IBM4112 Video Assignment 2 PDF

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Xin Liu...

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Video Assignment 2 1) The consumers’ trends in the retailing era have been much different than in the past. Many retailers in the past did not use much big data and did not generate much interaction with customers, except maybe two times a year during holidays and such. Another problem was that companies have too many physical stores. Customers’ trends have shifted into an era, where companies have to engage with their customers as much as possible to be successful, and making sure that it has a very large online presence, including social media, websites, and online stores. With these in mind, customers’ focus has really evolved from a old-fashioned in-person shopping to a new digital age of shopping and browsing.

2) The framework of the Kahn Retailing Success Matrix takes into account four quadrants/characteristics: brand, experimental, low price, and frictionless. There are also an additional four points on the outside of the matrix that are product benefits, customer experience, increased pleasure, and eliminating pain points. The closer that a company is to the center of the matrix, the less chance of success that they will have in the retail industry. However, if the company wants to be successful, they must reach fair value in all four quadrants. According to Barbara Kahn, she says that in order to win retail, the company must be best at 2 quadrants and be good in the other two. However, to be “good” in a quadrant is very difficult, andn is the reason why big companies like Amazon are so successful today, because they are the ones that set the bar and force everyone else to do the same.

3) A big key factor in Amazon’s success is their huge beginning in the frictionless quadrant, in that they made it very easy for online shopping, and knew exactly what the customers wanted

and gave those things to the customers. This built trust, which is referred to as a retail proposition. Another factor is Amazon’s superior competitive advantage in that Amazon buys from retailers who provide superior value compared to other brands. Amazon also were the ones who first revolutionized the 1 click checkout feature on their website and even patented it. The two quadrants that Amazon really succeeded in were low price (operational excellence, lowest costs efficiencies) and the frictionless quadrant (comprehensive, customer understanding and total convenience). For low prices, the reason Amazon was able to do this was because the money that they received in subscriptions, marketplace searches, and the constant pressure on sellers on lowering their prices, went towards making sure the website lowered as much cost as possible on its products....