This is the beginning of a series of articles looking at what makes Amazon so successful and what you can learn from their experience to increase sales on your eCommerce site.
Starting out in 1994 as an online bookshop, Amazon’s management listened to shoppers and studied the market to shape how the business would move forward. Over time they added additional products and services to their offerings to become and remain the top-selling eCommerce site for U.S. and European shoppers. (Alibaba, the company that owns AliExpress, still dominates in China and therefore leads in worldwide sales.)
Amazon’s dominance in eCommerce since the early days has influenced the way we shop online and how online shoppers think online shopping should be. In fact, the majority of Amazon users start their research for products on Amazon itself, making Amazon.com by far the most visited online retail site worldwide.
Most Popular Online Retail Websites Worldwide in March 2020 by unique visitors (in millions)
Amazon even beats Google, Bing, and all other search engines combined when their users are researching products online.
Most Important Platforms When First Researching Products Online According to Amazon Users in the United States as of February 2019
So what brings shoppers to Amazon again and again?
Reasons for internet users in the United States to shop on Amazon as of January 2020
Looking at the reasons shoppers choose Amazon, you can see strategies that other, even much smaller businesses, can use to their advantage.
Which of these strategies can you apply to your business as well as or better than Amazon?
- Fast free shipping 79.8%
Amazon offers two-day free shipping to its Prime members, but this only applies to some 3rd party Amazon Marketplace purchases.
- Broad selection – they sell everything I need 68.9%
Amazon has broadened its offerings through the acquisition of certain other businesses, like Whole Foods for groceries, but also through third-party Marketplace vendors. Though a common complaint is that they don’t have more unique, custom items (see below).
- I am a Prime member 65.7%
Prime is a hugely successful membership model that not only gives members access to two-day free shipping and occasional deals but also media streaming services. This also makes members more likely to shop Amazon first and frequently.
Number of Prime Users in the United States
from 2018 to 2022 (estimated)
- Best pricing 49.2%
While only the fourth reason on this list, given by only half of the respondents, this is the reason I hear most.
- Easy returns process 43.7%
Amazon was one of the first to include postage-paid return labels with orders and made the packaging easy to use for returns. Again, this isn’t available for all third party Amazon Marketplace vendors.
- Best digital shopping experience 42%
As I noted above, Amazon has studied how users behave on their website and apps, finetuning to provide an experience that is most likely to result in a sale.
- Product reviews and recommendations 40.5%
With such a large pool of users, Amazon has compiled one of the largest collections of reviews and recommendations for specific products. While users need to be careful of those reviews that are “bought” or submitted by sellers themselves, a savvy shopper can avoid a lot of bad purchases this way.
Amazon also provides users with recommended bundles and products based on other users’ similar purchases, which is useful for the user but also increases sales.
On the lower end of the customer satisfaction scale, areas that other eCommerce sites can win over customers:
- Unique items I can’t find elsewhere (handcrafted, vintage, custom) 22.3%
This is one of the common reasons to NOT shop via Amazon. Etsy used to be a good alternative for those looking for handmade and more unique items, but this has declined since Etsy now offers many less than unique products sold by third parties that also sell on Amazon.
- Proactive communication during delivery 17.8%
While a user can track a package’s delivery status on the website, many find that the system is not efficient enough and that customer service is not helpful enough. One particular issue is that often the estimated delivery date is pushed back after a purchase has been made and fulfillment has been started, to the annoyance of the customer and can lead to cancellation of an order.
Over the past two decades, while still consistently growing its market share, there have been regular periods where customer satisfaction with Amazon dipped dramatically.
U.S. Customer Satisfaction with Amazon.com from 2000 to 2019
Since March 2020, during the height of the effect of the pandemic so far, there were many reports of shoppers becoming disillusioned with Amazon citing:
- Lack of availability of products, including essential products, that were readily available before.
- Delays in the delivery of non-essential products.
- Poor communication on the status of orders.
According to The New York Times, “By March 17, Amazon had suspended shipments to its warehouses of items that were not in ‘‘high demand,’’ scrambling, and often failing, to keep up with orders for soap, sanitizers and face masks, as well as a wide range of household staples, including food. By then, customers looking for these items were, for the first time, experiencing an Amazon that was conspicuously broken. Empty shelves in a supermarket are self-explanatory. But on Amazon, customers were confronted with failures that were much weirder and harder to understand, with, of course, nobody around to explain them.”
And there were other issues troubling some shoppers:
- Concern over the treatment of staff as prominently reported in the media.
Check out this Business Insider article: The disturbing accounts of Amazon delivery drivers may reveal the true human cost of ‘free’ shipping
- Desire to support local businesses.
This reason is likely to increase during and after the pandemic, with shopper’s increased desire to visit physical shops and support local businesses that suffered during required closures.
Even before these issues came about because of the pandemic, there are significant numbers of shoppers that will never or rarely shop via Amazon.
Some of the characteristics of shoppers that do not or rarely shop with Amazon:
- Desire more interaction, advice, assistance from staff.
- Prefer the option to pick-up purchases in-store or curbside.
- Distrust of third party Amazon marketplace vendors that can dominate product searches.
- Distrust of Amazon itself as a business that dominates the market globally.
- Loyalty to brands that have their own online shop or loyalty to other online shopping portals.
- Don’t care about Amazon Prime for free two-day shipping or streaming entertainment.
- Averse to shopping online, 39% of Americans don’t shop online at all!
Looking at the reason why shoppers are so dedicated to Amazon, as well as why others avoid the platform, which strategies can you apply effectively to your own business, whether you are just starting to add online selling to your existing retail business or are looking to increase sales on your eCommerce site?
Additional reading: ECommerce Conversion Optimization – Get More Sales from Your Online Shop