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We had clear aspirations from the very beginning.
To be earth’s most customercentric company where people can find and discover anything they want to buy online.
From Amazon‘s 1994 mission statement
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Customers want affordability, speed and selection.
“… [I]n our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon; I just wish the prices were a little higher,’ [or] ‘I love Amazon; I just wish you’d deliver a little more slowly.’ Impossible.” –Jeff Bezos
The most important aspects of the online shopping experience are delivered by physical-world logistics.
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Logistics drives every component of our Flywheel Growth Strategy.
See: Jim Collins: ‘Good to Great’ 5
Selection: We offer far more than books. Earth’s largest selection of everything – hundreds of millions of products available
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Speed: From 4-5 day delivery, with volatile performance… Significant changes to our customer fulfillment operations over the past 1.5 decades
–Amazon Internal Planning Document, 2001
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…to 1-2 day, with a promised delivery. Significant changes to our customer fulfillment operations
Offering fast, free shipping on millions of items Taking a variety of items and being able to predict when a customer could receive his or her order and providing that countdown on Amazon.com
Our goal: European next-day delivery promise with midnight order cut-off.
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Traffic: Make the website a European shopping window.
+60%
Jan. 2014
Aug. 2016
Traffic to our websites grows. And we make it easier accessible to more European customers by adding new languages.
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Sellers: Creating opportunities and increasing selection. Sellers across Europe to make use of our fulfilment network
23 million items were ordered worldwide from sellers on Amazon on Cyber Monday 2015
The number of European sellers selling products to customers in other EU countries increased by more than 50 percent in 2015 compared to 2014. Sellers on the Amazon Marketplace have created approximately 90,000 jobs in Germany alone.
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… and led us to expand across the world…
UK: 98
CA: 02
FR: 00
US: 95
ES: 11
DE: 98 IT: 10 CN: 04
JP: 00
MX: 15 IN: 13
BR: 14
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…and our heavy process focus enables us to reproduce earlier innovations at an accelerated rate. Germany
France
Japan
China
Canada
Italy
Spain
India
Mexico
Physical Media
'95
'98
'98
'00
'00
'04
'02
'10
'11
'13
'15
Electronics
'99
'01
'01
'05
'03
'04
'08
'10
'11
'13
'15
Toys
'99
'01
'04
'07
'04
'04
'13
'11
'11
'13
'15
Baby
'99
'07
'07
'07
'07
'06
'12
'12
'12
'13
'15
Tools & Hardware
'99
'04
'04
'12
'09
'09
'11
'13
'13
'13
'15
Home & Garden
'00
'04
'04
'07
'03
'06
'09
'10
'11
'13
'15
Apparel
'02
'08
'08
'10
'07
'10
’15
'14
'14
'14
'16
Sports & Outdoors
'03
'07
'06
'10
'05
'06
'10
'11
'13
'14
'15
Jewelry & Watches
'03
'07
'07
'07
'07
'06
'10
'10
'11
'13
'15
Health & Personal Care
'03
'08
'07
'09
'06
'06
'13
'14
'11
'13
'15
Beauty
'04
'08
'08
'09
'08
'06
'13
'15
'15
'13
'15
Shoes & Accessories
'05
'07
'07
'09
'07
'09
’15
'11
'12
'14
'16
Dry Goods
'06
'10
'10
'15
'08
'10
'13
'15
'15
Auto Parts & Accessories
'06
'09
'08
'13
'09
'09
'13
'13
'13
'15
Kindle Device & Store
'07
'10
'11
'11
'12
'12
'13
'11
'11
'13
Office Supplies
'08
'09
'09
'09
'09
'10
'13
'14
'14
'14
Amazon launched physical books in Brazil in 2014. Amazon launched the Kindle Store for Brazil in 2012, Mexico and Australia in 2013, and Netherlands in 2014.
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'15 '15
2 years
UK
3 years
US
13 years
Product Categories
In Europe, we began with one single FC in one country… The European Fulfillment Network in 1999.
