Amazon Case Study

Executive Summary

Amazon seeks to be the Earth’s most customer-centric company. In Singapore, there is a rise in popularity for online shopping. It would be beneficial for Amazon to ride this emerging trend and expand themselves into a new market. However, despite the growing preference for online shopping, traditional shops still prevail in Singapore. Both the physical and online stores have their own benefits that attract the various customers. As such, Amazon should combine the benefits of both stores to cater to the customers. This allows them to increase their customer base and reach their goal of being a global company. The integration of the online and physical store would create a new shopping experience for customers that would surely attract their attention.

Introduction

Amazon is an electronic commerce and cloud computing company based in the United States. It also has separate internationally-focused retail websites for various countries, of which most are based in the West. China, India and Japan are the only Asia countries with their own Amazon websites (Amazon.com, Inc., 2015). Their mission statement “Our vision is to be earth's most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online” depicts their goal to be a global company.

In order to reach its goal, it is important for Amazon to cater to its international customers accordingly when they venture into a new market. The online community in Singapore is increasing with more people engaging on social media platforms as well as doing shopping online (S. Lim, 2015). The increasing popularity of online shopping in Singapore thus make it beneficial for Amazon to promote itself in the Singapore market.

Yet traditional stores are still dominating in Singapore (J. Lim, 2015). These traditional stores would be Amazon main competitor should Amazon venture into the market. Hence, it is important that Amazon adapt accordingly to the customers. It is recommended for Amazon to combine its online store with a physical store to cater to these customers. The integration of the benefits from both an online and physical store would create a new shopping experience that would attract customers. 

Discussion of Trends

Online shopping has risen in popularity following the growing online community in Singapore. According to a survey done by Paypal, 78 percent of customers in Singapore shop online once a month (S. Lim, 2015). The increasing popularity of online shopping is largely due to the convenience and efficiency it brings about.

The absence of queue at online stores improves the efficiency of service and saves time for the “time pressed and efficient people” in Singapore (S. Lim, 2015). 72 per cent of Singaporeans are tired of queuing and 42 percent of them view queuing as a top hassle they would wish to eliminate from life (S. Lim, 2015). In addition, online shopping also saves costs for the customers as there is no goods and services charge on the online products (Tan, 2015). Zalora, an e-commerce retailer, went further in the provision of convenience and cost-saving for their customers by delivering their products to the customers with postage for them to return the products back if necessary (S. Lim, 2015). The convenience of e-commerce was acknowledged by traditional physical stores that they too have turned to the online platforms to boost their sales (Making it click, 2012).

Smartphones have also played a massive role in the rise of online shopping. They mostly aid customers in the decision making when purchasing products. 70 per cent of customers in America use smartphones to do research on the products while they are inside a shop, usually to compare prices (Making it click, 2012). Smartphones have also simplified the shopping procedure. With just a click of a button, payments can be made via smartphones. This has inspired the consumers-to-consumers marketplace application founded in Singapore, Carousell. The mobile market required consumers to use their smartphones to purchase products through the application. More than 80 per cent of Singaporeans uses this application (S. Lim, 2015).

Issue

Despite the rising popularity of online shopping, traditional stores still play an important role in the retail industry. Ms Letty Lee, CBRE's director of retail services, felt that the hype over online shopping is just creating a temporary illusion of physical stores being gradually replaced by online stores (J. Lim, 2015). She believes that traditional stores will continue to strive in the industry as online stores could never totally replace the traditional stores.

After all, there are certain benefits that traditional stores have over online stores. The physical stores are able to provide interaction to their customers. Shopping is not just about purchasing products, it is an enjoyable process, a means for socializing, and a satisfying experience for the customers. They are able to touch, feel and try the products at a physical store, something an online store could not provide (J. Lim, 2015). This gives customers the extra security as it ensures the product is what they want. By using an online store, one would not know if it is reputable or not (J. Lim, 2015). In addition, physical stores provide immediate gratification to the customers. They are able to purchase and obtain the products on the spot without waiting for the delivery found on the online stores (Making it click, 2012).

Opportunities

Nevertheless, the increasing number of people using online shopping is a positive sign for Amazon to venture into the Singapore market. After all, in 2015, Amazon surpassed Walmart as the most valuable retailer in the United States by its market value (Pettypiece, 2015). Therefore, there is a chance for Amazon to prosper out of the US too.

However, since traditional stores are still very much prefer in Singapore, it would be good for Amazon to gradually incorporate their online store into the retail market, with the help of the physical stores. They could bring the benefits from both the physical and online store into a single shopping experience for the customers. After all, people have long wanted the best of both worlds (Making it click, 2012). Amazon would be at an advantage if they could be the first to incorporate the benefits of online and physical.

Recommendation

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