Amazon.com's secret project: Code name 'Vitamin C' |
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Amazon.com's secret project: Code name 'Vitamin C'
Amazon.com often names internal projects after cities and rivers in Brazil and Latin America. So I was surprised to hear from a couple sources about an Amazon project code-named "Vitamin C." It's an effort to consolidate the company's enterprise business, which builds ecommerce platforms for big retailers like Target and Marks & Spencer, and its WebStore business, which gives smaller retailers tools to set up online stores. Details are sketchy on Vitamin C, but the idea is for Amazon to target middle-market retailers with a hybrid of the two services.
The code name "Vitamin C," as I understand it, came from an analysis Amazon did of merchant revenue that divided the market into segments from "A" to "E." The "C" in Vitamin C is a reference to the mid-market strategy.
Told about the project, Brian Walker, a Seattle-based ecommerce analyst for Forrester Research, said the idea has potential.
“There is a significant opportunity to serve the middle market online retailer doing between $5-$25 million in revenue," Walker said. “It’s a very fractured marketplace today. It would make sense for Amazon to target that market."
He described Amazon Webstore as a "simple, straightforward" service but said it lacks the flexibility in branding, merchandising, and promotions that many mid-market retailers want.
Asked about Vitamin C, Amazon spokeswoman Patty Smith said, "We don't comment on rumors and speculation about the company."
A couple other ecommerce platform companies are targeting for mid-market online retailers, including ProStores (owned by eBay), MarketLive, Volusion, and others.
Is Amazon's focus on middle-market enterprise customers a sign that its high-level enterprise strategy is faltering? Amazon has provided the ecommerce backbone for Target since 2001, and does the same for U.K.-based Marks & Spencer and other retailers. It has also lost some big customers in recent years, including Toys "R" Us and Borders book chain. A spokeswoman for Target tells me the retailer's current contract with Amazon runs through August 2011.
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