AMAZON WAS ALWAYS A GENERATIONAL GAME

I'm have not read anywhere if Jeff Bezos planned it like this on day 1, but if he did then in my opinion he is the greatest business visionary. Ever.

Amazon in a way started the customer acquisition game, acquisition at any cost. What that basically translates into is that customer gain is higher/primary priority over business profits. And Amazon did that for decades, running a business at a loss while at the same time expanding their customer base exponentially.

Lower price was the name of the game. A strategy that has been followed by practically every e-commerce startup since then. To disastrous results for most. But we know it eventually worked for Amazon.

The question I asked myself was why?

Why was it important for Amazon to gain customers over profits for such a long time?

Then I remembered the oldest marketing lesson I had heard long time back.

I use Colgate because because my parents used to use it. My default choice because there was no cognitive dissonance for me to change it. I naturally evolved from being a Colgate user to a Colgate buyer as a way of life.

Habit continuation or perpetuation from learnt social cues.

The large set of customers that Amazon has today, those customers were kids when Amazon started over two decades ago. And what were they learning by watching their parents?

They were learning that shopping is done online. And that online shopping is done on Amazon.

They were not learning that the reasons their parents are buying online is because of price discount. That's not the conversation that parents have with kids. Kids were hearing lets order this on Amazon.

The only thing the kids were seeing and learning that shopping is done online.

If you will look closely, many of your beliefs, attitudes and behaviours are a mirror image of your parents. Shopping on Amazon/online is one of them.

In those two decades since Amazon started, the generation has changed. The new generation has a new default behaviour.

Behaviour that influences only where to buy. The why of the parents has been forgotten. It is way of life that they have learnt and not the reason.

And as have seen with time Amazon today has less and less need to give discounts. They can sell much at regular price. Yes, they still give discounts but that is no different from a regular business practice, it is no longer central to their business identity.

“A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it.” Max Planck

What Max Planck said for science is also true for beliefs & habits.

Amazon profitability was always in the next generation. Generation which is now.

There are many industries that win because of this. One example that comes immediately to mind is Airlines. Once parents transition from road or rail to air travel, road or rail stops being even a consideration for the next generation. The new habit becomes a default mode.

Other categories that can gain from this generational game but are not playing it well are... Uber / Air BnB / Newspapers / Magazines...

They are still behaving like alternatives not being default options.

Some ideas need to be played over many many years, sometimes generations before they become acceptable and in turn sustainable profitable businesses.

So if Jeff Bezos played that game, then if business is a game of chess he is player who can see how it will end after the first move. Exceptional.

About Think Simplr

We are a boutique branding strategy+design team that makes brand-customer interactions differentiated and meaningful. We partner with clients to create sustainable and profitable businesses.

contact us: [email protected] / [email protected]