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Published On: Sat, Nov 23rd, 2019

The Amazon Way: Tips Startups Can Learn From The Brand

Over the past 25 years, Amazon has not only revolutionized how ecommerce should be done, but how business could be done. Their core value of “customer obsession” has allowed them to evolve from what was basically an online bookstore in 1994, to the massive empire they are today – one that earned $232 billion in net sales last year according to statista. 

This article discusses what the company has done to be at the forefront of the best online shopping experiences, its knack for anticipating customers’ needs, and how eCommerce startups can apply the same principles to boost their eCommerce endeavors.

Amazon 2019 by the Numbers

As alluded to above, Amazon has grown exponentially in scope, scale, and reach over the past two decades. Today, its offerings include online retail, computing services, consumer electronics, digital content, along with other local services like daily deals and groceries. This innovative approach has made them the most valuable brand in the world as of 2019 with an estimated value of $188 billion, besting other titans like Apple, Google, Samsung, and Facebook.  

Other Amazon Facts and Stats

  • In October 2018, 139.92 million mobile users accessed the Amazon app. By comparison, Walmart has a monthly mobile audience of 74.74 million users. (Statista)
  • The average annual shopping expenditure of Amazon Prime members is $1,400, while non-members spent $600. To put that in perspective, there are 95 million Amazon Prime members in the US. (Big Commerce)
  • Its virtual assistant Alexa has also grown its catalogue of skills – from just 130 when it was released in 2016, to over 100,000 as of September 2019. (Voicebot.ai) This growth has also led to their smart speakers – Amazon Echo and Echo Dot – claiming smart speaker market leadership, with an install base share of 21 percent each.  

photo/ kirstyfields

Below are the tips you can apply to your startup business like Amazon did:

#1. Proactively Address Pain Points

This goes back to Amazon’s core value of customer obsession. This is also why it seems like every week you see a story about the company looking to launch a new service, product, or feature. Amazon doesn’t so much as innovate, as much as they transform their business to match what their customers want – and quickly. 

For example, when it comes to ecommerce, common pain points are:

  • Shipping costs – the top cause of cart abandonment.
  • Slow shipping times – can hinder or outright prevent a purchase. 
  • Complicated checkout process – particularly those that add friction by requiring shoppers to create an account before they can make a purchase.

Amazon quickly addressed the first two with free two-day shipping for all Prime members, while also incentivizing them with features like free music and movies. 

While smaller companies may not have the resources to offer similar perks, you can at least reduce those pain points by:

  • Offering free shipping for orders over a certain amount.
  • Flat rate for shipping that’s already shown wherever the product is advertised (Facebook ads, Instagram ads, product page, site home page, etc.).
  • Promising orders set by a certain time will arrive at a specific date.

These are just examples when it comes to shipping. There are a number of ways to get creative with solutions, you just need to be proactive with it. 

#2. Personalize User Experience

When a customer who’s logged in opens Amazon, what they see is a homepage that’s unique to their preferences, past purchases, and browsing history. While not everyone can have access to the vast amounts of data that Amazon has, there are affordable personalization software you can invest in. This allows you to offer similarly personalized landing pages depending on users’ past behavior. 

And if that’s beyond your budget, you can personalize emails instead based on the info provided and past opens, or deliver targeted ads to site visitors.

#3. Anticipate Customer Needs

While this may sound like the first tip, it goes beyond proactively addressing pain points and into having the discipline to analyze customer data. This was what Amazon leveraged when they applied for and was granted a patent for what it calls “system for anticipatory packaging.” This is part of their plans to start delivering packaged before customers even think about adding to cart. 

Again, smaller companies may not have an ocean of data Amazon has, but almost everyone has data to work with. Even if you have just 1,000 customers, every interaction they have with you leaves data that you can utilize to anticipate their needs. And it doesn’t always require an established data team to decipher it as even things like reviews and comments can be found on the social media—if you just look for it. 

#4. Borrow from the Wisdom of Fulfillment by Amazon

 

Essentially, Fulfillment by Amazon Onsight allows them to ship directly from their merchants’ warehouses, making shipping times faster without adding extra operational costs to their own warehouses. You might ask why merchants are allowing Amazon to do this – and that’s because they’re being enticed with lower delivery costs, logistics software, and warehouse inspection.

Much like access to data, not everyone has the network Amazon does. But it doesn’t mean you’re short of options. And it starts with a mindset shift. Instead of thinking of free shipping as an added cost (where you lose money every time), you can think of it as a competitive advantage. And if you remember the stat above, Prime members spend double than that of non-members, which means Amazon still wins despite the added costs. 

Some of your options include:

  • If you have high-volume orders that you want to get out the door quickly, you can utilize zone skipping.
  • Advanced Date Shopping to take advantage of seasonal carrier offers, especially helpful during peak season. 
  • To speed up delivery, consider adding last mile carriers to your network. 

Again, there are a bevy of options available. And you’ll be able to find them if you put yourself in your customers’ shoes. 

#5. Mirror Amazon’s Upsell Strategy

Neil Patel defines upselling as how retailers persuade customers to spend more money on products/services that complement the primary product the customer is already buying. When Amazon introduced the concept back in 2006, they saw sales increase by 35% (Conversion XL).

In the same vein, there’s also pre-selling and cross-selling, which is basically bundling products at a reduced price.  

 It’s human nature to want to get a good deal, here are some tips on how to go about it:

  • Deliver relevant messages – In the example pictured above, presenting closely related products encourages them to act without a hard sell. 
  • Create scarcity – Telling customers that there’s only a few items left is a powerful persuasion tool. 
  • Increased perceived value – In the Canon PowerShot example above, Amazon shows the price for all three products, which gives the notion that customers are saving money, even when they’re not.  

Again, there are a number of ways to get creative with upselling, it’s up to you to find out what works best with your customers. 

#6. Make it Easy to Post User Reviews

Users trust their peers more than even the most trustworthy brands. Need proof, chew on these numbers (BrightLocal):

  • 86% of consumers read reviews for local businesses
  • Consumers read an average of 10 online reviews before feeling like they can trust a local business
  • 91% of 18-34-year-old consumers trust online reviews as much as personal recommendations
  • 89% of consumers read businesses’ responses to reviews 

Just as Amazon does, make it easy for your customers to provide reviews. This allows other people to learn more about the products before they buy. 

Apart from having product information generated by their peers, making reviews available provides a platform for users to communicate with each other. By showing you have nothing to hide, your make it easier for your customers to trust you. 

#7. Keep Experimenting and Testing

There’s a reason why Amazon continues to come up with the most innovative products and services – and that’s because they never stop searching for better solutions. Jeff Bezos said it best: “If you double the number of experiments you do per year, you’re going to double your inventiveness.”

With consumer behavior and available tech constantly changing, even the best eCommerce sites are never finished products. Test your site regularly, for both usability and performance. In doing so, maybe you’ll find that developing an app will rake in more sales.   

#8. Be Patient

It took seven years after Amazon was incorporated before it turned its first profit, proving that patience is indeed a virtue—and one that massively pays off. 

Bezos says it best: “We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.” This customer-centric approach has allowed them to nurture long-lasting relationships with their customers and merchants, while also providing them with feedback to be innovative. 

Takeaway

There are many tactics and technical strategies to be gleaned if you analyze everything Amazon does. But if there’s one thing every business should pick up, it’s to put customers at the forefront of everything you do. Not only will you be able to address their pain points with better solutions, you’ll see opportunities to innovate as well. 

What’s your favorite Amazon service/feature? Sound off in the comments section.

Author: Aaron Chichioco

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