Brand Analysis: Amazon


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Brand Analysis: Amazon

There’s a great quote about branding that captures its importance and impact. “Your brand is what other people say about you when you’re not in the room.” This definition comes from a guy who knows a thing or two about branding and business: the world’s second-richest man, Amazon Founder, Jeff Bezos.

Bezos leveraged the power of branding to build Amazon into a multi-billion dollar company. Since founding Amazon in 1994, he’s consistently invested in its brand. As a result, Amazon has grown into the world’s third-largest business ​​with over $300 billion in revenue. It’s top of mind for many consumers who are looking to make their next purchase of almost anything.

In this episode, we break down what it takes to build and maintain a brand like Amazon. 

Episode Outline

**This transcript has been edited and formatted for readability.

Chris Wilks: Hi, and welcome into Solving for B. I'm your host, Chris Wilks, and in today's episode, we're talking about Amazon. They're a brand that seems to be a part of everything we do in modern life.

To help me make sense of all the many pieces of Amazon's Brand, I'm joined by Jonathan Fisher, Chairman. Cynthia Stipeche, Director of Brand Experience, and Laura Ehrlich, making her podcast debut, our Brand Strategist.

What Is Amazon's Brand?

Chris: As we all know, Amazon started out as an online bookstore back in the '90s. Since then, it's become much, much more; they're a massive retailer, a web service provider, and an entertainment company. And that's just naming a few of the industries in which they play.

So to start, I want to ask what do we think Amazon's brand is? 

Cynthia: A couple of words that come to mind would definitely be utilitarian, efficient, and timely.

I think Amazon Prime means a lot of things to a lot of people. They are either a positive force in the world or negative, depending on where you stand either with people who are in the workforce or consumers. 

Chris: Yeah, I think you bring up an interesting topic. When we think of Amazon as the retailer, it is certainly timely, efficient, all those things that you mentioned. Now they have a studio and they have web service providers. Does that play across all business units? Or being the conglomerate that they are, are there multiple faces to this brand?

Jonathan, Laura, do you guys have a take on that?

Laura: I think one thing that's interesting about the Amazon brand is how it has evolved. As you pointed out, they started as sort of this mild-mannered online bookstore. And while they're still about convenience, as Cynthia pointed out, and efficiency, another word that comes to mind for their brand is innovative.

You wouldn't have thought about that for an online bookstore many years ago, but now they're starting to come out with smart home devices. They've got the Halo View now that's competing with Apple's Fitbit. They've got these additional digital devices. 

Chris: It's interesting you say that because one of their four guiding principles that they list for themselves is "a passion for invention".

Jonathan, I'm curious, what are your thoughts on this.

Jonathan: Well, I agree with Laura in the fact that when I think of Amazon, I think of their origination point, which is the ease of commerce. So I go back to their roots. And I think of them as being more driven by customer experience on the front-end, and not on the back end.

If you've ever tried to deal with Amazon, they are very litigious. They take a position of "it's never our fault." If their driver runs over your mailbox, and you don't have video of it, forget it if they damage your fence. You try to return certain products, it's almost impossible in some cases. So I think they're heavily focused on that front-end sales strategy and engagement of reducing any barrier.

But on the backside they're notorious. They're the mob in some cases. I mean, they laid the lever down hard on their marketplace suppliers and vendors and go after patents and competitive price depressions with book resellers. There's just a long, long laundry list of what some would consider being very egregious actions. Unfortunately, I'm not sure any large company that has built their way to the top doesn't have that legacy under them. 

So I think it depends a little bit on Cynthia's comments earlier, which is, your very impression of them is going to heavily reside on which side of the coin and what your experiences have been with them.

Cynthia: Absolutely. So when you think about it, I think back to this whole innovation thing. It's kind of the perspective innovation, whether it's to continue to grow the behemoth, or if it's innovation where we're really focused on the consumer and how it affects them.

Are you really digging deep into your target audience and your buyer and what they need, how you can best serve them? Or is it really about, we're offering another new thing and another new thing? Then how well are you doing all of these new things that you're offering?

