The Early Bird Gets the (Online) Worm: Nonprofit Lessons From Amazon's Remarkable Success
Did you order anything from Amazon this past holiday season? Are you already an Amazon Prime Member, along with 25 percent of all American households? You may be one of the 3 million new Prime members Amazon added during the third week of December alone. This month’s column is devoted to Amazon’s founder Jeff Bezos’s winning playbook, and which pages nonprofits can take for their own success in 2016.
It’s almost unbelievable how much Amazon dominates online retail, and the company didn’t even exist 22 years ago! According to a recent article in The New York Times by Hiroko Tabuchi, of every additional $1 Americans spent online in 2015, Amazon captured 51 cents. A recent study from Macquarie Research shows that Amazon was responsible for a quarter of all retail growth—both offline and online.
How did it do this, and what can nonprofits learn from its success?
Amazon took on traditional retailers, like Barnes & Noble (founded in 1917) and Wal-Mart (founded in 1962), by focusing on the Internet and all that implied—online marketing, e-commerce and online relationship management. “Online” wasn’t just an add-on activity for Amazon; it was core to the company. Only now is Amazon opening up brick-and-mortar offline locations.
Wal-Mart, on the other hand, got into online commerce later than Amazon. Wal-Mart’s e-commerce team has grown from 500 employees just four years ago to more than 2,500 staff members today. But it may be too little too late for this offline leader: Wal-Mart’s market capitalization recently shrank to just under $200 billion. Compare that to Amazon’s value of $325 billion.
Who are the big offline brands in your segment of the nonprofit sector? Where are your opportunities to move online more aggressively than they do?
Another area where Amazon paved the way is online user experience. I’m always impressed by how easy the company makes it to find and purchase something I want. Now it has taken that ease-of-use to my smartphone. Whether I want to interact with Amazon using its mobile app or its mobile website, the company made sure that my experience is fast and satisfying.
Many nonprofits have recently invested in improving their desktop and mobile experiences. But there are many still that have not. Or, still others that have lots of room to improve. Online user experience should be at the top of your 2016 list for your desktop audience as well as your rapidly growing mobile audience. If you need any benchmarks, go buy something on Amazon using your smartphone.
Finally, one of the inspirations you can take from Amazon’s story is that it’s not too late. One of the founding concepts that drove Jeff Bezos to create Amazon was his “regret minimization framework,” which described his efforts to fend off any regrets for not participating sooner in the Internet revolution. This is as true today as it was back in 1994, particularly for the nonprofit sector, where online investment and innovation have lagged behind our for-profit peers.
The Internet revolution is far from over. It’s turning out to be more of an evolution, and it’s becoming a requirement of doing business in 2016, even if you are in the nonprofit business. In many ways, the Internet resets the playing field and allows new brands to win against older, more established ones. Which side of the spectrum will you fall on in 2016: Amazon or Wal-Mart?
Want more info on how Amazon is changing the game for nonprofits? Check out the 2016 NonProfit PRO Leadership Conference, where Jay Ferro, chief information officer for American Cancer Society, will discuss the organization's plan to model its online presence after Amazon and Netflix. Ferro will also discuss how nonprofits can evaluate their tech infrastructures and grow their digital presence. For details on other presenters or to register, click here.