Digital Transformation Project – Group 35
In recent times, online retailing has undergone significant transformation as a result of increased competition. In this fierce competition, Amazon is one of the leading players.
A thorough analysis of Amazon’s IS strategy showed us that Amazon has always been a forerunner in innovating and implementing the newest technologies and IS strategies. Amazon follows a data driven approach and has heavily invested in big data analytics. These intelligent models have helped provide customized solutions to customers. Amazon has also greatly leveraged its partnerships and set up successful networks. Such and many other strategies have been key success factors for Amazon.
However, consumers have become more demanding in terms of having an enriched shopping experience. While interviewing an Amazon employee, we found that increasing product return rates has become a disturbing trend from them. One emerging technology we felt could help them reduce their returns rate and enable them to create a strategic difference in its business approach is ‘Augmented Reality’. Since customers will be able to make better informed purchase decisions, there will reductions in returns.
A thorough evaluation of the AR technology proved to a feasible venture for amazon. Amazon has already ventured into this arena with Amazon Flow, a visual search engine. Amazon also plans to expand further in online groceries segment where AR has already made waves. Thus venturing in AR is strategically advantageous for Amazon. Technologically as well, there are not many constraints since a wide variety of applications already exist. Amazon’s main task would be to collate these different technologies and integrate them.
Internet will be the primary mode for user interaction for the AR system. Also, a camera would be required to capture the user’s physical environment. In order to ensure that the user sees the actual size of the virtual product, the Tangible AR technique can be implemented. (Kato et al, 2000). The implementation of the AR system should begin with pilot implementations in the first year as it would give meaningful insights and customer feedback. Secondly, it is important to integrate the newly developed AR system with the existing knowledge base and workflows. The context-specific information gathered from AR can be used to enhance other functions such as warehousing requirements, delivery logistics and relationships with third-party sellers.
The benefits that Amazon will be able to gain with successful implementation of AR are increased sales and profits, lesser returns and increased customer satisfaction. Amazon could also find new avenues via AR and this will reinforce Amazon as a pioneer in technological innovation. We have also identified some risks like compatibility issues in integration of available technologies. Since AR is still emerging, there is no confirmation of the final cost of the implementation. If the final developed system ends up too bandwidth-heavy, too slow or the interface is difficult to comprehend, it will dissuade customers from using the feature.
In conclusion, we can see that there are certain risks involved with implementing this new technology but the benefits certainly outweigh these risks.
Abhilasha Gupta 439253
Deepanshu Pattanayak 439337
Swati Seth 439362