Let’s be honest; Amazon is kind of a big deal. This online retailer was founded by Jeff Bezos in his garage in 1994, and this businessman just hoped to create a small online marketplace where people could buy and sell books. We probably don’t need to tell you that this company has since blown up to become one of the most impressive companies that this world has to offer and that Jeff Bezos is currently the richest person in the world!
One of the main reasons for that is because, in 2018 alone, Amazon racked up around $232 billion in retail commerce. Since working from the ground up, Jeff and his team have worked out what customers want, and they have tweaked the company to work around that. Today, the average Amazon customer spends around $600 on the site every single year, and the average Amazon Prime member spends a whopping $1,400 every single year. This is how Amazon gets you to part with your cash.
Knowing what you want
When you’re in the process of searching and buying products on Amazon, it’s hard to miss the other products that make your way on the screen. As you click on a certain item, you don’t have to look too far to see the “Frequently Bought Together” section, and even the “What Other Customers Have Bought After Viewing This Item” category.
These products aren’t just random products that Amazon really want to sell but are rather products bought by Amazon customers who have similar buying profiles to you. Because of this, they really want to entice your needs and keep on top of your personal buying trends. They want to provide you with options, so they collect your data and then personalize your page in an attempt to get you to buy a higher number of items.
As you make your way around the Amazon site, you’ll have to look pretty hard to find products that require a shipping fee. That’s because Amazon has been internationally recognized due to the fact that a huge portion of the products on their site can be shipped to you for free – and who wouldn’t want that? Postage fees can really bump up the price of a product, and many customers are put off other brands and retailers due to this extra cost.
The fact that Amazon offers free shipping is something that really makes it stand out from the crowd and something that keeps customers coming back for more. Of course, free shipping is mostly offered to those who are Amazon Prime members, but that doesn’t mean that regular customers who don’t pay this subscription fee can’t also make use of this free service.
Hands up if you’re an Amazon Prime member? Well, you’d be one of the 100 million Amazon Prime members across the world who pay the monthly subscription to reap the benefits of the Amazon brand. Costing $119 every single year, this service allows customers the chance to not only make use of their impressive streaming service but also their free shipping.
These Prime customers are spending more and more each year thanks to this free shipping, and it’s been suggested that the average Prime customer in 2018 spent an average of a whopping $1,400 because of it. Amazingly, that’s $100 more than in 2017. One of the main reasons why these Prime customers spend so much more than non-Prime members is because of its convenience. Once you get used to having products turn up at your door the next day for free, you get hooked.
Making customers eligible
Those who aren’t Amazon Prime members are often eligible for free shipping, but only if they manage to meet the requirements. Those who shop at Amazon on a regular basis but don’t have Prime may have noticed a little information box at the top of their basket when they’re in the process of buying their products. This information box will normally tell you how much more money you need to spend before you are eligible for free shipping.
Normally, the eligibility criteria suggests that customers need to spend a minimum of $25 before they can qualify for free delivery – and in the grand scheme of things, that isn’t a lot. Because the idea of free shipping is so desirable to people, customers normally add something else to their basket to bulk up the price, such as a pair of socks.
The Amazon world
Although most people know the story of Amazon, and how it was once a humble online book retailer, it’s clear to see that it has branched out into its own world. It has its own ecosystem, and it has so much to offer customers. The company is constantly trying to bring more and more customers into this ecosystem, and it’s their plan to get people signing on to various branches of their tree.
Yes, it’s so much more than just the online site, as Amazon also offers AI technology in the form of Alexa, and they even offer convenient reading in the form of their Kindles. Because of this, they will often offer their technology at a reduced price on their sites. Sure, customers could buy these products on other sites or even in tech stores, but why would you do that when you could buy them for a heavily reduced rate online? By getting more people on their sites, they are able to work their magic even more.
If you have ever looked at an item on Amazon, then gone away to think about whether you really want to buy it or not, you may have noticed that the price changes when you log back on. That’s not just your eyes deceiving you, because the prices of Amazon products are constantly fluctuating! Using technology that analyzes the prices of their competitors, Amazon are able to work out where they stand in the market, and they are able to adjust their prices accordingly.
In fact, their prices are changed around 2.5 million times a day – which means that each product price will change, on average, every ten minutes! They are constantly on the lookout to beat their competitors, and if they are constantly serving up cheaper products, then this gives people more incentive to make their way back to the site again and again.
Are you the kind of person that loves to impulsively buy new things for yourself? Well, even if you’re not personally the kind of person that does this, there are many people around the world who do – and Amazon has created a feature for these people. Rather than having to put a product in your shopping cart and then wait until you’ve searched the whole site for things that you want, 1-Click ordering bypasses all of that.
With one simple click of a button, you have automatically bought the item, and it will already be on its way to you. This means that you don’t have to mess around and wonder whether you want it or not, but can instead just go ahead and click the button without having to look at your basket, look at the overall price, and talk yourself out of the purchase. As more and more customers use 1-Click ordering, Amazon gets more and more sales.
