The Amazon CardThe Amazon Card

Business Solution byBusiness Solution by

BDKPP ConsultingBDKPP Consulting

IntroductionIntroduction

Who we are: BDKK Consulting Diverse team of individuals from varying Who we are: BDKK Consulting Diverse team of individuals from varying business backgroundsbusiness backgrounds

According to Visa, “purchasers spent $37.6 billion on Visa credit and According to Visa, “purchasers spent $37.6 billion on Visa credit and debit cards for online purchases January through May of this year, up debit cards for online purchases January through May of this year, up 59% from $23.7 billion during the same period a year ago.”59% from $23.7 billion during the same period a year ago.”

“…“…Moreover, almost one-half (48%) of Internet window shoppers who Moreover, almost one-half (48%) of Internet window shoppers who reported making a purchase as a result of their on-line search said they reported making a purchase as a result of their on-line search said they were very concerned about using their credit card on the Internet.”were very concerned about using their credit card on the Internet.”

-Statistics Canada (E-Commerce: Shopping on the -Statistics Canada (E-Commerce: Shopping on the

Internet. November 1, 2006)Internet. November 1, 2006)

The Opportunity at HandThe Opportunity at Hand

To build on Amazon.com’s current To build on Amazon.com’s current operation and procedures in order to grow operation and procedures in order to grow the businessthe business

To approach growth in a way which To approach growth in a way which utilizes non e-commerce channels to utilizes non e-commerce channels to strengthen operations and increase profitstrengthen operations and increase profit

To expand Amazon.com’s target marketTo expand Amazon.com’s target market

Amazon’s Payment Channels TodayAmazon’s Payment Channels Today

Gift Certificates Gift Certificates – Denominations between $5 and $5,000Denominations between $5 and $5,000– Different delivery options (ie. e-mail, e-card)Different delivery options (ie. e-mail, e-card)

Credit cardsCredit cards- Accept all types of credit cards (ie. Visa, Accept all types of credit cards (ie. Visa,

Mastercard, and American Express)Mastercard, and American Express)- Expensive for Amazon – Charged for every Expensive for Amazon – Charged for every

credit card transactioncredit card transaction

Online Payment Systems TodayOnline Payment Systems TodayCredit CardCredit Card– The dominant payment method of the internetThe dominant payment method of the internet

PayPalPayPal– an e-commerce business allowing payments and an e-commerce business allowing payments and

money transfers to be made through the internet money transfers to be made through the internet

NetellerNeteller– Electronic Money ServiceElectronic Money Service– Customers can use their Neteller accounts to Customers can use their Neteller accounts to

transfer funds online and deposit from or withdraw transfer funds online and deposit from or withdraw into banks around the world into banks around the world

High-Level Competitor AnalysisHigh-Level Competitor Analysis

Market ResearchMarket Research

Market Research - CustomersMarket Research - Customers

Which of the following statements best describes your attitude towards shopping on the internet?

19%

72%

9%18.5% (20/108) - I don't shoponline, so it doesn't concern me

72.2% (78/108) - I buy somethingnow and then, but am not a regularinternet shopper

9.3% (10/108) - I shop online all thetime

Market Research - CustomersMarket Research - CustomersWhich of these payments methods do you use online? (Select all

the ones you have used) <Total # of respondents - 108>

0

10

20

30

40

50

60

70

80

90

Credit Card Pay Pal Neteller Gift Card Does Not Apply

Market Research - CustomersMarket Research - CustomersHow concerned are you about safety while shoppping online?

7%

42%42%

9%Not concernedat all

Somewhatconcerned

VeryConcerned

Does Not Apply

Market Research - CustomersMarket Research - Customers

If there was an option to buy a preloaded card at a local store (you can pay for it using any method of payment - cash, debit, etc) and use it like a gift card on the internet, would you be interested in

using it?

30%

61%

9%

No

Yes

Does Not Apply

Market Research - CustomersMarket Research - CustomersIf you answered yes to the previous question, would you prefer

such a card to using your credit card online?

