What You Can Learn from Amazon's Competitive Research Tactics
The Wall Street Journal recently revealed how far Amazon will go to gain an edge over its competitors. While the retailer’s "Project Curiosity" may raise ethical concerns, there are valuable lessons that businesses of all sizes can learn from this case study.
The Importance of Competitive Intelligence
One of the key takeaways from Amazon's "Project Curiosity" is the massive importance of competitive intelligence - by gathering data on its rivals' operations, pricing strategies, and logistics networks, Amazon gained critical insights that allowed it to optimize its own processes and stay ahead of the competition.
Amazon has a benchmarking team dedicated to evaluating its competitors' operations and performance. This team uses tactics like placing orders on Walmart.com and tracking their delivery times, assessing their shipping networks and their overall customer experience.
In fact, WSJ also reported that Amazon team members purchased multiple products at Trader Joe’s when the retail behemoth was considering starting their own private label food brand. While Trader Joe’s does not offer online shopping - including online reviews where best-sellers could be identified - Amazon tried to piece together a competitive puzzle from these products (albeit through some unethical means).
Conference Footprints
Project Curiosity team members also attended eBay's seller conferences, posing as employees of the shell company Big River Services International, without disclosing their affiliation with Amazon.
While this tactic raises obvious ethical concerns, it highlights the potential value of attending industry events and conferences organized or sponsored by competitors. Companies can gain competitive intelligence by reviewing their rivals' presence at such events, analyzing the topics discussed, products showcased, and highlighted strategies.
Ground Level Operations
Project Curiosity members worked in Amazon warehouses to help pack and ship out orders placed through their Big River front company. This hands-on experience likely provided valuable insights into Amazon's own logistics and fulfillment operations from the perspective of a third-party seller.
By going through the motions themselves, Project Curiosity team members could quickly identify areas of improvement in Amazon's fulfillment and shipping processes. Having company leadership get operational-level experience can offer important insight that may not clearly show from a top-down view.
While Amazon's tactics may have been effective, they also raise ethical concerns that could potentially damage the company's reputation. Naturally, companies should only undertake competitive practices that are ethical, legal and approved by all team members.
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