How Amazon Gets You to Buy What you Dont Need
How Amazon Gets You
to Buy What you Dont Need
The secret to Amazon's sucess is multi-faceted, but undoubtedly how the online retailer uses an arsenal of creative approaches to turn shoppers
into buyers, buyers of one item into buyers of multiple items, and
first-time buyers into frequently returning customers - is a craft worthy of some study by other businesses. Overall their success is no accident, their website for starters is filled with psychological hacks designed to make you spend more ...
Strategic defaults
People are lazy, and Amazon knows it.
So what do they do? Turn subscriptions into the default:
Tracking what they save you
When we try to cancel our Prime subscriptions, Amazon displays the amount saved with its services. Hard to say no to xxx saved in delivery fees?
Spotlighted savings
Even before Amazon displays the price they show us what we can save in an enlarged and bright red font - and who doesn't like a good bargain?
Strikethrough higher prices
After looking at the $97.48, the new, lower price seems like a winner. But if I worked at Amazon, I would: • increase the font of the original price • place it right above the new price Intensifying the anchoring effect.
The visually empty carts
People have a tendency to fill containers to their full capacity because of everyday experience. The same happens with Amazon's carts. The empty space below that book compels people to fill it up!
Smaller fonts
When prices are visually smaller, we mistake them for smaller purchases.
Now you'll notice how small Amazon sizes its prices on the purchase page:
The red color
Red fonts trigger action.
Especially against a predominantly white background, like that of Amazon:
Price convergence
Amazon smartly places unrelated lower prices and terms like "Free" right below the selling price. The result? We converge these desirable terms with the actual price. Making it look like another good deal:
Negative reviews
Somewhat counterintuitive, but Amazon includes top critical reviews on its customer reviews page. But that's actually a neat sales tactic: • their content seems more credible • the power of contrast makes the positive reviews look even stronger
Horizontal vs. vertical assortment
Horizontal assortment highlights variety and is best for skimmers, but it backfires when people are looking for a specific product and Amazon seems to apply this:
Data Psychology
Amazon uses some of the most advanced technology out there - and what you see is but a fragment of the technology. Did you know that is uses a highly sophisticated algorithm to recommend the right products to the right customers, at just the right times too! Every time you visit Amazon, it utilises and analyses behaviour data from each customer, and takes that information to recommend products to other shoppers with similar profiles. According to Vadim Bichutskiy, former director of data science at Innovizo, Amazon has pioneered a data-driven strategy for cross-selling and upselling.
Another psychological 'value trigger' is the convenience of '1-Click Ordering'. Amazon actually owned the patent for 1-Click ordering until 2017, when it expired, but the service has generated billions in revenue. Once customers store their credit card and shipping information on the servers, they can simply click once to place orders without going through the checkout process. This frictionless ordering system is another way in which Amazon disconnects customers from how much they are actually spending and encourages impulse buying.
Free shipping.
Amazon pioneered a change in the approach online retailers make in charging people for shipping. Nowadays unless it involves something particularly bulky, or sending it overseas, the days of charging people for shipping are essentially over. This affected how even eBay showed its lowest price slot, and other online marketplaces by cutting the prices of items but then making it up with high charges for shipping and "handling." (Definitely don't ever charge people for the effort of handling an item they're paying you for. There's no clearer way to tell customers that you consider them a nuisance.)
However, free shipping actually isn’t free for Amazon, and the company has to
make up its losses somehow. The goal of the free shipping offers is to
incentivise customers to pay extra for Prime Memberships (see next item) or get them to
increase the number of items in their shopping carts to hit the minimum. And the
strategy works !
Rewarding Loyalty
Prime is Amazon's customer loyalty program. It was originally designed to get shoppers to spend more. Members can take advantage of incentives such as free expedited shipping, same-day delivery in certain areas, unlimited video and music streaming, early access to lightning deals, access to the Kindle Owners’ Lending Library and discounts on one of products buys (and even more on regular subscription buys) as well as wholesale and many other convenience products and 'services'.
Once paid for many Amazon Prime members infact stop shopping at other stores in order to take advantage of all the benefits. According to RepricerExpress Prime members tend to spend $1,000 or more per year compared to non Prime shoppers, who send between $100 and $500 per year.
It may surprise you to learn that this program isn’t a direct money-maker for Amazon - Prime has become a tool for acquiring new customers and
building loyalty, so the company can generate more return in other
ways, such as premium audio and video streaming and cross-selling, according to Fortune Magazine - for example :
- Prime members who use the free video streaming service are more likely to rent or buy movies from Prime Video as non-Prime member
- Amazon Echo, their proprietary AI wireless, voice-operated speaker is always ready to listen and can play music and games, set alarms, and look up facts online - but Amazon Echo also allows customers to purchase items from Amazon without the need for a computer, and with the friendly persona named 'Alexa' you feel less like you’re interacting with a company and more like you’re shopping with a friend.
- Prime Now is the latest addition to Amazon’s quick delivery options- and cites that items (such as groceries, household items and office supplies) can be delivered to your door in two hours or less. This service is free for Prime
members only - currently it is limited to certain cities but more towns and postal codes are quickly coming on board. The company's investment in faster delivery services - and using electric vehicles to fulfill deliveries (to increase the perception of green credentials / caring) has paid off, Amazon continues to open more small
warehouses in suburban areas across many countries to fulfill this service, and create more jobs.
Time-limited Offers
Amazon utilises a variety of highly successful different ploys of reeling customers in with time-limited sales. While time-limited sales are used extensively in marketing, Amazon's offerings stand out because they make them seem more fun ...
- Amazon Prime Day, initially a 24-hour event where Prime members get access to thousands of items at special prices - but this often extends in duration!
- Amazon’s Lightning Deals can be found throughout the website and on the
Gold Box page.
- Finally, in Seattle, there is the "Treasure Truck," which offers special deals on just one item and travels around the area, announcing its location in advance so customers can find the truck and pick up the item after first buying it from the Amazon shopping app. This approach lets Amazon make quick sales of perishable items, such meat or fish!
Letting You Sell Your Things.
It’s now so easy and convenient to order through Amazon that most cusumers don’t feel the need to find out where their product is actually coming from - and one of the smartest decisions was for them to create the Amazon Marketplace, allowing anyone to sell via its website site. Plus instead of housing products in expensive warehouses and losing money on free shipping, Amazon’s Marketplace allows smaller businesses to sell to millions of shoppers under the Amazon umbrella.That's created huge revenues for Amazon and allowed the company to steal a lot of business from eBay, its biggest competitor as an online everything store.
Meanwhile, Amazon just sits back, relaxes and collects your money.
How Can a Small Business Compete ?
In short - it cant! But you don't have to be a giant company to take advantage of some of their strategies. If you have a physical retail store, invite maybe some local artisans or craft makers to sell a few items by your checkout counter or local artists to hang their work for sale on your walls, or local performers to hold events in your space.
If you have a
website, look for affiliate marketing programs with products that you
can endorse and complement the product of servie that your customer is getting from you. Either way, you're
creating an income stream that costs you nothing or next to nothing in
time and effort. And you're giving your customers more choices at the
same time.
If you would like to discover more about how implementing psychology of marketing into your brand campaigns - contact web-aviso today to discover how they can help transform your business presence:
📞 01704 834099
📞 07767 343152
✉️ marketing@web-aviso.com
🌐 https://www.web-aviso.com
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