Amazon built its business as a pioneer in the mid 90s, selling books (and then CDs, and then electronic goods, and then home ware and then jewellery and then pretty much anything) on the internet.  Increasingly it is using the expertise which it has built up in this arena to sell its services to major store groups.  In the US, organisations such as Toys R Us, CD Now and the NBA already use Amazon’s technology and workflow to deliver via the online channel – Marks and Spencer are their first European customer, but one suspects that they will be the first of many.

This trend is a telling comment on the ever maturing nature of corporate online activity.  It suggests that beyond technology, design, content management and graphics that organisations such as M & S understand that disciplines such as fulfilment, scalability, customer experience, upsell and integration with other internal mechanisms are fundamental to the success of the online arm of their business.

Marks and Spencer have learned this lesson the hard way.  Some of their 24m online visitors from 2004 experienced real difficulties in using the website.  During promotional times and in the run up to Christmas many customers were unable to browse through products and place orders.  In their defence M & S have taken the situation as seriously as they might have had someone struggled to buy a product from one of their high street stores.

Few do better online commerce better than Amazon – they have $7b revenue from last year to show for it.  And with competition hotting up on both sides of the Atlantic for pure e–commerce websites, it makes sense that they should diversify in this manner.  Another benefit for M & S is that it will allow them to focus on their core business.

John Davison, Retail Analyst at Gartner summarises the rationale as follows:

“A lot of stores are struggling with how to operate a multi–channel sales environment.

“Amazon is not what you would normally consider an IT services provider, but it has been pretty successful in running its own website.

“E–tailing is something it has as a core competence, and it can leverage that to sell to retailers.”

There are lessons to be learned from this move, by organisations of all sizes.  The key message which it sends is that beyond the cosmetics of web design there is a need for all businesses to manage the online channel with the same commercial focus and drive for return on investment which other more traditional channels enjoy.

The result of the M & S foray should be an integrated experience for their customers, whether they buy products in store, online or by telephone.  Integrated customer management across all channels can reap cost savings, happier customers, enhanced sales and an improved brand for organisations of all sizes and industries.  And as M & S have shown, that can only be achieved by focussing on all of the areas of your business which the internet impacts.