A Map of Amazon and Modern

Marketing

David J CarrFollow
Sep 11, 2018

Download a PDF of the “Map of Amazon and its impact on Modern Marketing” here to zoom in
“Amazon is like pornography…everywhere,
hard to define, but you always know it when
you see it.”
Marketing is changing. In a time of data abundance,
incredible technology, imaginative canvases, and serious cultural
and social conflicts, marketers, suppliers and agencies face
increasing complexity and competition. While the industry is ripe
with different “thought leadership” conversations about “what’s
next” offering simple magic solutions, the one consistent thing is
that sooner or later someone will mention Amazon.

Since its incorporation in 1994 and via a close escape from being
called “Cadabra”, Amazon.com Inc, the US-based retail giant, has
grown to become the world’s largest internet retailer despite an
explosion of competition. It is only the second company to exceed
a market capitalisation of $1 trillion in intra-day trading. Indeed
Amazon’s scale now seems to be its only threat.

As Amazon adds new categories and new businesses, it has rapidly

become both the enemy at the gates and the new hope for doing
business.

But what is Amazon?

At Digitas we have been having many conversations and working

sessions with clients and colleagues that touch upon Amazon and
its impact upon marketing. What is fascinating is that whether you
are an Amazon expert, a customer, a Marketplace seller or even a
media insider, everyone has a different perspective. Amazon is so
vast, with so many subsidiaries, brands, verticals and products
that you are rapidly reminded of the infamous “blind men and the
elephant” parable.

In the marketing industry there is often a tendency to project

partial knowledge as whole truth, and perhaps only God or Jeff
Bezos can truly know Amazon, but based on conversations, many
articles in the trade and mainstream press, detailed reports and
even some (public) internal Amazon material, we sort to lay down
a primer, the basic starter knowledge if you will, of how Amazon is
changing marketing.

The world needs less PowerPoint.

Instead of writing another report or slide deck we combined
research and sources into a Concept Map similar to our
previous Map of Modern Brand Building. Only a little bit bigger.
“With a concept map, a viewer can see both the forest and
individual trees. The big picture is clear because all the ideas are
presented on one surface. At the same time, it’s easy to dive in
and see details and how they relate.”

Four nodes began to appear in the map.

1. What is Amazon, its pillars and how it creates value across the
globe.
2. The increasing competitive impact for marketers in CPG, Auto,
Fashion, IoT, Electronics, Home Services and Entertainment
(both from Amazon and from 3rd Parties on Marketplace
including those causing “the China Crisis”).
3. The 5 Convenience Principles behind how Amazon is affecting
and transforming the Customer Journey in terms of customer
expectations.
4. The growing Amazon Advertising and Media services that
brands and sellers can make use of to build their brands and
reach new audiences.

This “Map of Amazon and its impact on Modern Marketing” does

not claim to be exhaustive and only covers one and half of
Amazon’s three primary pillars (Prime, Webservices,
Marketplace). It does not go deep into AWS, healthcare, AI or
Finance.

And yet it reveals two competitive forces that Amazon’s customer

obsession has unleashed to transform the marketing value
chain: Experiential Competition and Perceptual
Competition.

Despite Amazon’s disruptive ways to distribute products and change customer relationships, it’s
the “real world” activations that often make its competitors most worried

Experiential Competition is about new, practical ways of

selling. This type of competition promotes customer experiences
that replace others or reposition them within the customer
journey. It is about offering accessibility, simplicity, service
convenience, personalisation, purchase convenience, and channel
flexibility to improve sales activation, fulfilment, useage and
repeat purchase. It is not just about “time well saved” but
expectations met or exceeded.
New, newsworthy ways to access the Amazon ecosystem open unexpected ways to cross
promote products and gather data to improve the experience

As Benedict Evans observed, new customer journeys lead to new

kinds of decisions that change what gets bought and then further
change how it is sold. Experiential Competition is driving these
changes.

This can lead to Amazon famously selling more private-label

batteries than Duracell or 55% of US consumers starting online
product searches on Amazon rather than Google. And it can lead
to infamously rigid industries like Automotive being forced to
reimagine the purchase experience more around people than
dealers when Hyundai opens a virtual showroom in Amazon
Vehicles.

While there are many “magic bullet” tips and tactics out there
promising marketers short cuts to delivering great experiences,
too few channel the Amazon Experiential Competition lesson of
“sell something the customer wants to buy, at a price the
customer wants to pay, with the service the customer expects”.

In the meantime Amazon, in a repeat of its famous externalisation

strategy, is offering marketers and agencies a new toolkit and
APIs to drive these experiential customer journeys — on and off
platform. It is poacher, gamekeeper and the person selling the
bullets.

But if you solve a customer problem with technology and tactics

alone you’ll own that solution until someone improves the
technology. If you solve the problem with a brand story it is
untouchable. This is where Amazon is most dangerous. This is the
power of Prime and Perceptual Competition.
The Power of Prime: Amazon’s most important product is not a product but a membership that’s
grown from shipping and offers to events and innovations

Perceptual Competition changes customer expectations. It

means you set the bar regardless of whether your product or
service competes in the category in question. Building on great
customer experience it creates a meaningful and distinctive brand
with cultural relevance, esteem and saliency. Occasionally it can
involve the odd Super Bowl ad. The result is greater mental
availability for your brand, driven by broad reach, emotions and
associations — effectiveness not just efficiency.

