For the people at Amazon (AMZN) , feedback isn’t some awful squelching sound from a bad microphone. It’s music to their ears.
The e-commerce and entertainment giant is known for using customer reviews and rates to guide product development.
Related: Amazon’s big tech plans pay off for customers (and its pockets)
Jeff Bezos, Amazon’s founder and executive chairman, stressed the need to obsess over customers in his letter to shareholders way back in 1997, when he was CEO and the company was only three years old and had just gone public.
“Today online commerce saves customers money and precious time,” he said. “Tomorrow through personalization, online commerce will accelerate the very process of discovery.”
Some 70 million people were using the internet at that time, roughly the current population of Thailand or the U.K., compared with 5.52 billion, or 67.5% of the global population, who are online today.
💰💸 Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletter 💰💸
Amazon’s market capitalization was $1 billion back then, a fraction of its $2.21 trillion valuation today.
“Amazon.com uses the internet to create real value for its customers and by doing so hopes to recreate an enduring franchise even in established and large markets,” Bezos added.
Amazon CEO Andy Jassy says ‘we’re focused on making our customers’ lives better and easier.’
Amazon CEO stresses importance of AI
It’s safe to say that Amazon has endured, Now, decades later, Amazon’s current CEO, Andy Jassy, says the company is still keeping the customer in mind.
“As always, we’re focused on making our customers’ lives better and easier and thinking long term with respect to how we can keep helping customers and build a successful business to outlast all of us,” he said during the Seattle e-retail and tech group’s earnings call last month.
Related: Goldman Sachs analyst updates Amazon stock price target after earnings
Amazon has made no secret of its desire for customer input, telling consumers that “we encourage you to share your opinions, both favorable and unfavorable.”
“Customer Reviews help customers to learn more about the product and decide whether it is the right product for them,” the company website says.
Now in its 30th year, Amazon has come a long way since its early days as an online bookstore, and artificial intelligence is playing an ever-increasing role in Amazon’s approach to customer service.
Jassy said Amazon Web Services, its cloud computing platform, “continues to make rapid progress in delivering AI capabilities for customers in building a substantial AI business.”
“In the last 18 months AWS has released nearly twice as many machine-learning and [generative-AI] features as the other leading cloud providers combined,” he said.
And Daniel Slater, worldwide head of culture of innovation at AWS, called Amazon’s mission “to be Earth’s most customer-centric company.”
“We aim not just to invent for the sake of invention, but to create lasting and durable solutions for customers,” Slater said during an interview with consulting firm PWC in August.
“How you obsess constantly over creating better experiences for your customers helps you build trust, and build durable lines of business, products, and services.”
Innovation doesn’t come cheap. Amazon spent $22.6 billion on property and equipment during the quarter, up 81% from the year-earlier period, and a lot of that money went into bolstering AWS’s architecture.
The company plans to put $75 billion into capital spending in 2024 and expects an even higher number in 2025.
Analyst cites Amazon’s innovation
In addition, Amazon is reportedly developing smart eyeglasses for its delivery drivers that will help them navigate through neighborhoods, gates, buildings, elevators, etc., more quickly.
The retailer envisions that the glasses will contain a small screen on one of its lenses that would provide drivers with “turn-by-turn navigation.” The tech is intended to help cut seconds from the time each delivery requires and thus to get packages to customers as soon as possible.
More Retail Stocks:
Starbucks makes a major move many coffee drinkers will loveAmazon’s big tech plans pay off for customers (and its pockets)Once nearly-bankrupt used car dealer hits new highs
Needham analyst Laura Martin picked up the customer-centric theme in a Nov. 14 research note to investors.
Martin raised the firm’s price target on Amazon to $250 from $210 and affirmed a buy rating on the shares ahead of the firm’s Needham Growth Conference. At the conference, panels will include some of the company’s former employees, according to The Fly.
The analyst cited Amazon’s focus on customer-centric innovation, with most of its product development coming directly from customer feedback, along with its focus on scale from the very beginning of all new initiatives.
Shares of Amazon are nearly 40% higher year-to-date up 48% from a year ago.
The company debuted an online shopping service called Amazon Haul that offers products at “crazy low prices.” The service, focused on items selling for $20 or less, is available in Amazon’s shopping app and mobile website.
B of A: Amazon Haul rivals Temu, Shein
Bank of America Securities analyst Justin Post said the new storefront features prices competitive with those at PDD Holdings’ (PDD) Temu and Shein on 35-plus categories with items priced below $20.
Investors’ concerns on share loss to Chinese sites have somewhat abated as Temu’s growth has slowed, and potential tariffs could affect competitive trends further, Post said.
The analyst said, however, that establishing Haul with third-party sellers is still “a low-risk initiative, ensuring Amazon has a competitive offering with limited financial investment.”
B of A maintained a buy rating and $230 price target on Amazon shares.
Related: Veteran fund manager sees world of pain coming for stocks
