Introduction
In this era of computers and internet electronic commerce has made its own mark. It is one of the most important aspects of internet to emerge. The convenience and ease of online shopping made people around the globe to swap the crowded stores shopping to single click purchase. E commerce is a term for any Kind of business or commercial transaction which involves the transfer of information across the internet. E commerce includes customer based retail sites, auctions, industrial exchange of goods and services between corporations. It gives the customers the advantage of distance and time. The growth of e commerce was very rapid over the past five years and is expected to continue at this rate or even more. In the near future the distance between conventional and internet marketing will reduce as more and more businesses move their sections of operations to internet. E commerce after its successful implementation finds to be faster, cheaper and more convenient than the traditional methods.
Amazon.com is one of the pioneers of e commerce. It was launched by Jeff Bezos in 1994.The major plan for amazon.com at first is to give customers access to an extensive selection of books. This has done for removing the hassle of time and expenses in making a physical store and warehouse.
The history and present day of amazon.com
Amazon.com was not a great success when it is first introduced. It was just another business trying to do online market and identified the opportunity to sell books online. But later it began proving to be an online sensation as predicted. Amazon was not treated as other sites trialing for online services. What made it different from others are its business model and the ways in which it completely changed rules of finance upside down.Amazon.com seeks to be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Site has numerous personalization features and services including one-click buying, extensive customer and editorial product reviews, gift registries, gift certificates, wish lists, restaurant and movie listings, travel, and photo processing.
What is innovation?
"Innovation . . . is generally understood as the successful introduction of a new thing or method . . . Innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services".
Innovation is a break through approach or idea that can be completely new or an enhancement to something that already exists. Innovation is something new that adds value.For an innovation to occur something more than the creative idea or insight might be needed. The insight might be put in to action with a view to make genuine difference. Organizational innovations are mainly driven by the following forces like improved quality, creation of new markets, extension of the product range, reduced labor cost, improve production process etc.
Nature and process of innovation in amazon.com
After its introduction in 1994 it was not till 2004 that Amazon reported a profitable year. In order to achieve this success Bezos experimented and manipulated various conventional business models. After considering the software available Bezos and his colleagues realized that they have to devise and customize their own programs. Instead of making it a mere retail service they aimed at introducing a sophisticated technology that has enabled e commerce and online shopping phenomenon. Selling books online was their first product as the customers can virtually find limitless choice of books online for their personal purchase. Books need a little product trial as everyone knows what a book is and there is no need at all for a product explanation. It would be same like purchasing from a shop outside. This was one of the fundamental reasons for the choice of online book store.
What do innovators do is they dream about what they want. Apparently there is a passionate desire which will ultimately result in reality. He must have a clear vision about what he is going to do. Bezon knew well that amazon.com's future was not limited to the books only. He was in search of his new horizons. One of Bezos colleague was an avid kayaker and Bezos once said
In the future, when you come to Amazon.com, I don't want you just to be able to search for kayak and find all the books on kayaking. You should also be able to read articles on kayaking and buy subscriptions to kayaking magazines. You should be able to buy a kayaking trip to anywhere in the world you want to go kayaking, and you should be able to have a kayak delivered to your house. You should be able to discuss kayaking with other kayakers. There should be everything to do with kayaking, and the same is true for anything..( http://www.holtuncensored.com/members/column157.html)
That was his vision, vivid and has a wide scope.
The sale of Amazon is growing gradually. The secret behind their success is customer retention-being loyal to the customers. This makes them take the advantage of repeated customers.Amazon.com also introduced collaborative filtering which means to suggest products that each individual buyer might like by comparing the preferences of other users. Moreover they are continuously working for further price reductions as well as free all year round shipping. Therefore, nearly 70% of Amazon's sales are from repeat customers.( http://www.amazon.co.uk/gp/press/pr/20010330). The type of innovation that company made here is innovation in its Products and services. They have also concentrated on the business model approach.
Business strategies
In recent years online shopping has become increasingly popular and many organizations are closely watching this growth. But how does Amazon stand ahead of others is due to its get big fast strategy. The three strategies that helped Amazon to gain competitive success over others are cost leadership, customer differentiation and focus strategies. The first strategy, cost leadership persuaded the companies for a less price. Through their second strategy customer differentiation they provide customers differentiation through product design, quality or convenience.
Implementation mechanisms (secret of success)
Some secrets to Amazon's success,based on interviews and writings of early employees. Some of the choice bits are below.
http://37signals.com/svn/posts/600-secrets-to-amazons-success
Benefits of innovation
http://foodandretail.blogspot.com/2007/11/amazon-jeff-bezos-on-strategy.html
There are basically two types of innovation in amazon. They are 1) Radical and 2) Incremental.
The key benefits of innovation are:-
Apart from these benefits most people think that amazon.com is an e-tailer and values it for the online services they are providing. Amazon was the first virtual book store to emerge and set standards for online retailing.Amazon.com is also thought as a technology company. It may be the only company to have mastered the use of technology to serve individual customers. It tracked what its customers purchased and was able to use that information to meet and satisfy customer's expectations. As amazon investigated the security software it was first among the sites to accept credit card purchase over the internet. It was the first online company to introduce proactive order confirmation.Amazon.com stands not only as a supreme leader of online shopping but also a pioneer of web.
Suggestions on managing the innovation in future
To conclude Amazon.com has vividly and admirably demonstrated that how quickly a business can develop and grow in the internet environment. Amazon's success, initial difficulties faced in the emerging period and achievements has a clear influence virtually on every sector of business. Meantime through its unique strategies and own experimentations Amazon.com stands as a model for future online retailers to follow.
