Why Is Amazon So Successful?

 Hint: just two words.

Let’s be honest: Amazon is way ahead of the AI competition. Amazon’s tech intelligence is what fuels its resounding success and rakes in billions of dollars. So let’s see what AI practices we can learn from them.

AI Is Not Shackled To One Particular Office – It’s Everywhere And From Top To Bottom

Since the AI technology isn’t limited to one Amazon location, the insights are suffused across all departments. Thus, while AI algorithms are broadly leveraged by the product recommendation team to improve its product forecasts, other Amazon teams also get their share of AI power. For example, Amazon is incorporating artificial intelligence and machine learning to optimize its warehouse operations, understand customer search queries, and automate supplies. Besides, this next-gen technology underpins three Amazon proprietary products. These include Alexa, the Amazon Go Store, and the Amazon recommendation engine.

The Famous Flywheel Approach

If you think that Amazon has some kind of sacred knowledge completely to itself, you’ve probably over binged on conspiracy theories.

Here’s their ‘secret’: Amazon uses a “flywheel” approach to artificial intelligence.

Forget sales funnels. It’s the flywheel concept that rules the roost these days and not in marketing only. Just like the flywheel, once you get the ball rolling with Artificial Intelligence, it’s easier to continue its march by giving it continuous smaller boosts.

With that in mind, Amazon has built a development plan to keep its AI efforts aboard. Such a long-run strategy ensures that Artificial Intelligence is availed of at maximum peak and innovation stays at an always high level.

Also, the company keeps data flowing through all departments and processes. Thus, all databases are interconnected and can be accessed by any part of the team on demand. Therefore, this flywheel of ever-mounting data and Artificial Intelligence intertwined and shared across the company empowered the whole structure of Amazon.

Coherent Customer Experience

The Flywheel approach is what fuels Amazon's recommendation engine and bolsters supreme customer experience. Amazon is a true pioneer of out-of-the-box shopping experience and is truly hell-bent on the best customer journey. Whether it’s one-click buying or lightning-fast shipping, they’ve set the bar way too high for the online shopping experience worldwide.

And guess what is responsible for ever-high customer satisfaction? Artificial Intelligence of course. Integrated through all shopping journeys, it does everything that conventional methods cannot. In particular, the recommendation engine is what generates 35 percent of the company's revenue.

Amazon's recommendation system helps tap into the minds of all customers and collect strategic data about their preferences and purchases. The massive amount of data pulled is used to build a panoramic view of a particular client. Using that data, Amazon can make on-point recommendations and win over each of their shoppers.

Some Numbers To Top It Off

Finally, let’s back up our rhetoric with real numbers.

According to recent industry figures, Amazon is the leading e-retailer in the United States with close to 386 billion U.S. dollars in 2020 net sales. Most of the company's revenue is generated through e-retail sales of electronics and other products, followed by third-party seller revenues, subscription services, and AWS activities.

The impressive stats show the organization's solid investment over the years is now paying off in a big way.

Where To Go From Here: Machine Learning & Artificial Intelligence in eCommerce