Customer Segmentation And Website Evaluation Of Amazon
Company Overview
Amazon is an American electronic commerce and cloud computing company that is based out of Seattle, Washington. The company was founded by Jeff Bezos in the year 1994. The company is the largest online retailer that serves over 100 countries all across the globe. Faster deliveries through Amazon Prime, excellent customer services & support system, and a wide range of products are the prime strengths of the company.
The company belongs to the industry of online shopping and retailing and carries out its business activities through web portals as website and mobile application. The organization earned revenue of USD 177.866 Billion in 2017-2018 (Statista, 2018). The sales rank, customer base, and total number of orders determine the revenues earned by the company.
Online shopping has been trending since past few years and there is an immense shift observed from offline to online modes of shopping. The trends will continue to flourish in the years to come. Cybersecurity risks and attacks are a prime cause of concern for the industry.
The URL of the company is https://www.amazon.com/. It follows a simple and visually appealing layout with the logo of the company at top left corner of the screen with a search bar adjacent to it. The menu underneath provides the list of the departments and categories of the products to choose from. The latest deals and offers are shown in the body section followed by the contact details, disclaimer, and company information in the footer section.
Customer Segmentation
The company does not have an offline presence and serves all of its customers through its website and mobile application only. The organization follows multi-segmentation positioning approach to attract its customers by offering them with over 562 million products. These products are available for the customers of every age group, gender, community, and geographical location.
Amazon Prime is one of the strategies adopted by the organization to provide the customers with faster (same day, next day) deliveries. Also, the customers can choose the delivery slots as per their convenience. As per a recent study, it has been observed that the Prime International customers have grown at the rate of 56% at compound annual growth rate in 2016-2018. Over 70% Americans with the annual income of $150,000 or above have prime memberships. The organization shipped over 5 million orders worldwide in 2017 using prime memberships (Columbus, 2018).
The company serves in urban and rural areas in over 100 countries across the globe. The services are largely utilized by younger population in the age group of 18-45. Students, employees, and professionals make use of the website irrespective of their gender. The company has categorized the customers in three categories as hard core loyals, soft core loyals, and switchers. From the psychographic perspective, the company serves the customers irrespective of their social class/status or community (Hymas, 2011).
Industry Overview
The number of customers recorded on Amazon website is 300 Million while 30 Million users are registered on Amazon app. The company uses web analytics and advance data analytics tools to analyse the customer patterns, preferences, and behaviour and provides them with the discounts and deals accordingly. The ease of shopping without the need to physically visit the store and a wide range of products are the primary reasons for the shoppers to make purchase using the site/app. The lifestyle reasons, such as lack of time due to personal or professional commitments, health issues, etc. are some other reasons (Cuadros & Dominguez, 2014).
Web Persona 1
Nick, Marketing Analyst, 32, based out of Seattle, prefers Amazon app on his iPhone to place orders. Nick uses the application for purchasing a wide range of the products, such as groceries, books, and electronics. He has good technical knowledge and likes the adaptive positioning strategy adopted by the company.
Web Persona 2
Tine, Homemaker, 56, based out of India, access Amazon through its website on her laptop. She orders all of her groceries and lifestyle products using the site due to the discounts provided on the same. She finds it easy to search and locate the products and considers reviews & ratings, delivery charges, and delivery time as the factors before placing the order.
Competitive Analysis
Competitor 1 – Walmart
Walmart is the prime competitor of Amazon and the website can be accessed from the URL as https://www.walmart.com/. It is an American multi-national retail corporation that has a wide range of hypermarkets, grocery & departmental stores. It was found in the year 1962 by Sam Walton and has its headquarters in Bentonville, Arkansas. It is currently owned by the Walton family.
The layout of the website of Walmart is easy to access and is consistent across all of the web pages. The layout is quite similar to Amazon as the company logo is placed at the top left of the screen and a search bar adjacent to the same. However, the menu section is not present on the site. Instead, there is a toggle present to open the list of product categories and departments that may be accessed. The log in option and cart are placed at the top right. The body section of the website shows various products and deals for the customers.
