From its inception as an online book retailer, Amazon has grown to be one of the best-known retail brands among UK consumers.

From its inception as an online book retailer, Amazon has grown to be one of the best-known retail brands among UK consumers.

Irrespective of your views on ecommerce in general, or the UK tax affairs of the company, you cannot fault its dogged determination to be the go-to online retail destination.

It’s been so successful in this endeavour that it acts as an additional channel to market for many high street names.

In thinking about what it has achieved in those 15 years, and how it has changed the wider retail industry, many points spring to mind. It’s helpful to look at the homepage from years past. In 2001 (the earliest homepage example we could find), electronics was a new category on the website, and it still favoured its distinctive underlined blue text links. At the time its Refer-A-Friend programme was centre stage on its homepage as it aimed to build brand awareness and its customer database – the lifeblood of any online retailer.

Fast-forward to 2013 and the only mention of books on the homepage are of the e-variety; while other category calls-to-action on the homepage are for clothing, fragrance and the Amazon Local deals offer.

So what’s happened along the way?

A retailer’s best ‘frenemy’

Amazon’s marketplace proposition has seen high street retailers and brands sign-up to use Amazon as an additional channel to market – whether as a Sale channel or for full-price merchandise – and it has built a suite of services around this including warehousing and fulfilment, customer service and international ecommerce.

The marketplace idea has been seized on by Tesco and Asos; and also consider eBay’s subtle repositioning away from being an auction site for small sellers to one which openly courts the same major brands as Amazon.

Redefining delivery expectations

Remember when retailers selling online could get away with having a cut-off date for Christmas of the middle of December? Amazon is the business that has pushed this later and later every year, and in 2012 allowed orders for Express Delivery in time for Christmas up until the 23rd December.

This is just one example of the lead it has taken on fulfilment options and flexibility; and with its investment in 11 new regional distribution centres (seven already open) this flexibility is only likely to improve. Particularly as it’s been trialling a same-day service in San Francisco.

Prime position

An enhanced service proposition to consumers has come from Amazon Prime. For £49 a year, those who sign up receive free next-day delivery on millions of items, plus additional benefits such as 350,000 Kindle titles you can borrow for free.

In the UK, other retailers have adopted similar services – Ocado and Asda with their delivery passes and Asos with its Prime service offering free next-day delivery, early access to Sales and its magazine. These value-adding offers not only provide another revenue stream but should improve many of the key metrics that impact the overall lifetime value of a customer.

Adding the e to books

While the iPad is the device that kick-started the tablet revolution, the Kindle has not been far behind. Amazon claims that it does not make a profit on selling the devices, but with users quickly turning to ebooks this is still a viable business model (The Publishers Association estimated UK ebook sales rose 134% in 2012). And Nielsen estimates that worldwide, ebook sales will overtake sales of physical books in 2014. In 15 years, the book publishing and retail industry has been completely transformed by Amazon’s presence.

Ratings and reviews

Let’s not forget ratings and reviews. Amazon pioneered the idea of allowing customers to give their opinion on the products it sold – good or bad. 15 years later, and 21 of the 25 UK retail sites in Practicology’s Usability Report provide ratings and reviews. A clear example, if one was needed, where the online retailer has changed expectations forever.

The next 15 years

In case you think that Amazon has come close to fulfilling its UK ambitions, think again. Planet Retail predicts it will be the second-largest retailer globally by 2017.

While it would be folly to try and predict Amazon’s strategy, a move into multichannel retailing is highly probable, with a move to bricks-and-mortar to enable its customers to ‘choose how they shop’. With a same-day delivery proposition and the roll out of Amazon Fresh, it has incredible opportunities to scale its business and remains a serious threat to a large number of established multichannel retailers.

Martin Newman, founder and chief executive, Practicology