. The items are automatically added to their digital cart and paid for through their existing accounts when they leave. Shoppers skip cash registers and lines, thanks to Amazon's logistics, voice control, machine learning, and cloud computing.

Today, Amazon has managed to remain the undisputed leader, despite all the newcomers with funding, youth, and enthusiasm. Amazon is still a startup at heart, repeatedly remaking itself and striving to remake their customers' expectations.

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