The Power of Amazon: Four Ways the Online Retail Giant Dominates the Market
Chris | Monday 2nd February, 2015
Ecommerce is big business and across the globe retailers and service providers are going online in order to boost sales and expand their customer base. Forecasts for last year alone expected online sales to reach $1.5 trillion, an increase on the previous year of more than 20%. Standards for online retail continue to be set by the internet giant that is Amazon, itself responsible for more than $20.5 billion of revenue in Q3 2014 alone. Whether your business is new to online retail or whether you already have a well-established presence, it can only be beneficial to examine just what Amazon does and how it works.
Personalised Shopping Experiences
One area that Amazon has certainly got right is the creation of highly personalised shopping experiences. Every single time a customer clicks on an item in Amazon or views the homepage more than once, they are treated to a variety of lists of products deemed relevant to themselves based on their previous purchases and search history. A typical Amazon customer will be able to view products recommended to them based on their own history or examples of ‘frequently purchased together’ items based on other customers’ shopping habits. Through personalising the shopping experience and ensuring customers are guided to products that are actually relevant, Amazon maintains a high conversion rate. While not all businesses will have the time, money or space on their website to offer such a deeply personalised experience, something as simple as software that records and shows each site visitor their recently viewed products or recommendations beside each product for matching or relevant goods elsewhere on the site can work wonders.
Page Load Speed
One area Amazon has spent a lot of time analysing is the power of page speed. Analysis of ratio of sales to website performance showed that typically a 1% decrease in sales can be seen for every millisecond longer a page takes to load, equating to a 20% drop in sales for every 0.5 seconds. Usability experts suggest that ideally a web page should take no longer than 2 seconds to load. Websites featuring lots of unnecessary images or videos that significantly decrease page loading speed might want to rethink their website set-up.
It stands to reason that the faster and easier a customer is able to find the product they are looking for the more likely they are to buy it. The Amazon search bar quickly suggests popular products almost as soon as the customer begins typing. There are also added category suggestions to help narrow the search even further. Once a list of relevant products is displayed customers can choose to view that list in various different orders, from having the most relevant products at the top to the cheapest or most expensive, those with the best reviews and other options. Uploading software that makes helpful suggestions and drives consumers directly to product pages, even if it is far more simplified than on Amazon, can help improve conversion rates.
Buying online can make people nervous as they are unable to test the product before purchase. This makes them more reliant on the opinions of other customers who have previously purchased the product. Posting customer reviews on-site helps people to decide whether the product they are looking at is likely to be right for their needs and of the quality they expect. Clearly displayed reviews, even those that are not necessarily positive, help to build trust and promote products by boosting social proof. Amazon makes it fast and simple for customers to post reviews of their purchases on-site and also solicits reviews by email after products have been delivered. Other companies can utilise this technique quickly and easily by asking customers’ permission to retain their email address for further communication and promotion.
In addition to all of the above, Amazon rank very, very well across many thousands of product search terms, the success of which is discussed here by Matt Cutts of Google (it’s quite an old video but the content of this is still very relevant today):
Amazon obviously has a big marketing budget and is able to utilise many tools that are simply out of reach for smaller online businesses. However, it is entirely possible to take the ideas Amazon does best and adapt them to your own marketing strategy. Look out for free tools and third-party add-ons to make your website more accessible and more consumer-friendly in order to drive conversion rates.