Because of my UX background, I'm always looking at things from the term of personas; who's your consumer? Really digging in deep as to what's going to resonate with that target audience or that buyer. Learning to see things from their perspective.

This ties back to what Jonathan just said about the return policy on things. How difficult or easy is it to do? And are they really thinking about that? Because I will say, even kind of digging through the app itself, and I'm sure most of us use it on a daily basis, there's a lot of stuff in there that could probably be improved. It's kind of curious that it's got some major UX quirks in there and usability issues that you kind of stumble across.

Jonathan: I read a number of articles that talk about, they make decisions heavily based on the bottom line, right? And so maybe the bottom line isn't there to fix certain things.

Laura: Right. Yeah.

Jonathan: Right, right.

Is Amazon Too Big to Fail?

Chris: So I'm curious now, because as Cynthia alluded to, we probably use Amazon daily, right? I know my wife and I have a new package or two every day that arrives at our door.  But is Amazon's brand too big to fail?

Jonathan, you mentioned some of the headaches of maybe working with them as well as some of the things where they're crushing small businesses. But is it something where we, as consumers, have thrown our hands up and said, "Hey! These are the only ones who can provide this level of service and can provide me this instant gratification."

Have they made themselves so utilitarian and so useful that they're kind of insulated from any negativity?

I'll speak for myself and say what doesn't sit well with me is how they're crushing mom-and-pop retailers. But at the same time, if I need a slotted spoon because I'm making a gumbo later, and I need it in two hours, and I don't feel like driving to the store, I might put it in the cart and get the Prime Delivery.

So my point is, is that on some levels, have they risen above some of the rules that apply to maybe other brands?

Laura: You make a very valid point, Chris. To me, there are two issues here.

One is that it is so darn convenient. I think that most are very forgiving in light of some of the issues and challenges that Amazon faces and the way they operate as a monopoly. But I think their consumers and even some businesses are so much more forgiving because they are convenient and because they offer what you need. 

The other thing is, I think is they're exceptionally good at crisis communications. For instance, one of the latest is this big lawsuit that they've got with Macy's. They want to take their billboard in Times Square, and that's causing all kinds of trouble. But if you read all of the articles and how Amazon responds, they're really, really good at crisis communications.

I'm not saying that absolves them. It just shows that that is an aspect of their marketing. And when you've got really good crisis communication and a good spokesperson, and you have the right spin on some of these things, it doesn't seem as bad as it really is. So I read some of the ways that Bezos responds to a lot of these comments and things, and he is a terrific spokesperson when it comes to things like that.

One of the things I wanted to mention before we keep moving is, I wanted to touch on the inventive versus innovative. When you're inventive, you're staying ahead of the competition and things by creating or manufacturing new things. I don't see that part of the brand in Amazon.

They are, however, innovative in their thinking. If they see something out there in the market that is successful, that is doing really well, they jump on that bandwagon, such as the home robot. That was already out there, but they got their own out there next very quickly and at a better price.

It is the same thing with their Halo view. They weren't the first to come up with the Fitbit or to track how many steps people take every day, but they saw that it was popular, and they jumped on it. So that to me is innovative thinking, but it's not being necessarily inventive.

Chris: I'm glad you made that distinction because I kind of positioned them as the same thing. But you're very right that innovative and inventive have a nuance to them that I think is important to figure out.

Does Amazon Live Up to Its Values? 

Chris: According to Amazon's website they're guided by four principles: passion for invention, customer obsession, commitment to operational excellence, and long-term thinking. Do you think Amazon delivers on these four values?

Cynthia: I think they're very opportunistic. So they see trends, things that customers are becoming used to, or something that someone else has started, and they're like, "How do we roll this into our umbrella of offerings?" I think they do a lot of that, going back to the whole inventiveness versus innovation.

And going back to the customer obsession part, I have to ask, "How are they fulfilling that?" Is it just putting all these possible offerings and services on a silver platter or is it about really digging in deep to see how to help and improve humanity through what they're doing? I question that quite a bit.

