Amazon.com 2002 Annual Report Download - page 13

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Marketing and Promotion
Our marketing strategy is designed to strengthen and broaden the Amazon.com brand name, increase
customer traÇc to our Web sites, encourage customers to shop in many product categories, promote repeat
purchases and develop incremental product and service revenue opportunities. First and foremost, our best
marketing eÅorts are focused on improving the customer experience, which drives word-of-mouth
promotion and repeat customer visits. We also deliver personalized Web pages and services and employ a
variety of media, business development activities and promotional methods to achieve these goals. We
beneÑt from public relations activities and from time to time we employ various means of online and
traditional advertising, including e-mail, radio, television and print media and direct marketing. We also
participate in cooperative advertising arrangements with certain of our vendors. We direct customers to our
Web sites through our Associates program, which enables associated Web sites to make our products
available to their audiences with fulÑllment performed by us. Currently, over 900,000 Web sites have
enrolled in our Associates program. In addition, we oÅer an everyday free shipping option at
www.amazon.com for certain orders that exceed a speciÑc amount, and oÅer similar options for our
internationally-focused Web sites. Although marketing expenses do not include our free and reduced
shipping oÅers, we view such oÅers as an eÅective marketing tool.
Customer Service
We believe that our ability to establish and maintain long-term relationships with our customers and
to encourage repeat visits and purchases depends, in part, on the strength of our customer service
operations, and we continually seek to improve the Amazon.com customer service experience. Customers
can use the ""your-account'' website features to track order and shipment status, review estimated delivery
dates, cancel unshipped items, change delivery information and payment options, combine orders, edit gift
options and return items. In addition to these and similar online self-service features, users can contact
customer service representatives 24 hours a day, seven days a week. We have automated certain tools used
by our customer service staÅ and have plans for further enhancements. We currently have customer
service personnel working in six customer service centers located in Tacoma, Washington; Grand Forks,
North Dakota; Huntington, West Virginia; Slough, the United Kingdom; Regensburg, Germany; and
Sapporo, Japan. In addition, we have customer-service cosourcing arrangements with certain vendors in
India, Northern Ireland and the U.S.
FulÑllment
We currently lease and operate U.S. fulÑllment facilities in New Castle, Delaware; CoÅeyville,
Kansas; Campbellsville and Lexington, Kentucky; Fernley, Nevada; and Grand Forks, North Dakota. We
also lease and operate three European fulÑllment centers that are located in Marston Gate, the United
Kingdom; Orleans, France; and Bad Hersfeld, Germany. In Japan, Nippon Express, a leading courier
company, provides fulÑllment services for orders from www.amazon.co.jp under a cosourcing arrangement;
and in Canada, Assured Logistics, an aÇliate of Canada Post, provides outsourced fulÑllment services for
orders from www.amazon.ca. On an aggregate basis, these fulÑllment centers (including the facilities that
are leased by Nippon Express and Assured Logistics) comprise approximately 4.2 million square feet of
warehouse space. In addition, we currently lease six oÅ-site facilities totaling approximately 1.1 million
square feet of space, which support the storage and fulÑllment functions of our U.S. fulÑllment centers.
Our fulÑllment centers facilitate our ability to deliver merchandise to customers on a reliable and timely
basis. In addition, we fulÑll certain orders through outsourced fulÑllment providers.
Seasonality
Our business is generally aÅected by both seasonal Öuctuations in Internet usage (which generally
declines during summer months) and traditional retail seasonality. Traditional retail sales for most of our
products (including books, music, DVDs, videos, toys and electronics, among others) usually increase
signiÑcantly in the fourth calendar quarter of each year. Of particular note is the fourth quarter seasonal
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