The document presents an in-depth analysis of Amazon's customer-centric culture, innovation strategies, and ecosystem during a webinar on December 7, 2017. It covers Amazon’s significant scale, robust revenue growth, and strong emphasis on customer obsession as key drivers of innovation, alongside its future outlook and how agencies can collaborate with Amazon. Key insights include the importance of third-party sellers, Amazon Prime's growth potential, and the strategies to succeed within Amazon's marketplace.

1. Powered by
CUSTOMER CENTRICTY:
A CLOSER LOOK AT AMAZON

2. Hello!
Lara O’Shea
Global Consulting
Partner, Digital Strategy
OgilvyRED
Thomas Crampton
Global Consulting Principal,
Marketing Transformation
OgilvyRED

3. What’s the weather like in your city?
Tell us where you’re dialing in from!

4. Want this deck?
It will be available for download shortly after
the webinar on: slideshare.net/socialogilvy
Ogilvy staff: It’s also on The Market!
themarket.ogilvy.com
Are you on the go? You can join our webinars on mobile, too!
Download the GoToWebinar app from the App Store or Google Play

5. STRATEGY INNOVATION GROWTH
Customer Centricity—A Closer Look at Amazon
December 7 2017
5

6. What We Will Cover
• Amazon’s scale
• Customer-centric Culture of Innovation—Enabling Innovation for everyone
• The Amazon Ecosystem
• Growth Pillars
• How clients & agencies are working with Amazon
• How should we work with Amazon?
• Future outlook
Thanks to the following people for their input:
Naji El-Arifi, Salmon
Eric Heller, Marketplace Ignition
Mudit Jaju, Wavemaker
Malcolm Pinkerton, Kantar Retail
Andy Reinhard, Amazon
Paul Sweeney, Bloomberg Intelligence
Igor Tolkachev, The Store WPP
6

7. De-brief from Amazon’s
WPP Executive Immersion
Summit, October 2017
7
Amazon’s Scale

8. Amazon’s Stock Performance: 12X Returns in 10 Years
8
Source: Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017

9. Amazon’s Revenue Growth Massively out-paces Retail—& Tech
9
Source: Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017

10. Amazon’s R&D Spending: Highest Globally
10
Source: Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017

11. Amazon’s Prolific Innovation Over 23 Years
11

12. Making Amazon So Hard to Compete With
Source: Salmon —The Store,WPP, Amazon Day, London, September 2017
https://www.recode.net/2017/5/15/15610786/amazon-jeff-bezos-public-company-profit-revenue-explained-five-charts

13. Source: Salmon —The Store WPP, Amazon Day, London, September 2017
https://revenuesandprofits.com/amazon-vs-walmart-revenues-and-profits-1995-2014/
50% of Amazon’s Profit Came From The Last 2 Years!

14. 14
The market clearly believes in Amazon’s approach
Source: The Robin Report, November 29, 2017

15. De-brief from Amazon’s
WPP Executive Immersion
Summit, October 2017
15
Customer-Centric Innovation:
Enabling Innovation for Everyone

16. Customer-Centric Innovation At The Heart of Everything
16
“We see our customers as invited
guests to a party, and we are the
hosts. It's our job every day to
make every important aspect of
the customer experience a little
bit better.”

17. 17
Enabling Innovation For Everyone: It Is Always Day 1
https://www.amazon.com/p/feature/z6o9g6sysxur57t

18. Customer-Centric Innovation—Amazon’s Growth Flywheel
18

19. Amazon’s Innovation Philosophy
19
Customer obsession—
Start every process
with the customer
and work backwards
If you want to be
innovative, you have to be
willing to fail—willing to go
down a bunch of dark alleys
and occasionally we find
something that really works
Long-term thinking—
Be stubborn on the
vision, but flexible in
the details
You have to be misunderstood for a long
time—very comfortable being
misunderstood
Organize for Innovation
F(i)=Mechanisms*Architecture ^Culture*Organization

20. Mechanisms For Innovation
20

21. Architecture For Innovation
21
• Micro-services Architectures
• Loosely coupled applications / API
culture
• Self-service platforms—no gatekeepers
Ideas can scale or close fast

