The Internet's The New High Street

I was filing some old paperwork earlier in the week, brewed some espresso and plugged in the shredder, and I came across my Amazon receipts from Xmas. It really got me thinking about how in the last 4 years I’ve only purchased one Xmas gift from the High Street (which was for myself, anyway..) and everything else over the internet.

The change from shopping in the High Street to shopping online was a completely comfortable but quite radical shift in my shopping behaviour. Let’s take a look at how Amazon has marketed itself and become a major player in the online shopping revolution.

“Amazon.co.uk received orders for over 950,000 items on its busiest day in the run up to Christmas last year – at a rate of 11 orders per second – exceeding all previous sales records. At its busiest, Amazon.co.uk shipped over 700,000 units in one 24 hour period, which represents 375 tonnes of goods. That means that on average, a delivery truck was leaving an Amazon.co.uk distribution centre once every seven minutes."

In a 2005 SEC filing, Amazon describes their mission statement as to “Relentlessly focus on customer experience by offering our customers low prices, convenience, and a wide selection of merchandise.”

“Their vision is to offer Earth’s biggest selection and to be Earth’s most customer-centric company. “

These core marketing messages summarise the Amazon value proposition and are effectively communicated through online and offline communications.

Achieving customer loyalty and repeat purchases has been a crucial part of Amazon’s success. Many other dot-com enterprises failed because they succeeded in achieving awareness, but failed to achieve loyalty.

Amazon successfully achieved both.

Amazon offers the lowest prices are for the most popular products, with less popular products commanding higher prices and a greater margin for Amazon. This is common practice in line with most online retailers.

The free shipping offers are quite ingenious, and are used to encourage an increase in basket size (the free shipping is only offered if the customer spends a certain amount). The level at which free-shipping is set is critical to profitability and Amazon has changed it as competition has changed and for promotional reasons.

Amazon effectively communicates their fulfilment promise in a number of ways including ‘presentation of latest inventory availability information, delivery date estimates, and options for expedited delivery, as well as delivery shipment notifications and update facilities.’

In their SEC filings, Amazon state that the aims of their communications strategy are to:

• Increase customer traffic to our websites
• Create awareness of our products and services
• Promote repeat purchases
• Develop incremental product and service revenue opportunities
• Strengthen and broaden the Amazon.com brand name.

Adrian Lambert

http://www.lambertandbloch.com

P.S. Thanks to everybody who’s emailed me about my new blog - it’s very encouraging to know that so many of you are enjoying reading it as much as I’m enjoying writing it.

Viral Marketing

I really wanted to take a look at viral marketing in the first post of my new marketing blog. It's an exciting and simple way to exponentially increase traffic to your website, and create buzz about your products and services.

OK, so anything viral doesn't sound like it's going to be particularly good for you, but in this case you'd be very wrong.

I'm going to tell you why.

Viral marketing is reliant on a high pass-along rate between people. If a large enough percentage of recipients forward your article/ad to a large number of colleagues or friends, the overall growth increases exponentially, quickly. If the pass-along rate is low, then the growth rapidly diminishes.

Here are some elements that I believe comprise a successful viral marketing strategy -

It gives rather than sells - free is better than cheap!

It's communicated easily - a link at the bottom of the message to your site. Easy.

It's capable of exponential growth - make sure your mailservers can handle potentially vast amounts of traffic.

It takes advantage of common motivations and behaviours - understand what drives people to share your message and buy your product and services.

It utilizes existing communication infrastructure - Add del.icio.us and digg buttons to the bottom of your article. Use other resources as well as your own.

Adrian Lambert

www.lambertandbloch.com

P.S. Successful viral marketing will use most, but not necessarily all, of the above elements. Learn to incorporate these into your marketing strategy - when you get it right you can potentially achieve great growth for your business.