Jonathan: Well, I think they do pretty well on all four fronts. You could argue the semantics between innovation, I think. I do think they have, on both sides of that coin, demonstrated the ability to capitalize on existing opportunities and things they've seen and also created things that haven't existed before.

Are they too big to fail? I think, no.

They have failed in certain ventures in the past and I do think they're probably going to be broken up at some point in that process. But I think as long as they stay long-term in their view and see where the markets are going they'll be fine.

I mean because they have so much global data based on web transactions and customer behavior, can they be put out of business? Sure, with the next quantum technology, if they don't buy it first or create it, or some artificial system that somebody reinvents, they could be threatened.

There are disruptive forces that pop up in the marketplaces. But will they completely go away? It's not likely they'll completely go away.

I do think that they might reinvent themselves. I mean, they've got so many businesses now and are so heavily distributed, it makes it hard to completely kill the organization and its entirety.

Will Amazon Be Broken Up?

Chris: Jonathan mentioned that they might get broken up. Is that something that you think would happen ultimately because of competition coming in and taking pieces and picking things off? Or do you think that it would be regulatory? Because that's a part of their concern as well, right? There's plenty of antitrust discussion around the Amazon brand as well as others.

Is that something that they need to consider as a brand? And this ties somewhat into the branded house versus house of brands conversation. If everything's smacked with Amazon on it, does that make them more susceptible to antitrust litigation? Or do you think that ultimately, it's something that competition will come in and naturally break them up?

Jonathan: I think they have so much power in politics. Unfortunately, regulation seems to be driven by politics these days. I think that they eventually will be broken up in some regard. And what that split looks like, I don't know. They may choose to preempt it and do it themselves and just carve something out for the sake of doing it to operate.

Cynthia: I agree with you, Jonathan.

Jonathan: Yeah. But I don't think their continued acquisition strategy will work for them in the long term.

I mean regulators already looking at Facebook, they're already looking at Google. These gigantic tech companies are controlling 90% of our lives. So I think we're going to hit a point where Amazon will have to divide and conquer.

Cynthia: I think it's also going to be dependent on future administrations, future elected people in Congress, and all that other stuff.

Jonathan: What happens with the Supreme Court, right?

Cynthia: Absolutely. So that's where it's going to happen in the end.

Laura: I think if they do preempt, as you mentioned, Chris, they'll do it in a smart way. And the thing is, and I don't know if this is good or bad, but because they are a behemoth, they can afford to take risks.

They can afford to break up and go, "Should we have sold that, or should we have not? Oh, well, we'll move forward." 

So will they eventually break up? Possibly, of course. As Jonathan said, we can't predict the future. But because they are so large, that does afford them the ability to take some risks in the marketplace with what they do with their organization.

Cynthia: Yeah. I think that's really in their roots and culturally who they are. That the whole thing about selling books was just kind of a way to get started and develop these systems and the whole complexities of supply chain and shipping and all that. So to me, I feel like it's a very flexible organization. And if they need to restructure, move around, they're okay with it.

Chris: I think it will be interesting to see, if and when that day comes.

What Is Amazon's Core Competency 

What part of their brand is so essential or core to them that they would want to stay in and maintain it? I guess the easy answer is whatever is the most lucrative, but because they do have cloud computing, they have web services, they have driverless cars, they have a studio, what, I guess, division do we think is central and necessary to their brand or for all of them?

Laura: Well, I think their core competency is their online consumer sales. I don't think that'll ever go away as long as that remains as convenient as it is. And to your earlier point, Chris, even when you go, "I don't really like their business practices, but I need that spoon tomorrow," as long as they can provide that convenience, they'll continue.

Are There Lessons From Amazon's Brand?

Chris: Is there a lesson to be learned from Amazon's style of business and branding?  I know we're talking hypothetically a little bit, but for other companies and other brands across whatever industry, is there a danger in looking too far ahead and taking your eye off of what you are?

Right now, Walmart is doing what they can to come for Amazon, and they weren't first in this, so they're having to play catch up. And some other brands are getting more competencies when it comes to e-comm. So, is there a lesson in there for other brands to take about owning your niche and doing what you do really well?

Cynthia: I think so, absolutely.

