In its first decade of operation, Amazon.com went from a CE renegade struggling to obtain vendor authorized merchandise to the industry’s 20th-largest seller of consumer electronics and computer products with over $800 million in category sales.
Much of the groundwork was done by Frank Sadowski, a former Silo buyer and merchant for Sun Television and Appliance, who helped forge relationships with manufacturers at a time when e-commerce was still a dirty word within a channel-sensitive industry.
Sadowski is now using those skills full-time as Amazon’s VP/global CE vendor management, leaving the department’s next phase of growth to Glenn Cunningham, VP of the e-tailer’s electronics store.
Apparently, Cunningham’s off to a solid start, with Amazon’s CE sales outpacing total industry growth by a factor of between three and four. Some of that acceleration can be attributed to selection: Amazon’s CE offering includes some 300,000 products and features about 200 name brands. To improve availability — as well as reach and profits — the company has partnered with 500 retail sellers ranging from Target, J&R Music and Office Depot to individual entrepreneurs. These third-party affiliates, many of whom pay a fee to be listed alongside product displays, account for about 25 percent of Amazon’s CE business, Cunningham said.
Also fueling hits and sales is Amazon’s proprietary personalization software which tailors the customer experience based on past purchasing and browsing behavior. Visitors are also drawn by the site’s renowned consumer reviews, and, more recently, product news drawn from leading enthusiast sites.
Amazon also caters to the coveted early adopter crowd by being the first out of the gate with new product launches, and by offering customers pre-orders on buzz-generating new devices — which in effect creates virtual shelf space for items not yet shipped. “We want to be the best place to search, find and buy consumer electronics,” Cunningham said.
Amazon has already achieved that goal in the eyes of Consumer Reports, which rated the site as the best place to buy consumer electronics in its December 2004 and July 2006 issues, Cunningham noted.
Cunningham is preparing for the next decade of growth by putting a new retailing team in place, led on the A/V side by Tweeter veteran and former industry consultant Noah Herschman. The department is also testing a range of third-party home installation services in order to remain competitive within the white hot flat panel HDTV category.
Looking ahead, Cunningham said he is “very excited about the fourth quarter and very optimistic about our business.”