Amazon has been successfully innovating for three decades, but what’s worked so far may not suffice for the next stage, says Julian Skelly
This week, Amazon celebrates its 30th birthday. From humble beginnings as an online bookstore, it’s evolved into a global brand, reshaping industries and redefining how we shop, work, and live.
In a world where human life expectancy is increasing, the average lifespan of companies has dramatically decreased from 67 years in 1929 to a mere 15 years today, according to Yale University.
Reaching the 30-year milestone is no small feat for Amazon.
Traditionally, disruptors challenge established norms and test strategies, products, and services against the existing market. Along with Amazon, newer players like Chinese e-commerce giants Shein and Temu share this creative spirit.
These companies challenge the status quo by continuously innovating, forcing the market to adapt to their new business methods. For instance, Shein, a leader in the fast-fashion space, is expanding into furniture, electronics, and pet care, introducing up to 10,000 new items on its website daily. With the e-commerce market becoming increasingly saturated with major players, can Amazon continue to innovate and maintain its position as a leader in the space, and what strategies will it use to sustain its success?
Back in 1994, Jeff Bezos had a vision that the internet would revolutionise how we buy and read books. With determination and a garage in Bellevue, Washington, he created an online bookstore that would surpass traditional brick-and-mortar stores by fundamentally reshaping consumer behaviour and the retail industry worldwide. Early on, Amazon declared itself “Earth’s Biggest Bookstore”, competing with established retailers like Barnes & Noble.
By focusing on customer needs, developing unique propositions, and seizing new opportunities, Bezos built a company that leads in e-commerce as the high street declines. But after three decades, the energy and fearlessness of youth are tempered by wisdom and experience. It must navigate this stage carefully to avoid the decline that many companies face.
Harvard Business Review identified unique characteristics that businesses that thrive for decades seem to share. These organisations take a long-term view, focusing less on profit and more on shaping society. They share expertise and create opportunities for innovation, prioritising getting better over getting bigger. Retaining a stable core while nurturing a disruptive edge keeps them ahead of the competition. Amazon scores well on some of these measures but not all.
The retailer’s corporate culture of relentless ambition and secrecy has propelled it to the top. Beyond its core e-commerce business, it has expanded into cloud computing and nurtured the disruptive Amazon Web Services (AWS), creating a whole new cloud-computing vertical. Now the preferred platform for businesses of all sizes, AWS powers many popular websites and services, cementing Amazon’s dominance in both digital and physical spaces.
However, what has brought it success so far might not suffice for the next stage. As the market catches up, Amazon needs to innovate faster by breaking its code of secrecy and inviting new thinking into its teams. It will ensure longevity by bringing diverse skills together to tackle the next challenge in the quest for convenience and low pricing.
As Amazon blows out its 30 candles, the question on everyone’s mind is: what’s next?
It’s clear the e-commerce giant has its sights set on even bigger things. It’s already revolutionised shopping with its Prime membership, offering lightning-fast shipping and a plethora of perks. But it’s not stopping there. Amazon is venturing into new territories like healthcare, aiming to disrupt yet another industry.
Quality, the drive for improvement and truly understanding the customer have always been a part of Amazon’s DNA. If it continues to excel in this area, improvements in customer experience, pricing, and profits will follow. By executing this well, it may find the secret to Eternal Youth, reinventing itself to serve the needs of the next generation of customers who want to shop at the Everything Store.
Julian Skelly is managing partner at Publicis Sapient