Competitor 2 – EBay
EBay is another prime competitor of Amazon with its headquarters in San Jose, California. It was founded in 1995 and is an e-commerce platform to provide the customers with the ability to shop online. It was found by Pierre Omidyar and can be accessed from the URL https://www.ebay.com/.
Company Website
The layout of the website can be seen in the screenshot below. It has three menu bars included with sign in/register option at the top. The search functionality and the company logo is included in the second menu followed by the product names and categories.
Web Assessment Criteria – Defined
|
Criteria |
Weight |
Description and Justification |
|
Security |
9 |
Ability to secure customer data and information from the information security risks and attacks. It shall have security controls and measures integrated. |
|
Availability |
10 |
Availability of the site to the users irrespective of their location and time to access. It must be available 24×7. |
|
Usability |
8 |
Visual appeal of the site, layout, and ease of access for the users is necessary for any of the online platforms. |
|
Performance |
8 |
The time to access the website, response time, and throughout time shall be low. |
|
Reliability |
7 |
The web platform shall provide updated information, such as availability details of the product, product reviews & status, etc. |
Table 1: Website Criteria Ranking
Website Assessment Criteria – Applied
|
Scoring Matrix |
|
Amazon |
Walmart |
EBay |
|||
|
Criteria |
Weight |
Score |
WS |
Score |
WS |
Score |
WS |
|
Security |
9 |
10 |
90 |
8 |
72 |
6 |
54 |
|
Availability |
10 |
10 |
100 |
9 |
90 |
8 |
80 |
|
Usability |
8 |
9 |
72 |
8 |
64 |
7 |
56 |
|
Performance |
8 |
9 |
72 |
8 |
64 |
6 |
48 |
|
Reliability |
7 |
9 |
63 |
8 |
56 |
6 |
42 |
|
Weighted Scores |
397 |
346 |
280 |
Table 2: Website Evaluation Matrix
Amazon scores the highest as per the website evaluation matrix included above followed by Walmart and EBay has secured the last position out of the three. From the security aspect, Amazon has a wide range of Amazon Web Services (AWS) and tools to make sure that the security and privacy of the website and app information is always protected. There have been issues of data breach and leakage with EBay in the past and Walmart also has a few security loopholes.
The availability of all the three platforms is good; however, the downtime of Walmart and EBay is higher than Amazon. Usability of the site is excellent with Amazon as the customers can easily locate the contents and products on the screen in the case of the website as well as the app. Walmart also offers good usability; however, in the case of EBay, the defined flow may be a little confusing. The time to search a product was the least in Amazon followed by Walmart and was the highest in the case of EBay.
The performance scores have been assigned on the basis of time to search and time to access the home page of the site. The reliability of the site is also highest in Amazon as the most updated information is displayed to the user. However, there have been cases with Walmart and EBay wherein the product becomes unavailable as soon as the customer proceeds for payment. Also, with EBay it has been found that the discounted prices are not applied at the payment screen.
The scores obtained above were expected due to the increased shift of the customer base towards Amazon in the recent years. It has emerged as the online retail store worldwide due to the excellent services and a wide range of product categories that it provides to its customers.
References
Amazon. (2018). Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & more. Retrieved from https://www.amazon.com/
Columbus, L. (2018). 10 Charts That Will Change Your Perspective of Amazon Prime’s Growth. Retrieved from https://www.forbes.com/sites/louiscolumbus/2018/03/04/10-charts-that-will-change-your-perspective-of-amazon-primes-growth/#1045d4f33fee
Cuadros, A., & Dominguez, V. (2014). Customer segmentation model based on value generation for marketing strategies formulation. Estudios Gerenciales, 30(130), 25-30. doi: 10.1016/j.estger.2014.02.005
Ebay. (2018). Electronics, Cars, Fashion, Collectibles, Coupons and More | eBay. Retrieved from https://www.ebay.com/
Hymas, J. (2011). Online marketing: Segmentation and targeted customer strategies for the Web. Journal Of Financial Services Marketing, 5(4), 326-331. doi: 10.1057/palgrave.fsm.4770031
Statista. (2018). Amazon – Statistics & Facts. Retrieved from https://www.statista.com/topics/846/amazon/
Walmart. (2018). Walmart. Retrieved from https://www.walmart.com/