22. Culture for Innovation
22
Entrepreneurial
Culture: “At Amazon
we hire builders and
let them build.”
Consistency“We hire for people. We
don’t hire for jobs.”
Bold decisions Beliefs: Amazon Leadership
Principles
Every one of us is a
leader on a mission

23. Culture For Innovation
23

24. Organization For Innovation
24

25. De-brief from Amazon’s
WPP Executive Immersion
Summit, October 2017
25
The Amazon Ecosystem

26. 26
Amazon Ecosystem: Multiple Points of Entry—Beyond, and
Building an Ecosystem of Services
Entering Physical Retail

27. 27
AMAZON DISPLAY
& VIDEO
A+
Source: Wavemaker (adapted)
—The Store WPP, Amazon Day, London, September 2017
Amazon Ecosystem: Multiple Points of Entry—Media
Over 310 Million Buyers, Over 2 Million Sellers

28. 28
Amazon’s Connected Devices: 2022 Voice Expected to
Overtake Type Search

29. Amazon Building out its Private Labels
Source: Kantar Retail—The Store WPP, Amazon Day, London, September 2017
2004
2005
2006
2009
2014
2016
2017
Outdoor patio,
lawn, & garden
Strathwood Denali
DIY tools &
accessories
Bedding, bath,
home furnishings
Pinzon
Amazon Basics
– Started in consumer electronics
accessories and home and office
supplies
– Expanded to general merchandise,
including fitness, home & pet supplies
Amazon Elements
Premium-positioned baby wipes sold
exclusively to Prime members
Test Consolidation Expansion
Amazon Fashion
7 private label apparel lines:
Franklin & Freeman, Franklin
Tailored, James & Erin, Lark &
Ro, North Eleven, Scout + Ro,
and Society New York
Expansion into
snacks, higher-end
products with the
tagline “Some eat to
LIVE, we live to
EAT”
Wickedly Prime
Happy Belly, Mama
Bear and more…
Opened multiple consumable
brands for detergent, coffee, nuts
and more all available exclusively
to Prime members
Exploration
Amazon Elements
Expansion to Vitamins and
Supplements
Amazon
Essentials
Wardrobe basics,
including men’s pants,
shorts, and women’s
underwear.

30. 30
Being a Copycat, the Classic Approach to Private Label
Source: Kantar Retail——The Store WPP, Amazon Day, London, September 2017—Mary Meeker’s Trends Report 2017, Bloomberg

31. 31
Amazon leverages its powerful digital assets to create content
around private label brands
Source: Kantar Retail—The Store WPP, Amazon Day, London, September 2017
“The Amazon Elements team is creating a global
portfolio of premium consumable products”
- Company Website

32. 32
Source: Kantar Retail—The Store WPP, Amazon Day, London, September 2017
Enhancing Fashion Credentials With private Label

33. De-brief from Amazon’s
WPP Executive Immersion
Summit, October 2017
33
Growth Pillars

34. Three Pillars of Growth
34
“AWS,, Marketplace and Prime are all examples of
bold bets at Amazon that worked, and we’re fortunate
to have those three big pillars. They have helped us
grow into a large company, and there are certain things
that only large companies can do.”
Source: Jeff Bezos, Amazon Shareholder Letter
Source: Jeff Bezos, Amazon Shareholder Letter

35. 35
Source: Bloomberg Intelligence——The Store WPP, Amazon Day, London, September 2017
Amazon AWS: Large End Market, Continued Growth

36. 36
Source: Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017
Amazon FBA: Third-Party Sellers Drive Sales Growth
• Fulfilment by Amazon program (FBA) attracts third-party sellers
• Third-Party sellers driving Amazon’s eCommerce marketshare
• Over 50% of Amazon Gross Merchandise Value driven by third-party sellers

37. 37
Source: Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017
• Amazon Prime members spend about 3X non-Prime
• 310 million Amazon customers give headroom for Prime growth
• Geographic expansion to drive memberships as U.S. reaches saturation
• Amazon monthly users in the US rank 3rd behind Facebook
Amazon Prime: Wide Ecosystem Net Attracts Prime

38. 38
Amazon Studios: Bezos’s Fourth Pillar?