Amazon has this day one mentality and approach to everything they do. They ask their employees, "With everything you do, is it a one-way door, or is it a two-way door? Does it open up doors to other things?"

I think it's rooted in that entrepreneurial spirit, and that's baked into the brand. I think they're always going to approach business through that lens in their brand, which is that kind of entrepreneurial, innovative, inventive kind of day one approach.  It's how it guides their business's decisions but also how they present and develop everything inside the company.

Laura: I agree with you, Cynthia, and one note that Chris said is owning your niche. Even with BrandExtract clients, we do recommend that a lot. If you're really good at something, stick with what you know. This is what these guys know.

Now depending on the size of the company, depending on the financial stability of the company, they may be able to take some risks. Not the risks of the level that Amazon can take as they grow, but definitely, if you're really good at something, and that is what you do.  If it is an issue in the marketplace, definitely stick to what you know. 

But again, being the size and having the financial strength that they do, they can also branch out and test other areas where they can just to see if it fits, just to see if it works. A lot of companies don't have that kind of luxury. Amazon does.

Does Brand Equity Transfer Throughout Amazon's Business?

Chris: So speaking of Amazon and their core business, they started as a book retailer, and then became an all-encompassing retailer. But then they started to branch out into web services, into entertainment, into grocery stores, all kinds of things.

Has that maybe diluted some of that brand of what they were as an online retailer? Or another way to ask this, does Amazon's brand and all its attributes translate to those other areas? Because I kind of have a hard time reconciling how they're going to be innovative, and how they're going to be customer-obsessed, how do you apply that to a movie studio? That's not really one-to-one.

So I'm curious, as branding experts, how would we navigate that kind of transition?

Cynthia: Well, it's a little bit of a slippery slope, right? I think with any merger and acquisition you have to ask, how do you get this kind of brand story or the values and the positioning to all line up between different offerings and the companies you've acquired or merged with?

I think a good point of discussion is the relationship with Whole Foods, which I still think is a bit of a disconnect, and maybe not on paper and maybe not with kind of the way it was strategically organized on the back end, but on the front side and the customer-facing side. Going back to being obsessed with providing the best customer experience, I can tell you, that that kind of merger of that brand along with Amazon was such an odd combination of companies. I think it perplexed a lot of people who are longtime Whole Foods customers, advocates, and fans.

Even today, going into the store, and this is me speaking on my own, being a customer for Whole Foods and a customer of Amazon, seeing the signage in there - it's a weird disconnect.

I probably wouldn't have handled it that way. And I think they need to do some thinking as to how Amazon and Whole Foods really integrate with each other because even to this day, I feel like it's a little bumpy.

Laura: I think you make a very good point, Cynthia. If I were to step back and think of it from a brand strategy standpoint, what I can see them doing is another one of these me-too approaches.

They see the Instacart. They see all of these apps that have been successful at delivering groceries. They can't just somehow come out and go, "Well, tomorrow, we're going to send groceries to your front door." They've got to partner with a very, very strong brand to do that.

So strategically, I can see that's what they were thinking.

"How are we going to enter the grocery delivery market as Amazon? No, we need to enter the grocery delivery market as Whole Foods. That's a trusted brand. That's a strong brand."

So did they go about it too quickly? Did they not think it through? I totally agree. But again, I'm thinking about it strategically. I can see that's where they were headed.

Cynthia: I see that, too. But when you think about Amazon, it's this very kind of utilitarian brand, right? And then you look at Whole Foods, which is really kind of hippie-fied, crunchy granola combination of offerings. it's an odd combination of brands and companies.

Jonathan: I look at it a little differently. So let's think about it from a competitive positioning. If they're looking at Walmart's ability to deliver groceries, Amazon doesn't have the ability to deliver groceries online without a local distribution network.

You can look at Zappos, too, and say that's such an odd combination for them to acquire. But I don't see it in the terms of the brands and what they stand for. I see it in terms of their physical operational strategies.

It makes total sense. They have 450 plus national stores. These are essentially distribution centers. And now you can compete with Walmart for the groceries business.

