Saturday, March 14, 2015

How Amazon Championed the CSE Market

As if being the largest CSE on the planet isn't enough, Amazon's long tentacles reach further than just the site itself. Amazon ads are also placed prevalently on what used to be premiere shopping comparison sites, as seen below.

Sites like Pricegrabber, Nextag and others used to be the go to places for the best prices - not anymore. Amazon's marketing techniques are diverse and very much widespread, utilizing these sites that were once considered powerhouses in the market. This tactic causes reach far beyond the site itself, but instead  all other comparison shopping sites as well, to draw shoppers in from many different avenues.
The Amazon effect on once powerful competitors can be seen below.
Let's take a look at how a company with humble roots (Amazon was started by 3 guys out of a garage) grew to be the Goliath it currently is today. Amazon was founded around 20 years ago (1995) and the founders vision was for it to be "the worlds largest bookstore". It saw sales of a half million dollars in the first 6 months of operating. The following year its sales grew to $15.7 million dollars and the year after it's revenue was a whopping $147.8 million. It's exponential growth is attributed to their genius marketing techniques which include 3 things - selection, convenience, and operational efficiency. In 2005 Amazon's stock was $34.74, compare that to its current price $293.64 and you get a glimpse of how well the company has been doing. 

Through the years they have successfully diversified their core business (while sticking to their successful approach) from books to other "verticals" such as electronics, home and garden etc. This is how Amazon has managed to dominate the CSE market and differentiate themselves from the rest.

On convenience, Amazon has rolled out some great customer loyalty programs such as free shipping, one click shopping and Amazon Prime which makes shopping at the site extremely efficient and easy.

On operational efficiency, Amazon has opened warehouses spread out all around the country near well established logistics services making the process very easy and convenient. Their FBA (fulfilled by Amazon) feature allows merchants to stock their merchandise at these many warehouse locations making shipping to end users a breeze.