While Amazon isn’t the most complicated of websites to traverse, there’s no doubt about the fact that you can’t make your way around the site without seeing numerous adverts for Amazon Prime. This is the case even if you are already a Prime customer. Those who aren’t already Prime customers are bombarded with these adverts – and it seems as though some people just can’t resist the 30-day free trial. People love to know that they are getting something for nothing, which is why this free trial works wonders.
While most people don’t need too much convincing after utilizing Prime for free for a month, there are others who decide to cancel. However, this isn’t easy. Amazon will always try and offer people new incentives when this trial is up, such as monthly payments or a new deal that would see them paying less. This reels people in and keeps them signed up.
Alongside the work they put into promoting Amazon Prime as a whole, the head honchos behind the Amazon brand also make sure that they promote Prime Day as much as they can. This shopping event in July each year first came about in 2015, and it has since become hugely popular, with people creating lists of things they want to buy on this day. Prime Day is all about cheap products that have their prices slashed by huge amounts so that customers can buy what would normally be fairly expensive products for a bargain price.
In 2019, Amazon saw their largest Prime Day to date, with people spending hundreds of dollars on things that they needed – and things that they didn’t need. Prime Day is often advertised as a day to treat yourself to the item you’ve wanted for a while, and who can say no when the prices are reduced so much? The cheaper things are, the more people buy.
While there are many people in this world who will never leave a physical book in favor of an electronic device, more and more people are turning their heads to Amazon’s Kindle. What’s so amazing about these customers is that they are invaluable to the company. That’s because they have found that Kindle users spend even more than the average Prime customer, spending an average of $1,450 every single year on various items.
This normally comes in the form of other eBooks, which can be bought through the devices and through the eShop. This is just another way for Amazon to get people onto their site and buying through them, as Kindle users don’t even have to log onto a computer to do their shopping. They can do it while they are in the midst of reading a good book, as well.
Fighting off competition
Although Amazon is the leading online retailer that this world has to offer, that doesn’t mean that it’s necessarily the best – and it seems as though they know that. More and more physical stores that have online branches are now offering similar deals just like Amazon, and this means that they are battling a huge amount of competition all the time. Amazon are constantly trying to better these companies, but it seems as though they don’t quite have the reputation that Amazon does.
While they put together all kinds of methods to make people spend more money, word of mouth also helps their sales. Their television commercials, their ease of access, and their general presence around the modern world keeps people talking about them, and they make sure that Amazon is the first company you think of when it comes to online shopping.
Because they have no much competition on their hands, Amazon are also constantly innovating new ideas and concepts that can keep them at the top of their game. At the moment, this is all about artificial intelligence and improved technology. They have numerous ideas being thought about right now, including cashier-free stores.
They want to create more Amazon Go convenience stores to allow people to head to the physical store without having to deal with lines or checkouts. There is already one store like it in Seattle, and it seems to be pretty popular. Alongside this, they are also in the process of creating an AI-powered home robot that will help you with all of your domestic needs, and they’re even looking to distribute fleets of delivery drones. Before too long, we could be seeing Amazon in our skies and around our homes more often.
In a world where fewer people are heading to a physical store, Amazon’s same-day delivery is a lifesaver for many. If customers know that they only have a small amount of shampoo and conditioner left, they don’t have to put on actual clothes and head to the store. Instead, they can utilize same-day delivery and just wait for it to turn up on their door instead.
This means that they don’t have to pay for gas, they don’t have to stop what they’re doing, and they can make the most of same-day delivery. By Amazon’s calculations, Prime members who make the most of same-day delivery or next-day delivery are more loyal than other customers. They are the ones who spend so much more, and they are the ones who will then put more items in their baskets.
Investing more money
Because Amazon has seen just how much people love same-day delivery, they aren’t afraid to spend more money on this service. In April 2019, Amazon confirmed that they would spend $800 in one quarter to make same-day delivery the new standard delivery time for all Prime members. Not only would this appeal to customers who were already members and making use of the next-day delivery, but it would also appeal to new customers who were debating signing up.
After all, we live in a world of convenience, and it seems as though people want to obtain instant gratification from their online purchases. If they know that they could buy something online and have it the same day rather than heading to the store and buying the same thing, there’s a high chance that they’re going to go for the first option. It’s just so much easier.
In fact, it seems as though Amazon envisages a world where their name and their products are everywhere. They are attempting to infiltrate various different aspects of our livelihoods, such as our home life and our grocery shopping, and they are looking to put Amazon into the mix. By doing this, customers and potential customers will find it impossible to ignore.
After all, if someone really needs milk, but the only shop near to them is a cashier-free Amazon-led store, they’re going to have to sign up. This means that more and more customers will be buying into the membership, or just buying their products from there more than any other online store or physical store. For some people, this is an exciting prospect. For others, it’s a little daunting.