Amazon’s position as a dominant Perceptual Competitor is

reflected in its $1,000,000,000,000 market value and a brand
value of $207.6 billion. It is a result of selling not just low priced
products with excellent customer service, but “the thing it has
always sold the most — to investors, customers, the media —
 excitement.” Perceptual Competition means competing on brand
experience rather than CX, and Touchpoints ROI Tracker
studies show that this is increasingly a better indicator of market
share success than spend or share of voice.

Making shopping frictionless: Innovative ways to gain attention, scare the competition and
position them as inferior and old fashioned

The key proposition that enables Amazon to bring its brand, many
products, experiments and channels together is Amazon Prime.
Bezos said “we want Prime to be such a good value, you’d be
irresponsible not to be a member”, but it is more than good
value — it is a brand experience flywheel.

Prime’s ability to funnel new ideas to loyal customers drives

growth and innovation. Amazon’s first forays into scalable grocery
delivery via AmazonFresh and AmazonPantry were only available
to Prime members as was its hyperlocal 1–2 hr delivery service
Prime Now. Prime’s flywheel unites personalised, efficient
discovery with rewards, these generate momentum with more
shoppers (and sellers) which helps reduce prices while cross
subsidising content, that then further builds traffic, which
increases discovery and improves the rewards etc…
Perceptions of trust enable Amazon to develop a growing range of own brands, with services to
help customers enjoy them and new ways to pay for them. It helps them succeed and helps
Amazon move on if they don’t.

By combining an aura of innovation and novelty with a simple

subscription Amazon can generate more customer, investor and
media excitement than a Costco membership.

Building on the trust created by the value and convenience of

Amazon’s core shopping services with compelling digital content
from Prime Video, Amazon Studios, Music Unlimited, Twitch or
Audible then provides a competitive moat for the Amazon
business, increasing ecosystem reach and audience lock in.
“Amazon Studios is making original content for Prime
Video…from a business point of view for us, we get to monetize
this content in an unusual way. Winning a Golden Globe helps us
sell more shoes and it does that in a very direct way…. We’ve
monitored that Prime Video customers renew [Prime] at higher
rates, and they convert from free trials at higher rates.”
Entertainment moves Amazon out of “just” the shopping journey, increases lock-in and offers
opportunities to improve the customer experience with data insight

The continuing quest to increase the power of Prime led to what

for many CPG and retail businesses was the tipping point of
“Amazon Anxiety”: the $13.7bn takeover of Whole Foods, the
multichannel grocery retailer with over 470 stores. Structural
change happens in a category when >20% goes online. Even
Amazon don’t believe this will happen in grocery, but instead
phsyical retail can have a structural impact on digital propositions.
The Whole Foods takeover offers Prime members better prices,
more omnichannel opportunities to buy and pick-up, a stronger
health assortment and a last mile delivery boost. It also offers non-
Prime customers a very prominent real-world demonstration of
what they are missing.

Already Amazon has cut prices on high volume stables by up to

43%, installed Amazon lockers and introduced Prime savings and
in-store benefits. However, while a new efficiency-first ideology
has increased sales it has also caused a “culture clash”,
with greater centralisation and lay-offs.

The “destroyer of physical retail” is a bigger name in bricks-and-mortar than Sears and JCPenny
with new opportunities to increase the value of Prime and reward members

Ultimately the forces of experiential and perceptual

competition that Amazon has unleashed on marketing and its
value chain have helped create an “expectation economy” that
brands and businesses must navigate to survive.

We may need a bigger (boat) map.

If you’d like to explore Amazon, the changing marketing value

chain and how customer journeys are evolving further, or join one
of our upcoming workshop sessions, or even if you’d like the wall-
sized version of the map, then contact us:
amazonmap@digitas.com

— — — —
 Sources: CB Insights, Datamonitor, Amazon Shareholder Letters,
Amazon Media Group, Bloomberg, CNN, Digiday, Feedvisor,
Mintel, The Drum, BCG, Publicis Media, Warc, Global Web Index,
New York Times, Techcrunch, Adweek…and others.
 Marketing
 Amazon
 Customer Experience
 Amazon Marketing
 Modern Marketing
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David J Carr

Strategy Director. ex-CD, Planning Director & Head of UX @ Digitas, DIG, Publicis, Chemistry
& JWT. APG Gold & Google Planning Innovator of Year.

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Responses
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Applause from David J Carr (author)

Cat's Plugins
Sep 14, 2018

Many people have been very successful in creating or finding the right product
for the market.
If before the start of things, all of them spend time researching the market, the
tastes of customers, finding the market demand and addressing that need
accordingly, marketing to the right audience. The need for success is greater
than just relying on trying to sell what you have.
2
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