So they wanted to produce, and they wanted the distribution points. And they weren't going to be able to deliver anything quickly locally without that. So on the surface, the brands themselves seem at odds, highly commoditized, insensitive, not empathetic, not organic, not environmentally friendly.

I do think that's one of the major headwinds that Amazon's going to face in the future, the environmental issues. I mean, not only the cloud business because of the power and consumption of cloud computing storage capacity requirements, but also just in the sheer volume of cardboard. And my God, do they put stuff in big boxes when they shouldn't be that big, right?

I mean, I don't know about you, but I feel like my recycling has quadrupled because of Amazon at my house. Not only the consumption of cardboard but also the distribution of that product. I mean it's super inefficient and selfish of us to order the hypothetical one spoon because we're too lazy to go to the store and get it, right?

And so this instant one item delivery, that is a lot of fuel. That is a lot of emissions. That is a lot of wear and tear on the roads. It is a lot of congestion. Capitalism is a double-edged sword. It's Darwinism, survival of the fittest. They're always inventing something and producing something that has to sacrifice something else in this process...

Laura: Yeah, I don't necessarily disagree, Jonathan, but I do think that they've managed to make that process a little bit more efficient by giving me choices now.

Do you want these items shipped separately, or all together? And if you don't have an immediate due date, you can package them together, which I do, which does help on that efficiency, as you were talking about. But you're right if it is a quick one-off item. But they never did that before.

Before it was just, you could click the one, you'll have this one tomorrow, you have this one in two days, you'll have this one in three. And now at least, you have that option to make a little bit more of an efficient choice yourself. You have ownership in making that more efficient choice.

Jonathan: Yeah, and like I said, I think it's just headwinds that they're facing and figuring out how it's solved.

I know they were looking into the drone delivery, right, get the cars off the road. But also, there's an economic sense to that. I'm not paying drivers, right? I'm reducing human capital. Vehicles are more expensive. Cost to fuel is more expensive.

So I still believe a lot of these are business-driven bottom line strategies for them. I mean, that seems to be where they're heavily focused. But back to their four pillars, I think you can see those pillars in everything they do if you look at it from the business perspective.

Laura: I agree with that.

Does Amazon Fit With ESG?

Chris: Jonathan, you were talking about getting rid of emissions, things like that. It makes me wonder if they may already do this. But if they haven't, are they going to eventually try to enter into the green, the EV market?

There's a famous quote that says, "The best way to predict the future is to create it." So I think Jeff Bezos lives by that, has instilled that within the company. So, if they see a need for something, why don't they just go and create that thing, whether it's a new process or a new technology or whatever it might be.

Is that part of driving the innovation, these circumstances that come up, such as environmental standards? Do we think that they take the time there or look at it as an opportunity, and then tie it into that long-term thinking? Is that part of their strategy?

Jonathan: I think they look at long-term from a competitive advantage, from customer loyalty, and from the bottom line. "Will this make us more efficient, make us more money?"

I think that, to Laura's point, very early on, they're plenty big enough to try a lot of things and fail at a number of things. But that's what any great inventor or innovator is going to go through, that agile development processes around it.

I do think they always do it from that center of customer obsession, but obsession equals profit.

They observe behavior in their warehouses to see how somebody bends down and picks something up or how much they have to turn or twist or how far the box has to travel on the conveyor belt. It is an amazing amount of efficiency and obsession in this process that is way beyond the average company that I've experienced. And I've seen and worked with 300 brands in the marketplace.

I've never seen that level of performance obsession within an organization's operations that I think you hear about or read about in regards to Amazon. For the better or the worse of their employees or whoever it might be.

Laura: One thing that I think is worth mentioning is what I see missing; who are we, what do we value as a company, as a people, who are our employees, what is our culture. I don't know if that's purposeful or not.

We know that the treatment of their employees has been a big part of the news for a very, very long time. And again, back to them being very good at crisis communications, the next thing you know, there's a commercial out there about the guy losing a member of his family, and Amazon supported him to go to nursing school and actually left Amazon to become a nurse. And it was so brilliantly done.

