Amazon Go strives to put a stake in the e-commerce market

Amazon is carving out new capabilities in the e-commerce market with its Amazon Go service -- which may have a profound impact on CRM, according to expert Jeff Kaplan.

As increasing digitization overtakes commerce (and virtually all industries), companies need to adjust with new...

technologies and new approaches.

Customers want to be able to research and make purchases on various devices and platforms (from online to in store). Companies are enlisting mobile devices, social platforms, live chat capabilities, communities, location-based technologies and e-commerce applications to create new capabilities in this digital commerce era. Creating an anytime, anywhere, omnichannel strategy has become critical for the e-commerce market.

Several vendors have jumped into or continued to claim territory in this domain, including Oracle with its Commerce Platform, SAP with its Hybris technology, Salesforce with its Commerce Cloud and, more recently, Amazon with Amazon Go, which brings customer relationship management (CRM) and e-commerce together.

Over the past 12 months, most of the industry's attention has focused on Microsoft's purchase of LinkedIn. Industry observers expect that LinkedIn's social data will redefine Microsoft Dynamics' customer data by incorporating it into the lead-generation process, as well as by using it to provide new information and a new interface for managing customer relationships.

Salesforce, which pioneered the software as a service delivery of CRM, recently purchased Demandware Inc. to bring the Commerce Cloud to market, clearly illustrating how CRM and e-commerce are coming together in an increasingly "on-demand" world.

Cloud-based CRM and the e-commerce market have been converging for some time. Combining these capabilities has enabled companies to create a more compelling omnichannel customer engagement model and a mechanism to manage customer relationships. SAP's acquisition of Ariba and Hybris, along with Oracle's purchase of NetSuite and ATG, was fueled by the rapid shift in buying behavior to online sales channels.

E-commerce and CRM join forces

Although Amazon is the leader in e-commerce, the company has never been a major player in CRM. However, company executives have harbored a different view internally, according to John Rossman, a former Amazon director responsible for the launch of the company's Merchants program, a B2B network for third-party e-commerce sellers. In Rossman's new book, The Amazon Way on IoT, he recalls an executive meeting in 2004 in which an Amazon executive indignantly proclaimed, "We are the world's largest CRM company!"

When Amazon Web Services (AWS) first launched, executives expected it to be used primarily by other retailers that were interested in using Amazon's e-commerce platform to sell their own products and services online. They didn't expect AWS to also appeal to a new generation of startups and to win over a growing portion of enterprises moving to the cloud, as well.

The hidden layer of underlying technologies that can make it happen is where [Amazon Go's] power lies.

AWS has not only become a powerful new revenue and profit engine for Amazon, but it has also given the company access to a broader set of corporate and public-sector customers. In essence, AWS has converted Amazon from a primarily B2C-oriented company to a B2B solutions provider.

Although many industry observers view AWS as an infrastructure as a service provider, it has been putting more emphasis on its platform as a service capabilities to keep pace with Microsoft's rapidly growing Azure cloud. At its recent re:Invent user conference, AWS unveiled more than 30 new software development tools, database services, artificial intelligence functionality (AI) and cloud storage capabilities aimed at strengthening its ability to help third-party developers build, deliver and manage apps more cost effectively.

Lost among these announcements has been the continued development of Amazon's core competency in e-commerce. But the recent introduction of the Amazon Go initiative demonstrates the company's ambitions to redefine the retail experience. The new service envisions a retail outlet in which consumers can electronically identify themselves, collect the products they want and depart without waiting in line or checking out. The end-to-end digital experience in a physical environment epitomizes the new omnichannel customer experience that many retailers have only dreamt about.

While demos of the Amazon Go idea are compelling, the hidden layer of underlying technologies that can make it happen is where the power lies. In addition to the electronic recognition systems intertwined within the Amazon Go environment, the key components that make it all work are the elaborate set of sensors, database applications and AI capabilities that tie the customers to the products.

Although Amazon hasn't explicitly stated that it intends to use the new digital retail service as the vehicle to offer its own CRM solution, it doesn't take a lot of imagination to envision the company finally entering the market. When it does, Amazon will once again be capitalizing on another internal competency to enhance its competitive position and expand its opportunities in the e-commerce market.

Next Steps

Expert insights into Amazon Go

Learn more about the Salesforce Commerce Cloud

How Amazon is hoping to make it easier to move to AWS

This was last published in December 2016

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