When Amazon.com opened its online bookstore 10 years ago, it faced an uncertain future as it set out to prove that a retailer that sold exclusively via the Internet could succeed against established competitors with physical stores.
The company's first decade online wasn't always a smooth ride, and pundits predicted Amazon.com's demise more than once, particularly when the dot com frenzy turned into despair and many e-commerce companies collapsed.
But through it all, Amazon.com's management, led by its smiling founder, President, Chairman, and Chief Executive Officer Jeff Bezos, kept increasing sales and aiming for the elusive profitability, which the company eventually attained in 2003.
Today, Amazon.com stands as the ultimate e-tailer, a company that has blazed a trail in business-to-consumer e-commerce with a successful mix of innovative technology and business practices that many study and attempt to emulate.
What has been the key to its success? Industry experts point to several key factors, including an obsessive focus on customer satisfaction, constant improvements to the Web site's design, an emphasis on personalizing the shopping experience, and solid back-end technology.
As a result, Amazon.com has built a loyal following among online buyers as a solid and reputable seller. "There's a trust factor Amazon.com has with its customers. People perceive Amazon.com as an honest company," says Edgar Dworsky, founder of Consumerworld.org, a Web site devoted to consumer advocacy.
Simultaneously, Amazon.com has a reputation as the company to emulate among e-tailers. "The industry looks at Amazon.com as a benchmark" for e-tailing, says Su Li Walker, a Yankee Group analyst.
Amazon.com from the beginning has relentlessly focused on providing good customer service, which in turn has generated a high degree of trust--and a high sales volume--from its clients, experts say.
Amazon.com has earned its customers' trust by consistently providing secure transactions, having reliable fulfillment and shipping, offering broad product selection, and emphasizing price discounts, experts say.
This solid trust was critical for Amazon.com to obtain in the beginning when it was a newcomer, and it is critical to maintain now, because competition in e-commerce will heat up considerably in the coming years, says Patti Freeman Evans, a Jupiter Research analyst.
Amazon.com from the start has also worked tirelessly on its Web site's user interface, to continually make navigation more intuitive, the layout more simple, and the overall shopping experience more friendly and personalized.
"Amazon.com has always been very aggressive about analyzing its Web site's traffic to a high degree and making modifications based on what they see happening," says Rob Enderle, principal analyst at Enderle Group. "Amazon.com seems to do the best job of continually refining its site to make the customer experience better."
The company has been a pioneer in its relentless use of Web site design testing and optimization, constantly evaluating everything, including minutiae such as the color and shape of tabs on the site, says Guy Creese, managing principal at Ballardvale Research.
That is time and money well spent, because given the volume of traffic on Amazon.com's Web site, even a slight optimization of its design can mean millions of dollars in additional sales, Creese says. "That type of work and study absolutely pays off," Creese says.