10%

55%

35%No

Yes

Does NotApply

Market Research - RetailersMarket Research - Retailers

3 Retailers Interviewed3 Retailers Interviewed– Hyun Chau, Owner – Hyun Chau, Owner – Busy Bee ConvenienceBusy Bee Convenience– Robert Larson, Duty Manager – Robert Larson, Duty Manager – Best BuyBest Buy– Liz Poisson, Front Store Manager – Liz Poisson, Front Store Manager – Shopper’s Shopper’s

Drug MartDrug Mart

All 3 acknowledged importance of e-All 3 acknowledged importance of e-commerce and its growthcommerce and its growth

Market Research - RetailersMarket Research - Retailers

Online sales make up increasing % of Online sales make up increasing % of Best Buy revenuesBest Buy revenues

E-commerce effects suppliers of small E-commerce effects suppliers of small businessbusiness

Larson & Poisson confirmed safety Larson & Poisson confirmed safety concernsconcerns

All 3 mentioned credit as most popular All 3 mentioned credit as most popular payment methodpayment method

Market Research - RetailersMarket Research - Retailers

When asked about partnering with When asked about partnering with Amazon to sell a product like Amazon Amazon to sell a product like Amazon CardCard– Chau expressed reservations due to Chau expressed reservations due to

denominationsdenominations– Larson concerned about competitionLarson concerned about competition– Poisson most interested as Shopper’s already Poisson most interested as Shopper’s already

partners with other companies partners with other companies

MARKETING STRATEGYMARKETING STRATEGY

The SegmentsThe Segments

Those without credit cards

Immigrants with no credit

Younger Segment (15-25)

Middle Aged Segment (35-45)

For those with credit cards

15 - 25 25 - 35 35 - 45

Chosen SegmentChosen Segment

15-25 with or without credit cards15-25 with or without credit cards((The chosen segment are those individuals between the ages of 15 and 25 who The chosen segment are those individuals between the ages of 15 and 25 who

do not yet have a credit card and would still like to make purchases online, do not yet have a credit card and would still like to make purchases online, however are incapable due to a no credit, bad credit or limited credit. )however are incapable due to a no credit, bad credit or limited credit. )

StudentsStudentsEducationEducationDescent disposable incomeDescent disposable incomeSociableSociableLiving at homeLiving at homeUrban part of cityUrban part of cityPart-time jobsPart-time jobs

TargetTargetThe reason the Amazon Card will appeal to these The reason the Amazon Card will appeal to these

individuals is because individuals is because

1)CONVENIENT - they can pick them up at their local big 1)CONVENIENT - they can pick them up at their local big box store such as Wal-Mart, Chapters or Indigo, box store such as Wal-Mart, Chapters or Indigo,

2) UNLIMITED PURCHASING POWER - due to limited 2) UNLIMITED PURCHASING POWER - due to limited credit, they might not be able to purchase the higher credit, they might not be able to purchase the higher priced items on Amazon, and priced items on Amazon, and

3) SAFE AND INSTANT, these people do not have to wait 3) SAFE AND INSTANT, these people do not have to wait for their monthly statements to pay for their items and for their monthly statements to pay for their items and can maybe avoid interest. The following is a value can maybe avoid interest. The following is a value map of our target segment and their aligned needs:map of our target segment and their aligned needs:

Positioning (the one word)Positioning (the one word)

Grab and GoGrab and Go

ConvenientConvenient

SafeSafe

InstantInstant

UnlimitedUnlimited

No feesNo fees

The Customer ExperienceThe Customer Experience

Card DesignCard Design

– Designed specifically to allow any Designed specifically to allow any customer to recognize the Amazon customer to recognize the Amazon brand.brand.

– Amazon uses a distinct logo, font and Amazon uses a distinct logo, font and specific orange colour to display their specific orange colour to display their image and brand. image and brand.

Needs AnalysisNeeds Analysis

How it fulfills their needsHow it fulfills their needs

– Quick purchasing abilityQuick purchasing ability– No need of having a credit card or established online payment systemNo need of having a credit card or established online payment system– Safer for users who cannot trust giving away their banking or credit card Safer for users who cannot trust giving away their banking or credit card

informationinformation

How customers receive value from itHow customers receive value from it

– Customers will receive value from this card because it can be used for Customers will receive value from this card because it can be used for personal use or also be given to anyone as a giftpersonal use or also be given to anyone as a gift

– The driving force behind this card addresses the payment needs of The driving force behind this card addresses the payment needs of teenagers with online access, disposable income, but no credit card; teenagers with online access, disposable income, but no credit card; individuals who hesitate to purchase online because of privacy fearsindividuals who hesitate to purchase online because of privacy fears

– Consumers who are fearful of credit/debit card Consumers who are fearful of credit/debit card fraud will be attracted to fraud will be attracted to this card, since it protects them from identify theftthis card, since it protects them from identify theft

Customer Interface Customer Interface

How customers will interact with the product online?How customers will interact with the product online?

