Amazon and Souq.com Innovation Analytics (Customers Database)
A decade ago, the availability of an online marketplace was an unimaginable thought; in 2005, an online marketplace “Souq.com” was created in the United Arab Emirates to become one of the most popular portals and redefined technology. It became a leading e-commerce marketplace company in the Middle East that has recently been acquired by Amazon.
After Souq came into its own as an independent entity in 2009, their focus was on retail, and their hard decision was to be able to meet customer expectations and grow the B2C (business-to-consumer) function; they started since then finding out what the customers want, and how they can adapt. This period in Souq’s life cycle was a turning point for the company, but building up and transforming the website’s product catalog was, at the time, a rather robust process for everyone involved at the startup. This was just the start of Souq’s transformation into the Middle
East e-commerce giant it is today; as soon as the company felt it had improved the experience of the shopper on its website, they began to look at improving whatever happened post-click (Thomas, 2018), and that resulted in significant investments being made in payment, logistics, after-sales, and other such areas of the customer journey. Today, Souq.com features 8.4 million products and attracts 45 million visits per month. Souq.com also realizes that coming up with special events—such as Mobile Mania and White Friday, the equivalent of America’s Black Friday—is one effective way to spruce up even more business.
Dubai being its headquarters has helped Souq.com knack for technology, media, and marketing and indeed helped the team scale greater heights. Also, people getting connected with mobiles helped Souq.com build its brand further, primarily through social media channels. Customers needs and expectations have changed dramatically in recent years; 80% of customers shop through their mobile phone, so Souq focused on enhancing its mobile app’s performance and usability. The six critical values in Souq’s culture are trust, fun, innovation, initiative, growth, and the “wow” factor based on data software connecting customers to business and supply chain in an online data process.
The e-commerce business model for Souq.com caters to the needs of local markets with commercial offices in Egypt, the Kingdom of Saudi Arabia, and Kuwait, and a technical and development center in Jordan. In respect to the Souq growth journey, it managed to raise many funds during that time before the alignment with Amazon; the two companies approached innovation and customer-centricity to fuel their respective businesses partnership exchanging database and market knowledge. From Amazon’s perspective, they were looking to enter the Middle East as part of its international expansion—and Souq proved to be the perfect vehicle, both are driven by customers, invention, and long-term thinking. Through this acquisition, Amazon will help Souq to continue to innovate in all sorts of capacities; customers will see more choice, which is very clear, to tap into the global supply of Amazon, its merchant base, and the partners that they work with.
The benefit from the acquisition with Amazon will enable Souq to drive further growth, benefit from their technological investment, offer a more extensive product selection through worldwide sourcing, deliver an enhanced customer service experience, as well as continue Amazon’s excellent track record of empowering sellers locally and globally, and Amazon’s customers will remain the key focus. They will continue to deliver a seamless online shopping experience. Their aim is to combine technology with trade, potentially with point-of-sale services.
What makes Amazon the most innovative company of the current era is its technological innovation, marketing strategy, and most importantly, its business model. Amazon has grown from book-selling websites to logistics, consumer technology, cloud computing, and most recently, media and entertainment. As a result of its e-commerce business model, Amazon launched its services to more markets and expanding horizons. They increased their sales numbers and customers and hence revenue (Singh, Google, 2019).
The business strategy of Amazon consists of investing in technologies, enhancing its logistic applications, improving its web services by fulfillment capacity, M&A strategy, Amazon Web Services (AWS) segment, R&D activities in logistics, and experimenting with Fintech. AI is one tight area where, despite having many competitors, Amazon got a big draw. It is continuously focusing on AI and machine learning to enhance customer experience, as an example for that Amazon’s partnership with Microsoft ensures collaboration for researching in AI, where they developed Cortana and Alexa to communicate service offer to the users. Amazon announced its Alexa everywhere in 2017, and amazingly, it became a massive success despite the presence of other top personal assistants in the market. During the last few years, Amazon made multiple acquisitions to strengthen its core e-commerce operations. Additionally, it also invested in technology companies such as Harvest.ai—a cybersecurity player—and Do.com—a software for meeting productivity needs.
Internationally, and for growing its e-commerce in the region, Amazon expanded its operations by acquiring other businesses such as Souq.com in the Middle East. Recently, Amazon made their first acquisition of 2018, their second-biggest ever, in a deal valued more than $1 billion purchasing Ring, a video doorbell maker who shows their interest in robust home security to flourish their Amazon key service. Amazon has been experimenting with Fintech initiatives and intends to become a prominent player in the Fintech segment (Singh, GreyB Services, 2019).
