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© 1999, Chuck Ehrlich all rights reserved

1

Retail Success Factors

Amazon.com examples

Chuck Ehrlich

(2)

© 1999, Chuck Ehrlich all rights reserved

2

Internet Retail

New ballgame

Different rules

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© 1999, Chuck Ehrlich all rights reserved

3

Amazon.com

Combining multiple factors to

(4)

What factors or activities define Amazon’s business ?

Convenience &

Ease of use

Large Customer Database Brand Share of Mind Low Price Large Selection High Customer Service High Advertising Cross Marketing Co-Branding Less real estate Low inventory Less Employees No hassle return Superior service reps E-mail confirm Always open Always there Publisher Relations Wholesale relations Unlimited virtual shelfspace Easy Search Add useful information Customize Innovative Technology Washington State 1st mover Cost Structure Low Overhead

(5)

What factors or activities define Amazon’s business ?

Low Price Convenience

&

Ease of use

Large Customer Database Cost Structure Brand Share of Mind Large Selection High Customer Service Customize Customer Loyalty Low Overhead

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© 1999, Chuck Ehrlich all rights reserved

6

High Performance Service

Web site is fast, reliable, and easy to

use

Shipping is prompt

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© 1999, Chuck Ehrlich all rights reserved

7

Branding

Short, clever name/URL/tag line

Good: Amazon.com worlds largest

bookstore

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© 1999, Chuck Ehrlich all rights reserved

8

Networking

Referral program

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© 1999, Chuck Ehrlich all rights reserved

9

Community

Posting customer reviews with

author reviews

Customer gifts

bookmarks, note pads, cups, etc.

Promotion where customers

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© 1999, Chuck Ehrlich all rights reserved

10

Personalization

Extensive customer profiles

Recommendations

Other readers who bought this title

also bought

Other readers who bought this

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© 1999, Chuck Ehrlich all rights reserved

11

Trust

Guarantees

Return policy

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© 1999, Chuck Ehrlich all rights reserved

12

Extended Service

Extensive subject index

Search

Ability to order before publication

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© 1999, Chuck Ehrlich all rights reserved

13

Logistics

Fast, reliable, inexpensive shipping

(14)

Price differences between Amazon and Barnes&Noble

17 Mar 97 124 $ 177.87

24 Mar 97 122 $ 94.29

5 May 97 125 $ 133.86

13 May 97 Barnes & Noble enters online business

10 Jun 97 54 $ -10.32

1 Jul 97 52 $ -10.73

4 Aug 97 53 $ -11.39

Source: OECD and Kellogg, NWU

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