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Group C Howard Chow Brian Devlin Benjy Finkel Brett Paterno Henry “Hank” Frank

Group C Howard Chow Brian Devlin Benjy Finkel Brett Paterno Henry “Hank” Frank. Introduction. History Retail Strategy Retail Mix Problems. History. Started in 1995 as an online book store Strategically placed in Seattle (Silicon Valley) IPO May 15,1997 First online “book store”

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Group C Howard Chow Brian Devlin Benjy Finkel Brett Paterno Henry “Hank” Frank

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  1. Group C Howard Chow Brian Devlin BenjyFinkel Brett Paterno Henry “Hank” Frank

  2. Introduction • History • Retail Strategy • Retail Mix • Problems

  3. History • Started in 1995 as an online book store • Strategically placed in Seattle (Silicon Valley) • IPO May 15,1997 • First online “book store” • Eventually started selling DVDs, music CD's, computer software, hardware, video games, electronics, toys, furniture, apparel and much more • Acquired Zappos in 2009

  4. Competitive Analysis • At first competitors were just Barnes and Noble and Borders • Nook Vs. Kindle • Now threats include places like Wal-Mart, and eBay • Market Price vs. Auction Price • In store convenience vs. at home convenience

  5. Store Design • Easy-to-use website • Headquarters in Seattle and Luxembourg City • Warehouses located near major airports • Software Development Centers

  6. Product Offerings • “World’s Largest Bookstore” • Private Labels: • Pinzon • Amazon Basics • Amazon MP3 • Amazon Fresh • Amazon Unbox • Amazon Web Store • Amazon App Store

  7. Target Market • Demographically • Male or Female • Ages of 18-50 • Any race • Income from lower middle class to upper class • Must have a computer or smart phone to access internet • Customers who know what they want and how much they want to spend

  8. Retail Format • Pure Play E-Tailer • Convenient online shopping; Open 24/7 • One of the world’s largest • Pricing depends on product and brand • Ranges from moderately priced to expensive high end products • Extremely wide range of products • Internet website with visual merchandising • Customer friendly and easy to navigate • Strategy: Serve customers conveniently with the best quality products at an affordable cost and the quickest way possible

  9. Competitive Advantage • Amazon Prime • Dynamic Pricing • Personalized Service • Huge product assortment • Innovation (one-click-ordering) • Successful online retail leader since 1994

  10. Merchant quality control • Independent 3rd party merchants selling products • Discrepancies in price, quality, shipping • Can reflect poorly on Amazon’s reputation

  11. Merchant Quality Control • Example: • A customer wants a tricycle, but wants it in a specific color • Base product sold for $83.99 with standard shipping • Color not offered by Amazon, so customer must buy from Amazon Merchant

  12. Merchant Quality Control • Example Continued • Given the following options: • Consequences • Higher prices • Confusing shipping options • Varying shipping times • Indefinite product quality • Less appealing customer experience

  13. Solutions to the Problem • Price match guarantee • Shipping guarantee • Satisfaction guarantee • Amazon Quality Supervisors

  14. Amazon & publishers

  15. Amazon & publishers • $10 price point • Publishers fighting back • Backed by Apple • Agency Model • Over wholesale model

  16. Recommendations • End the conflict • Market penetration strategy is dangerous • Selling below cost not very smart (eBooks, Kindle Fire, etc.) • Public image • Lawyer/Court Costs • Price Point • $25 • Price sensitivity analysis • Kindle Sales doing great • Book industry vs Music industry • Pursue authors • Give publishers share of Kindle sales → ← • $10 • $17.81

  17. Misc. recommendations • Physical Stores with full multi-channel integration • Too many markets/products • Expand on existing projects before taking on new ones

  18. questions

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