According to McKinsey, in less than a decade, 30% of the world’s “gross economic output will be from companies that operate a network of interconnected businesses such as those run by Amazon…..” During Prime Day, Amazon could create new loyal shoppers who spend more than normal shoppers and the existing shoppers could be engaged more on the platform whether it was through devices or stores or Amazon entertainment. In fact, a complete tech-ecosystem ensured that traffic was boosted and existing customers spent a reasonable chunk of their time on Amazon leading to a spike in the retention and revenue.
All the tech platforms that we witness today are an integral part of an ecosystem and smart businessmen like Jeff Bezos would definitely invest in this because without a tech ecosystem profits will go away because of disruption by technology companies. So better embrace it than be swallowed by it. Amazon has learnt to foresee the future and therefore has strategically built a complete tech ecosystem so that it can end up as the master of all it surveys.
It is interesting to note that Amazon is a company that wants to sell everything to everyone, remaining in the middle of all transactions possible and create customer happiness at every step. “Our job,” says Amazon CEO, Jeff Bezos, “is to invent new options that nobody’s ever thought of before and see if customers like them.”
An IT ecosystem provides solutions that are much bigger than the technical issues within the industry platform owner can solve individually. It is nothing but “the network of organizations that drives the creation and delivery of information technology products and services.”
How Amazon has built a complete tech ecosystem is interesting as well as admirable. Creating a tech ecosystem is important in order to scale the reach and influence of any platform. It has helped Amazon to devise Amazon Echo, Alexa Fund or Alexa contests through technology, thus working on ‘monetizing opportunities’ which give developers the opportunity to capitalize on the situation. With the advent of Amazon Prime, consumers have increased their spending due to free delivery and other offers. Consumers buy Echo devices and connect them to yet more devices and these provide personalized recommendations thanks to Artificial Intelligence. This generates even more revenue and helps train the tech-ecosystem with real data.
The adoption and acceleration of the voice-assisted technology have helped Amazon gain an edge over others. Platforms and ecosystems working together can thus scale opportunities. Amazon illustrates the power of the tech ecosystem and has shown that if companies want to succeed then they cannot work in isolation any longer. There are three important factors that drive this change – firstly, the regulatory overhaul. Secondly, digitization and finally, modularization. All these have shown new ways to connect products and processes. Amazon has thus adopted a complete tech-ecosystem in order to stay ahead of competitors.
Amazon took the tech ecosystem head-on before it was overcrowded and hence succeeded unlike, say, Blackberry. Indeed it pays to stay ahead, to live in the future. However, today there are many competitors to Amazon, say for example Uber, though the niche is slightly different and it pays to have a complete tech-ecosystem to beat others at their own game. It is said that Amazon puts the success of its ecosystem ahead of its own services and that therein lay the key to the success of the Amazon tech-ecosystem. Amazon has built strong and powerful interconnected webs of complementary systems that extend across sectors and market boundaries, thus, wielding tremendous power in the marketplace.
Prime Day is something Amazon leverages to widen its ecosystem. According to McKinsey, in less than a decade, 30% of the world’s “gross economic output will be from companies that operate a network of interconnected businesses such as those run by Amazon…..” During Prime Day, Amazon could create new loyal shoppers who spend more than normal shoppers and the existing shoppers could be engaged more on the platform whether it was through devices or stores or Amazon entertainment. In fact, a complete tech-ecosystem ensured that traffic was boosted and existing customers spent a reasonable chunk of their time on Amazon leading to a spike in the retention and revenue. The basic idea is to develop a relationship with customers that will add value to the business and for this Amazon also uses their third party ecosystem partners.
Amazon is a platform that sells everything under the sun and the very reason why it built a complete tech-ecosystem is that today customer experience is more important than branding or other things and Amazon has seized the opportunity to best align its ecosystem to suits this. For example, with Kindle-Fire, Amazon has sacrificed hardware costs to sell it as a low priced tab to compete with other similar products and allowing Prime customers to access books and videos by subsidizing the role of publishers even though all of it came at a cost. Amazon is patient and does not look at making quick money, their model is based on long term investment and profit. They believe they can win over time and the model is to entice, align and subsidize partners to win in the tech-ecosystem.
Finally, to conclude when we look at the Indian scenario Amazon has in a way reinvented its ecosystem to suit the trends here and made huge investments because the online market in India has huge potential and it is an established fact that mobile wallets outnumber credit cards here, thus widening the scope for good business. The benefits of building a complete tech ecosystem by Amazon can therefore not be overestimated and every business should adopt and realign to technological integrations to reach a wider audience and make the best use of the insights which is now possible to gain more traction.
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