39. 39
Source: Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017
Ad Business Gains Retail Ad Budgets as People Search More on Amazon
Amazon Ads: Google/Facebook Duopoly Challenger

40. De-brief from Amazon’s
WPP Executive Immersion
Summit, October 2017
40
How are Agencies and Clients
Working with Amazon?

41. 41
Precise audience reach

42. 42
Across Endemic and Non-endemic Brands

43. 43
Enhanced Content Experiences: Amazon Stores

44. 44
Amazon—Lifestyle Destination to help FinTech Brands Tell Their Story

45. 45
Automotive on Amazon

46. 46
Integrated Brand Experiences

47. 47
Fire Tablet Wakescreen & Amazon Custom Storefront

48. 48
Custom Program—Minions

49. De-brief from Amazon’s
WPP Executive Immersion
Summit, October 2017
49
How Should We Work With
Amazon?

50. 50
How to Win on Amazon
Source: Marketplace Ignition—The Store WPP, Amazon Day, London, September 2017

51. 51
Firing on All Cylinders—Follow The Flywheel
Source: Marketplace Ignition—The Store WPP, Amazon Day, London, September 2017
Graphic Credit: Jeff Cohen, Seller Labs

52. 52
Effective Content Development—Downy Case
Source: Marketplace Ignition—The Store WPP, Amazon Day, London, September 2017

53. 53
Different Paradigm: Online Winners Are Not The Same As In Store
Source: Kantar Retail—The Store WPP, Amazon Day, London, September 2017

54. 54
Succeed By Watching What Works For Amazon Private Label
Source: Kantar Retail—The Store WPP, Amazon Day, London, September 2017
1. Customer Reviews for building customer confidence
All of Amazon’s PL products began with more than 20 reviews at the time of launch
2. Combine paid and organic Amazon search optimization
Central to growing and maintaining brand awareness and visibility
3. Tailor your product offerings to Amazon specific platforms
Wickedly Prime products in single packs on Prime Pantry, multi-packs on Amazon

55. z
ACCELERATE
YOUR AMAZON
BUSINESS WITH
STRATEGIC
MEDIA
INVESTMENTS
CONSIDER
OPPORTUNITIES
IN LINE WITH
THE CONSUMER
JOURNEY
INTEGRATE
AMAZON
ADVERTISING
INTO
ADDITIONAL
DATA SOURCES
LEVERAGE AMG
TO PROVIDE
VALUE
THROUGH
INNOVATION
How To Win On Amazon through Media
Source: Wavemaker—The Store WPP, Amazon Day, London, September 2017

56. De-brief from Amazon’s
WPP Executive Immersion
Summit, October 2017
56
Future Outlook

57. 57
Amazon’s Future: Predict the Consumer with AI
Source: Bloomberg Intelligence——The Store WPP, Amazon Day, London, September 2017

58. 58
Retailers React—If You Can’t Beat Them, Join Them
Source (titles only): Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017

59. 59
Future Verticals?

60. 60
What About Marketing?
Amazon Marketing Services Roadmap 2017 / 2018

61. 61
Amazon Challenges: Margins May Shrink
Source: Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017

62. 62
Amazon Challenges: Price War with Walmart
Source: Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017
Walmart online sales rising—Google partnership may boost adoption

63. 63
Amazon Challenges: Regulatory Risk
Source (title only): Bloomberg Intelligence—The Store WPP, Amazon Day, London, September 2017

64. 64
The Fight for HQ2

65. De-brief from Amazon’s
WPP Executive Immersion
Summit, October 2017
65
Thank You
Questions?
For further information please contact:
Lara O’Shea
Global Consulting Partner, Digital Strategy, OgilvyRED:
lara.o’shea@ogilvy.com
Malcolm Pinkerton
VP, Kantar Retail:
Malcolm.Pinkerton@kantarretail.com

66. Questions?
Lara O’Shea
Global Consulting
Partner, Digital Strategy
OgilvyRED
Thomas Crampton
Global Consulting Principal,
Marketing Transformation
OgilvyRED