This year we’re dreaming of a Bezos Christmas as Amazon defies a recession
Amazon has managed to defy the sluggish growth of a recession with its vast offering of products, writes Julian Skelly
There is a saying that by looking at the success of others, you can find inspiration for yourself. In a year which has seen increasingly turbulent economic times, it’s encouraging to witness the success of some companies and to try to learn from it.
Just over a week ago, Amazon defied the trend of diluted results seen in retail this year, showing a substantial increase in revenue at $143.bn – an impressive 13 per cent increase on the same quarter year-on-year. It’s certainly been a good few months for the tech giant; coming off the back of a successful Prime Day event on the 10th and 11th of October, Amazon saw strong performance across its cloud, eCommerce, and advertising services.
Now, it’s worth mentioning the obvious: not every company has the vast resources that Amazon has. A proportion of Amazon’s success comes from the company’s approach to cost-cutting: from mass layoffs and subletting excess warehouse space to giving third-party retailers access to its logistics network.
In this economy, flexible and personalised experiences are key to keeping customers happy. And loyal. Amazon has invested in adapting to the ongoing cost of living crisis, which has helped their customers feel confident in purchasing services, which in turn helps providers navigate these murky waters. While this is a time for cautious investments, that should not stop companies from looking to the future. Amazon’s investment in AI has contributed to an increase in customer satisfaction and revolutionised its eCommerce offerings.
Every company should be putting company satisfaction at the core of their offerings. Investing in personalisation through generative AI is the way to do this.
Providing the tools are trained to be ‘on brand’, customer experiences can be more tailored and impactful. Amazon understands this and has been investing $4bn in software developers like Anthropic over the last year to increase and diversify its offerings.
Obviously, there are legitimate worries around this new technology. However, as long as companies are open and honest about use cases, embracing AI could transform customer satisfaction through more personalised experiences.
No doubt, a key area for Amazon’s Q3 success is the company’s Web Services. The database storage and content delivery services have placed it in a more competitive position alongside Microsoft and Alphabet’s respective cloud units, which previously outperformed it.
The strategy of diversification has provided Amazon with a range of products to fall back on. From analytics to security and enterprise applications, Amazon has built a service that offers a variety of tools for organisations of all sizes. Its partnerships with established brands like HSBC for financial services, or software developers like Epic Games have also positioned it as a tool to trust. And, although there is an association with big brands, companies aren’t being priced out, as Amazon provides pay-as-you-go and price range options to accommodate businesses of all sizes.
The takeaway for retailers is that they need to look for opportunities to scale and build diversity into their portfolios. This range can provide a defence against challenges in different categories and sectors.
Despite impressive numbers, Amazon is not immune to inflationary pressures in the wider economy. But the company is undeniably well-positioned to weather these uncertain times.