Amazon shows how to stay in front by working backwards
AMAZON, the world’s largest online retailer by revenue and market capitalisation, has championed what it calls the “Working Backwards” (WB) process to achieve its success.
This WB process may serve as a business recipe for Thailand’s digital economy and society.
According to Jeff Bezos, founder and CEO of Amazon, the WB process, when done correctly, is a huge amount of work. But, it saves even more work later.
“The process is not designed to be easy, but it’s designed to save huge amounts of work on the back-end, and to make sure we’re actually building the right thing.”
For those wanting to get a glimpse of the secret, an Amazon handbook shows it all starts with the customer and work backwards.
First of all, Amazon’s people start with a set of five questions to ensure that they really focus on the customer.
Therefore, participants of a team are required to answer these questions in depth during brainstorming sessions and related exercises.
These questions are, namely, who is the customer?, what is the customer problem or opportunity?, what is the most important customer benefit?, how do you know what customers need or want?, and what does the customer experience look like?
The answers, when done properly, are supposed to help develop valuable ideas for the team.
The Amazon Prime Wardrobe, an online fashion retail platform, is cited as an example, but the method can be applied to any other products or services. In this example, “who is the customer” is to focus on identifying the needs of end-customers on this e-commerce platform.
Suppose a female customer has this statement: “It’s always hard to decide what I want. I’m never sure if a shirt will go with what I already own.”
The statement shows this customer may also have the needs to maximise use of the clothes she already owns and/or she wants to save time and have greater convenience. Ultimately, she wants to look good.
According to Bezos, Amazon is a needs-based company so its people go through a lot of pain to understand their customers.
Once the first question is done, the WB process moves to the next question, what is the customer problem or opportunity? Based on this example, a major problem is that customers purchasing clothes have to remember the style, colour, fit, and feel of their existing wardrobe when trying them on in a fitting room at a physical store. Once there is a good understanding of the customer as well as his or her problem or opportunity, it’s time to generate a solution.
In an exercise, participants are given eight minutes to come up with eight ideas for the solution. They are encouraged to think big, think differently and not to be afraid to write down silly ideas.
The next question is what is the most important customer benefit. While participants may have eight breakthrough ideas or game-changing solutions, there may not be resources to build all of them so participants are challenged to prioritise, select and define a specific solution.
Regarding the Prime Wardrobe example, the big idea was to bring the fitting-room to customers so Prime members can choose three or more apparel items and have seven days to try them at home.
There are also free returns of the items via a pre-paid box with drop-off at UPS or the customer can schedule a free pick-up.
This allows the customer to try on new clothes before she buys with the comfort in her home.
The next question is how you know what the customers need or want. Since customer data comes in many forms, participants have to ask themselves what are the best signals on customer experience which include behavioural metrics, qualitative data and subjective metrics.
Next, what does the customer experience look like? To answer, participants are encouraged to sketch and visualise the customer experience which in this case the customer can conveniently order the clothes from the Amazon app, then a box of clothes shortly arrives at her home and she has seven days to try them in her room to see if they mix and match the existing items and she can return unwanted items in the same box at no additional cost.
Last but not least, participants are required to write a compelling press release highlighting the new shopping experience for fashion that effectively brings the fitting room into the comfort of home. If the press release is approved, the team has the green light to implement the project.