Regensburg
Amazon Confidential
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… expanded to 6 Fulfillment Centers in 3 countries… The European Fulfillment Network in 2006. EDI2
GLA1
FRA1 LEJ1 LTN1
ORY1
Amazon Confidential
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... and have now reached 31 Fulfillment Centers in 7 countries. The European Fulfillment Network in 2016. EDI4
GLA1
BHX1 & BHX2 MAN1
FRA1 & FRA3
DUS2
EUK5
BER3 LEJ1
LTN2
CWL1 LCY2
EDE4
LBA1 & LBA2
CGN1
LTN1 LTN4
LIL1
CDG2 Announced FCs for 2017
MUC3
STR1
Existing FCs LYS1
MRS1
POZ1 WRO1 & WRO2 PRG1 PRG2 &
5 more buildings announced for 2017, >10 planned.
MXP5 FCO1
BCN1
MAD4
Amazon Confidential
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Operations started from an decidedly low-tech base… Our first customer fulfillment center in 1997
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…over time we have improved…
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… exploring cutting-edge fulfillment technologies along the way
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We always start with the customer and work backwards. The working backwards document.
• A maximum 6-page document that opens with a page written as an actual press release for the new product from the perspective of the customer. • Used to kick-off some of our best ideas like Amazon Prime and Amazon Web Services. • One of Amazon’s peculiar ways: start meeting with sometimes an hour or more of reading to absorb appendices and data.
• Every one of our leaders starts projects like this. Why? It focuses everyone on the customer.
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One of the best examples of working backwards: Amazon Prime Continuously raising the bar on what we offer our customers
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8 Prime has been an incredible engine to growth…
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…and we have continued to improve the core offers… Enhancing the offer of our core business and delighting customers with brand news services.
Free Same Day 1 Hour Delivery Scheduled Delivery Same Day
Paid standard or expedited Free Slow shipping.
Free Next Day w/ Prime.
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…whilst expanding the definition of what “Prime” means. Some of the initiatives we have launched to date.
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Prime Now is the latest improvement… Continuously raising the bar on the speed, cost and service we offer our customers
RE-DEFINING ULTRA FAST DELIVERY
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Prime Now is the latest improvement… Continuously raising the bar on the speed, cost and service we offer our customers
RE-DEFINING ULTRA FAST DELIVERY
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Prime Now is the latest improvement… And we are rolling it out to customers
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We have created new partnerships. Partners are committed to innovating with us
Working closely with delivery partners to enhance customer experience Support delivery partners to experiment with e-mobility Prime Now: use e-cargo bikes whenever possible
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Each new service offering forces to innovate further. Ultra-high speed, point to point delivery, was not something available at scale anywhere
Technology enables small independent delivery agents to deliver with very high reliability.
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Trust is built when you make a hard promise and keep it.
“Our customers will be absolutely loyal to us until the very moment they are offered a better experience somewhere else.” –Jeff Bezos
Sometimes innovation is a defensive measure.
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Lack of capacity has led us to invest in downstream infrastructure.
“The company tried the United Kingdom first. “We’ve created our own fast, last-mile delivery network in the U.K., where commercial carriers couldn’t support our peak volumes.” Jeff Bezos, 2013 Annual Letter to shareholders We value suppliers who invest with our growth.
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We keep pushing innovations to keep the flywheel spinning…
What’s next?
Amazon Flex
Amazon Locker
Prime Now
Prime Air Amazon Logistics Own Fulfillment and Third Party Carriers
Amazon Drones
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We continue to drive innovation and investment in Europe. Europe is an incubator for new services
Europe is an incubator Small distances to cover, high density of population and wealth
Common market, rule of law, qualified workforce Excellent infrastructure Amazon has invested more than 15 bn. Euro into the European infrastructure since 2010.
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Our customers have rewarded us. 2016 The UK’s Most Loved Retailer -
Retail Week
2016 Highest Level of Customer Satisfaction UK -
UK Institute of Customer Service
2016 Amazon Voted #1 E-Retailer in France -
YouGov Brand Index
2016 Most Admired Companies -
Fortune Magazine
2015 Customer Service Hall of Fame -
24/7 Wall Street
2015 #1 in Customer Service -
MSN Money’s Customer Service Hall of Fame
2014 Amazon: Customer Service Champions -
J.D. Power
Customers trust Amazon to offer them Affordability, Speed and Selection.
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Innovations and the new services help create long-term value.
Worldwide Net Sales
Average YoY growth of 20% for the last 3 years.
120.000 $107.006
100.000
$88.988 $74.452
$ Millions
80.000
$61.093
60.000
$48.077 $34.204
40.000 20.000 $6.921
$24.509 $19.166 $14.835 $8.490 $10.711
0 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Innovation and investments in customer experience drive growth.
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