Airbnb Innovation Analytics (New Product Development)
Airbnb is an online marketplace that matches people who rent out their homes— “hosts”—with people who are looking for a place to stay—“guests.” Airbnb uses controlled experiments to make decisions at every step of product development, from design to algorithms. They are important in shaping the user experience. Airbnb is a company with the most prominent digital products in the world today; it’s known for the innovative ways they use their data.
Since its establishment in 2008, Airbnb has led the growth of the sharing economy by allowing thousands of people around the world to rent their homes or spare rooms. At the end of 2011, Airbnb was entering hyper-growth with 13 international offices and over a million nights booked in 182 countries (Kirkland, 2014). One of Airbnb’s fundamental beliefs is that every employee should be empowered to make data-informed decisions. The reason behind this growth is keeping its product- market fit. This changed Airbnb’s entire product strategy and opened them up to develop new business categories. Product-market fit is the only thing that matters for them; they believe that if nobody wants what you’re selling, then you do not have a business. Moreover understanding that Airbnb’s product was the trip gave the team the right constraints to focus on innovation that rolled up to the brand promise, even as the market shifts, they could not have done this without first understanding how the customer saw their product. This allowed them to see what kinds of brand and product extensions were believable to customers and fit into their brand.
Establishing product-market fit can be incredibly challenging and requires much strategic planning around any intended users; the better you know them, the more clearly you understand their needs and motivations, the better you can optimize your product for them. Companies that understand their users better than their competitors can develop a product that’s better fit for their market (Mandelli, 2018), which applies to the NPD concept. As the platform expands and spreads around the world, the data scientists at Airbnb are continually identifying and improving pain points to keep the end to end-user experience frictionless and positive. It is easy to focus on the happy user, the “correct” user path. Product analytics becomes a straightforward, reductive process when everyone does everything right, and everything goes well. You have your product funnel, and you track conversions from point to point.
The user journey is complicated; using data in the product development process is difficult because your users and their journeys are far from straightforward. This is the crux of why product analytics is crucial: robust and data-driven product teams will have the insight to build products that better serve your users, outclassing your competitors. In this highly competitive space, inches matter, and any tool that can give product teams an edge becomes a force multiplier. Data, like Airbnb and others have shown, has become one of those things that can give product managers and their companies an edge. Consider again Airbnb and their relatively new Data University. Their approach to democratizing data is to spread the skills, letting each employee learn as much as is desired or necessary to interact with data.
Another essential aspect that Airbnb focuses on is using large-scale experiments to test new products and innovations to guide decisions. Airbnb recently ran an experiment to test the impact of a new landing page design on search engine ranking and traffic. To conduct the experiment, Airbnb claimed the fact that it had landing pages with different URLs for different markets (San Francisco, Boston, New York, etc.). This meant that they could randomize the different URLs to include the new design or not, thereby isolating the design’s effect on search engine traffic; by doing that, they were able to show that the new design was a success; the new landing page turned out to drive an increase of ~3-5% in search traffic, an improvement corresponding to tens of millions of incremental visitors per day for the platform (Fossett, 2018). Based on these findings, Airbnb launched a new design for all markets. Airbnb is based on the idea of the sharing economy, which is being celebrated for cities. People all over a city, in 60 seconds, can become microentrepreneurs.
Alibaba Strategy (Investing in People Knowledge)
Recognizing the power of data, Alibaba, a Chinese online and mobile commerce company, has created an open culture based on information sharing and transparency. Its vision is based on technology to buy, sell, finance, and deliver goods on its digital platforms around the world. Alibaba (BABA) is an online retailer; its business model is different from the leading e-commerce businesses in the United States. Whereas Alibaba is divided into three core businesses: Alibaba, Taobao,
Tmall, all three e-commerce websites serve to connect various types of buyers and sellers, allowing Alibaba to act as a middleman in Chinas emerging e-commerce industry (Blystone, 2019). From e-commerce and payments systems to cloud services and AI, there are few sectors left in which Alibaba hasn’t already established a strong presence.
With respect to making vast piles of money and investing billions, Alibaba has also become a great example of success united with responsibility. Alibaba has developed a relaxed culture in which employees are the primary focus. Mentorship has been actively encouraged, and employees are often switched among the company’s multiple divisions to broaden their experience (Mittal, 2018).
This culture, which values entrepreneurship, innovation, and service, facilitates the sharing of data efficiently across the organization. Alibaba attempts to educate all of its employees about big data. Alibaba believes those in charge of commercial operations should also be familiar with data analysis and, as such, provides necessary training. As a reason, in many companies, business intelligence and other departments are divided, making it difficult to link data analysis with daily operations. Also, the company’s policies and procedures are prepared to promote and encourage innovation; the company seeks to unleash each employee’s full potential by giving employees enough space to innovate. For example, under the company’s “horse race” program, employees are encouraged to submit ideas to a committee. Approved ideas then become projects that are pursued with adequate resources and funding (IBM, 2014).