Prepaid cards for online payments will be distributed as simple scratch-off Prepaid cards for online payments will be distributed as simple scratch-off cardscards

Purchasing of any product available via Purchasing of any product available via www.amazon.comwww.amazon.com, through quick , through quick check out by adding items into the shopping cart, providing an address check out by adding items into the shopping cart, providing an address information, choosing a method of payment from information, choosing a method of payment from visa/ mc/ amex/ paypal visa/ mc/ amex/ paypal or or Amazon card. And then Amazon card. And then in its most simple form, a unique account number is in its most simple form, a unique account number is concealed beneath an area of the card that can be scratched off to reveal concealed beneath an area of the card that can be scratched off to reveal the underlying digits. This number is then entered into a provided space to the underlying digits. This number is then entered into a provided space to make a payment. make a payment.

Each time the card is used, the purchase amount is automatically deducted Each time the card is used, the purchase amount is automatically deducted from your balance. from your balance.

The remaining balance can not be converted to cash. However the card The remaining balance can not be converted to cash. However the card does not have an expiry date and can be re-used at any later time. does not have an expiry date and can be re-used at any later time.

The 7 C’s The 7 C’s Context Context

Amazon loads quickly, have good information architecture, and have a tremendous choice of Amazon loads quickly, have good information architecture, and have a tremendous choice of products available for purchase online. products available for purchase online.

ContentContentAmazon.com provides products that address both cognitive and emotional appeal. It has effective Amazon.com provides products that address both cognitive and emotional appeal. It has effective calls to action and updated on a regular basis. calls to action and updated on a regular basis.

CommunityCommunityThis site provides a forum for community activities. Participants engage in discussion and This site provides a forum for community activities. Participants engage in discussion and reinforce the brand or do the opposite.reinforce the brand or do the opposite.

CustomizationCustomizationSite visitors are drawn to customization and personalization. An example can be a personalized Site visitors are drawn to customization and personalization. An example can be a personalized gift cards.gift cards.

CommunicationCommunication Customers need to register in order to participate in live community or to leave a feedback on a Customers need to register in order to participate in live community or to leave a feedback on a previously purchased product. previously purchased product.

Connection Connection Amazon’s interface is designed to facilitate selling of goods on its site. There are links from a Amazon’s interface is designed to facilitate selling of goods on its site. There are links from a third party sites whose content complements Amazon’s. third party sites whose content complements Amazon’s.

CommerceCommerceAmazon.com provides secure check out that does not ask for personal information once a user Amazon.com provides secure check out that does not ask for personal information once a user has been registered. It also protects customer’s privacy therefore it does not disclose confidential has been registered. It also protects customer’s privacy therefore it does not disclose confidential information. It reveals shipping costs upfront, supplies customer service and order confirmation information. It reveals shipping costs upfront, supplies customer service and order confirmation data. data.

The 4 P’sThe 4 P’sProductProduct

– Similar to phone cards with scratchable pin area at Similar to phone cards with scratchable pin area at the backthe back

– Designed specifically to allow any customer to Designed specifically to allow any customer to recognize the Amazon brand.recognize the Amazon brand.

– Amazon uses a distinct logo, font and specific Amazon uses a distinct logo, font and specific orange colour to display their image and brand. orange colour to display their image and brand.

The 4 P’sThe 4 P’sPlacePlace

Sold through partnered brick-and-mortar retailers (Shoppers Drug Sold through partnered brick-and-mortar retailers (Shoppers Drug Mart, Chapters, Indigo) Mart, Chapters, Indigo) – The reason for this is because they are accessible by the public easily and their The reason for this is because they are accessible by the public easily and their

brands are highly reputable therefore not devaluing the card’s image.brands are highly reputable therefore not devaluing the card’s image.

PricePrice Denominations of $20, $50, $100, $250Denominations of $20, $50, $100, $250– The price for Amazon to distribute the card to retailers will be a percentage of The price for Amazon to distribute the card to retailers will be a percentage of

sales that they make. This percentage, depending on dollars sold per sales that they make. This percentage, depending on dollars sold per merchandiser, will be approximately 10 -12%, that being negotiablemerchandiser, will be approximately 10 -12%, that being negotiable

PromotionPromotion

Marketed through:Marketed through:Television ads Television ads Magazine ads Magazine ads

Billboards Billboards InternetInternet

Moving ForwardMoving Forward

Lead into the futureLead into the future

Continuing to leverage systemsContinuing to leverage systems

Acquire customer data as beforeAcquire customer data as before

Add valueAdd value

Add to brandAdd to brand

Thank You!Thank You! Questions?Questions?