How Did Amazon Use KPI to Harness Data for Its Growth?

1. Presentation of Amazon as a company

Founded in 1994 by Jeff Bezos, Amazon is an American e-commerce company that started as a simple online bookstore. Today, it has become one of the largest online retailers in the world, offering a wide range of products from books to electronics, clothing, and groceries.

2. Challenges in the online retail sector

In the online retail sector, Key Performance Indicators (KPIs) play a crucial role in measuring the effectiveness of company activities. KPIs are used to track the performance of key processes, identify areas for improvement, and evaluate the impact of actions taken to enhance performance.

Amazon's Objectives

Amazon's strategic objectives Amazon has several strategic objectives, including:

What DATA challenges can hamper the use of KPIs?

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KPIs Used by Amazon

At Amazon, effective data management is essential to measure and improve the company's performance. They have implemented several KPIs to track data quality and utilization, as well as evaluate the performance of data teams.

KPIs Used by Amazon

At Amazon, effective data management is essential to measure and improve the company's performance. They have implemented several KPIs to track data quality and utilization, as well as evaluate the performance of data teams.


Amazon teams measure the time, costs and errors associated with data collection, cleansing, transformation and storage processes. Using advanced technologies such as machine learning and task automation, Amazon has managed to reduce data management costs by 15% year-on-year.

KPIs for measuring overall company performance To measure its performance as a company, Amazon uses several KPIs. The first is revenue, which measures the total amount of sales over a given period. Another KPI used by Amazon is net profit, which measures the profit earned after deducting all expenses. In 2020, Amazon's net profit amounted to $21.3 billion, representing an 84% increase compared to the previous year. Amazon also measures the number of active customers, which is the total number of customers who made a purchase in the past twelve months. In 2020, Amazon had 200 million active customers worldwide.

KPIs for measuring departmental performance (sales, marketing, logistics, etc.) Each department at Amazon has its own set of KPIs to measure performance. For example, the sales department uses the conversion rate to measure the percentage of visitors who make a purchase on the website. In 2020, Amazon's conversion rate was 15.8%, representing a 0.5 percentage point increase from the previous year. The marketing department uses the customer acquisition cost (CAC) to measure the average cost required to acquire a new customer. In 2020, Amazon's CAC was $48, representing a 13% decrease compared to the previous year. The logistics department uses the on-time delivery rate to measure the percentage of orders delivered within the specified timeframe. In 2020, Amazon's on-time delivery rate was 98.6%.

KPIs for measuring the performance of Amazon's different websites worldwide Amazon also measures the performance of its various websites worldwide using KPIs such as sales growth rate, average order value, return rate, and cart abandonment rate. For example, in Europe, Amazon's sales growth rate was 38% in 2020, with an average order value of 39 euros. The return rate was 6%, while the cart abandonment rate stood at 75%.

The use of KPIs allowed Amazon to closely monitor its performance and quickly identify areas for improvement in order to achieve its strategic objectives. For instance, one of Amazon's goals is to maintain strong sales growth. Through its KPI tracking approach, Amazon was able to take actions to enhance its customer experience and increase sales.

In 2020, Amazon's annual revenue reached $386 billion, representing a 38% increase compared to the previous year.

By identifying key performance indicators, Amazon can track the progress of its objectives in real-time and swiftly detect areas for improvement.

KPIs also enable performance measurement at different levels of the company, from overall company performance to individual departments.

Although the use of KPIs is beneficial for Amazon, the company faces several challenges in their implementation.

One of the main challenges is defining relevant KPIs to measure company performance, which can be complex.

Amazon must choose KPIs that are relevant to its strategic objectives while also being measurable and trackable in real-time.

Another challenge is collecting accurate data to fuel the KPIs. Amazon needs to ensure that data is qualified and up-to-date to ensure that the KPIs accurately reflect the company's performance. Finally, the company must be able to cope with the increasing complexity of data and the analytical tools required to optimize its decision-making process.

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