HOW TECHNOLOGY CHANGED AMAZON

                                       
                                             

Conventional business methord:

A young entrepreneur Jeff Bezos back in 1995 started Amazon. He funded it from his parent’s pocket started as an online bookstore, which was operated from his garage. He created a website by the name of amazon.com. It wasn’t even a bookstore but was a book broker. However, he couldn’t make money out of it for the next five years. He felt that his customer base is very limited in number hence he should explore new markets.

Improvisations through technology:

In 2005 amazon launched amazon prime; a video streaming service this helped amazon expand its consumer base and started bringing in substantial profits for the company. Today amazon prime is the second largest paid membership program in the world after Netflix with over a 100 million subscribers. After witnessing the smartphone boom, Amazon was quick to react and it launched its first consumer product: Kindle in 2007. Kindle was a huge success and by 2012, it constituted around 50% of all android operated tablet sales and hence was a very profitable product of Amazon. Kindle not only brought in a culture of e-books and reading devices, it revolutionized it. In 2011, Amazon launched its own appstore and operating system for its Kindle devices – which brought in revenue for amazon – and even went on to step into the smartphone business and launched the ‘Fire Phone’ in 2014. Amazon never stopped over here, it stepped into the AI industry and launched the virtual assistant ‘Alexa’ in 2014, which was later integrated into Amazon’s smart home project and became a household name by 2017. Amazon heavily funded its research and development program and hence created drones for order delivery, which were tested in 2018.

Benefits:

From a mere $16 million revenue in 1996, the company’s revenues grew exponentially to $150m in 1997 and $600m in 1998 but that was only the beginning. Amazon prime generates a revenue of up to $18 billion from subscriptions only. Kindle made up 10% of amazon’s revenues in 2012 and it made $6 billion for the company it was one of the highest selling product of amazon and brought big money for the company. The other innovation which paid off was the AI based assistant Alexa which is expected to bring in $21 billion for Amzon by 2021 and become most profitable product of amazon. The graph below shows how these innovations have helped to bring in revenues for the company and increase profitablity as after 2005, Amzaon’s business skyrocketed.