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Amazon Innovation strategy: How did Amazon’s one-click system come about by encouraging employees to innovate?

Amazon presented another case where the company encouraged the culture of sharing employee ideas and implementing them.

The Idea and Implementation

In 1997, Amazon’s CEO Jeff Bezos discussed his intention to make online purchases simpler with Shel Kaphan, the Head of software development and interface engineer Peri Hartman. Hartman, a University of Washington computer science graduate, designed a system that preloaded a customer’s credit card information and preferred delivery address before allowing customers to complete a transaction with a simple click of a button whenever they ordered a product.

Peri Hartman wanted to make the ordering system as seamless as possible, so he designed the software to enable 1-click purchases. The concept was successfully implemented, and Amazon patented it in 1997. Later, Amazon started to license the technology to other firms, including Apple. Amazon launched Amazon Marketplace, a platform for third-party buyers and sellers to offer new and used items, a year after obtaining the 1-Click patent. At the time, Amazon needed the database of customer information that 1-Click provided. 

“When we write the history of electronic commerce, the 1-Click patent … allowed Amazon to create a very strong position in the market, most importantly, it allowed Amazon to show customers that there was a good reason to give them their data and the permission to charge them on an incremental basis. It opened up other avenues for Amazon in e-commerce. That is the real legacy of the 1-Click patent.”

R. Polk Wagner, a professor at the University of Pennsylvania Law School and an expert on patent law.

Results

Amazon’s revenue had grown to $177 billion by the time the patent expired in 2017. When Amazon received the patent in 1999, the idea of consumers entering their billing, shipping, and payment information once and then just clicking a button to buy anything was unheard of, and it signified a breakthrough for the idea of hassle-free online shopping.

Encouraging employees to share their ideas is a proven way of improving a company’s overall performance. This story is a fine example of how capturing ideas at the workplace can be beneficial. And while there are multiple avenues to capture ideas, it is proven that idea management software fares far better than other traditional tools like suggestion boxes and dedicated email channels. Need help in getting the right idea management software for your organization? This list can help. 

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