Competition, Growth and Customer Experience from the Amazon Perspective

amazon-smile-box-300Sebastian Gunningham, Senior Vice President, Seller Services, Amazon Services, joined Scot Wingo, CEO of ChannelAdvisor for a “fireside chat” at Channel Advisor’s Catalyst 2014 event. Some highlights from the conversation follow:

On Competition:
Retailers have mixed feelings about Amazon – glad for the revenues that the Amazon marketplace brings them, but not entirely comfortable with the competitive advantage and data intelligence of Amazon. Gunningham was quick to point out that the Internet, not Amazon, is responsible for the digital ability to compete. He added that Amazon marketplaces give retailers a way to “come and compete with us” and sell to our customers and prospects. Wingo pointed out the uniqueness of this model, noting that few offline businesses understand this approach nor would they welcome competitors into their place of business.

On Customer Service:
Customer experience has been, and still is, the most important reason that Amazon and any marketplace is successful, says Gunningham. How that comes about, of course, is a tale of many parts.

Fulfillment is key to how Amazon builds good relationships and experience with customers, he says, acknowledging that the very costly move to build more fulfillment centers – both domestically and globally – is essential to a good customer experience. Although his remarks were made the day before Prime membership was raised to $99, he said that he believed that “Prime was the best deal in shopping.” He also mentioned an interest in growing revenues for sellers in “recurring payments” for subscription sales.

After his public talk, Gunningham told Multichannel Merchant of the opportunities he was most excited about, “global, payments, the effect of mobile, and continued growth in our services,” topped the list.

On Payment Models:
Gunningham believes that the Amazon Payments business represents great growth potential because consumers are looking for a payment service that they can trust.  Also, the ease-of-use of Amazon Payments, especially as more orders are placed on the small mobile phone screen, is already being embraced. Amazon Payments is a way for customers to purchase goods and services from Web sites using the payment methods linked to their accounts. Users can check out using their Amazon account information without needing to re-enter credit card numbers or shipping addresses.

On Delivery:
Earlier, Wingo planted a seed with the Catalyst audience that Amazon might consider creating its own delivery service, especially after the delivery problems that tarnished customers’ experiences during the 2013 holiday experience. Gunningham told Multichannel Merchant that he believes that there will continue to be a number of delivery solutions for Amazon, depending on what works best for the customer.  He cited the fairly new AmazonFresh grocery service, and pointed out that AmazonFresh has its own delivery trucks because of the need for speed in the type of merchandise being delivered.  “I don’t see UPS delivering two fresh bananas to consumer homes anytime soon,” he said with a smile.

On the Competition:
When asked which third-party marketplaces, other than Amazon, does the best job,   Gunningham says that he watches all of his competition. Digital marketing keeps things interesting, he commented, adding, “You never know where your next competitor can come from.”

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