But back to these guiding principles, one thing we always encourage our clients is, there needs to be, as part of your value system, something that kind of ties back to your employees and who you are as a company and your culture. And I think some of that is missing from Amazon.

Jonathan: Not only that, but I mean, they've taken a lot of criticism over corporate philanthropy and community reinvestment. Bezos was the only billionaire that did not sign the billionaire pact to donate a percentage of their wealth. Even after the divorce, MacKenzie Scott, I think she's out-donated more than Jeff ever did if you add up all of his donations since the '90s. 

So I do think that there are two big pieces that everyone would most likely love to see brought into that brand and maybe with Bezos stepping out of that role of running the company, but still acting as chairman influencing future development and all that, but maybe the company will evolve over the next 10 years.

I mean, Amazon is certainly going to be dealing with climate change and ESG from a business risk liability standpoint. And even if it doesn't pay attention to the S, it's still going to be dealing with E.

It's already dealing with the supply chain issues caused by the pandemic. And I was just reading an article about how now they're looking at buying all these jumbo fleet airliners that can just travel from China and avoid the whole shipping lanes altogether. So they're looking at these components from an economic standpoint, from a customer obsession delivery standpoint, but are they looking at it from a humanity standpoint, the social standpoint, and the climate standpoint?

Cynthia: We are definitely entering this age of ESG and measurable goals;  what are you really doing, and can we track the actions, and how it measures back to your promise or anything else. And I know they're big, but at some point, it's going to affect them as well.

Laura: Absolutely.

Chris: Yeah, no one's immune to it.

What Are The Big Takeaways From Amazon?

Chris: So I want to wrap up on this. I'm going to put you guys on the spot here a little bit. But for all brands out there, what is one takeaway, positive, negative, that you would take from the Amazon brand? What's one takeaway that you guys have from Amazon?

Laura: I'll start. I'm going to go back to what I was talking about before in their core competency. As much as they have grown, as much as they have expanded, as much as they have penetrated other markets, as much as they bought up other brands, they've never lost sight of what they do best, and that's the online distribution of consumer goods.

They may have expanded what that means, but they've never lost sight of that. And going back to what I was talking about, core competency, owning your niche, doing what you do best, I say that they've had some hiccups along the way, and they've certainly grown to the extent of having expanded way beyond that. But I believe that they still have not lost sight of what they do best.

Chris: Okay. I'm going to pass it over to Cynthia.

Cynthia: Let's see. I think it's this entrepreneurial spirit and always approaching it as this kind of day one approach that they have in the company and the expectations, their employees approach, their workday. I imagine from the bottom up and everything else. But I think it's that entrepreneurial spirit, too, that we're starting with something new every day.

I think working that into your organization definitely sets the pace and the tone of who you are as a business and as a brand. So I think that constant challenge and kind of keeping themselves on their toes.

Chris: That sounds good. Jonathan, what do you have for us?

Jonathan: I agree with what's already been said. But I would add their customer obsession.

I mean, they focus on what drives customer value. When we go in and do a lot of "Voice of the Customer" interviews and competitive analysis to help companies realize where their true value lies, often, we find that they've got it into the tactical position, but are really missing the strategic positions that drive customer value for loyalty or referrals or price points. They think too small sometimes.

Half the work we do seems to be focused on helping a company truly understand its customer value drivers in this process. And I think Amazon is pretty good at figuring it out through technology, data and competitive analysis, and all of those touchpoints that you use to determine these things. 

Companies often overlook a lot of hidden customer value in their operations, in their messaging, and in the delivery of their services or products. And that's something that they come to us to help them figure out.

Chris: Yeah, so the big three takeaways are, one, don't lose sight of your core competency. Always be true to your roots, if you will.

Two, take that day one mentality, that day one approach, that entrepreneurial spirit of, "Hey, there's work to be done, and we never want to get too comfy and cozy."

And then number three, of course, customer obsession. Go to great lengths to understand your customer, what drives them, what makes them tick. And there, you can uncover the value and your path forward.

That's it for me today, guys. I really appreciate you guys taking all the time and joining us. This is super helpful, super insightful. So thank you, and we'll catch you guys next time.