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The Amazon effect: Amazon`s dominance has not only challenged the traditional brick-and-mortar business model, it also transformed consumer expectations and reset industry standards. To begin with, no one wants to pay for shipping nowadays anymore, and with onset of Amazon`s one day free shipping, retailers are locked in a delivery speed arm race. Competitors like Walmart and Best Buy have followed Amazon`s lead.
Amazon is known for offering free shipping and convenience, but it also provides a vast selection of products at competitive prices. No hassle returns, an easy checkout experience and a huge repository of reviews also helps make Amazon a go-to option for a growing number of consumers. Amazon`s competitors fight back has led to its expansion from one category to the next-heating up competition in books, toys, electronics, apparel, pet products and groceries.
Low-cost leadership; Amazon is known for selling goods at a price lower than one`s imagination without compromising with the quality. You can find a product costing low as 50% when compared to a merchant`s store or any other website. Amazon`s objective is nothing but to make the products available to the customers at a price so low that the competitors cannot afford to sell without booking loss in the transaction (Gereffi,2018). This is the reason Amazon is in the position to wipe out retail and wholesalers from the market.
Customer preference; Amazon leaves no stone unturned in easing the process of online purchase. It has created its website in such a manner that even a non-tech-savvy person can use Amazon. Features like recommendations based on past purchases, search queries, most viewed items, customers review and Amazon ratings, all the tiny details in its website have succeeded in winning customers` loyalty and trust
References
Wu, X., & Gereffi, G. (2018). Amazon and Alibaba: Internet governance, business models, and internationalization strategies. In International business in the information and digital age. Emerald Publishing Limited.
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