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Understanding the e-commerce Payment Chain

6 E-Commerce Lessons Amazon Teaches Us All


6 E-Commerce Lessons Amazon Teaches Us All

When shoppers go online for purchases, odds are good that one of their browsing sessions will take them to Amazon. After all, the online giant is a one-stop shop for just about anything, and its Prime two-day shipping option means customers don’t have to wait long for their orders to arrive. It’s clear that Amazon is setting the pace for U.S. e-commerce; in fact, in 2018, it’s projected to account for 80% of the market’s expected growth.

But an extensive product selection and fast shipping are only two of the contributors to Amazon’s success. Let’s take a closer look at six ways Amazon is continually reinventing e-commerce.

Offer a Diverse Selection

When Amazon opened its virtual doors in 1995, it sold only books. And it did it exceedingly well, shipping to more than 40 countries in its first month. Today, Amazon is one of the world’s largest e-commerce companies and lets almost anyone set up an online storefront and sell just about anything (and everything).

More than 562 million products were available on the Amazon e-commerce platform as of January 2018, and the number grows daily. While the clothing, shoes and jewelry category boasts an impressive 166 million-plus items, even the smallest category — collectibles and fine art — offers an impressive 16 million products. Amazon even now provides IT support and furniture assembly, ensuring there’s something for everyone.

Work to Keep Product Reviews Honest

Every e-commerce merchant knows the importance of having good customer reviews. But merchants also need to ensure those reviews are genuine — and that’s a problem Amazon has been working hard to manage. There has been a significant increase in fraudulent reviews on the merchant’s site in recent years, with many products receiving an unusual number of 5-star reviews within days or even hours of being listed.

These fake reviews — which often sound more like product brochures or keyword-stuffed marketing material — end up increasing the visibility of these sometimes-questionable products in search results, often pushing them ahead of vendors who are garnering honest reviews.

Part of the issue is that before October 2016, Amazon had allowed reviews in which the reviewer received free or discounted products in exchange for reviews, as long as the reviewer disclosed this arrangement in their review. Such incentivized reviews have now been prohibited for most products, yet dishonest sellers are still finding ways to circumnavigate these new policies, like advertising free products on Facebook in exchange for favorable Amazon reviews.

Amazon continues to create and implement systems that will identify the fraudulent reviewers and has even brought lawsuits against more than 1,000 defendants for reviews abuse.

Amazon has also experienced its fair share of fake reviews that entertain more than they do persuade. Whether it’s a banana cutter or a t-shirt featuring three wolves howling at the moon, these products tend to be magnets for silly, but fake, reviews. But although these reviews weren’t designed to sway potential purchasers, they still bump the products ahead of competitors in search results.

Provide Recommendations

As shoppers browse items and add them to their cart, Amazon lets them know of related products that they might be interested in. So for customers thinking about buying a camera, Amazon might offer a bundled price for the camera, a protective carrying case and a memory card. Or it might show alternative products that other customers purchased instead of the item the customer is looking at.

Amazon customers will also see product recommendations on their home page, based on a complex algorithm of past purchases, items on their wish list and saved in their carts, and items they’ve previously purchased and reviewed.

This customized browsing experience — which customers experience from their first search to after they check out — reportedly drives 35% of Amazon’s sales.

Suggest Add-On Items

Amazon’s recommendations encourage additional purchases, but so do Amazon’s “add-on items” — small items that are too cost-prohibitive to ship on their own but can be added to an order totaling $25 or more. (Think of them as equivalent to the “impulse buy” items in the grocery store checkout lines.)

Eliminate Friction During Checkout

By letting customers check out with a single click, the Amazon e-commerce platform lets customers bypass the entire shopping cart process by using previously stored shipping and payment information. As a result, Amazon eliminates nearly all the friction associated with checkout, minimizes cart abandonment and improves conversion rates dramatically.

Until the patent on this technology expired in 2017, no other e-commerce businesses could use one-click checkout — unless they wanted pay Amazon licensing fees, like Apple did for iTunes and the App store.

Offer Fast, Free Shipping — and More

In today’s “gotta have it now” shopping era, Amazon Prime fits the bill: free two-day shipping for millions of products for a low annual fee. And not only are members willing to pay more for the faster shipping, but they also tend to spend more overall, too. An estimated 95 million individuals had Amazon Prime memberships as of June 2018 and spent an average of twice as much as non-Prime members.

And as more shoppers join Prime, more third-party sellers want to get their products in front of these customers who are spending more — and the increase in products available causes more shoppers to join Prime.

And those with Prime memberships get far more than just free shipping. Subscribers can benefit from Prime Now (which lets customers in certain areas have products delivered for free within two hours); free e-books from Amazon Books; and ad-free viewing of Twitch, a streaming video game channel. Amazon understands that the more benefits customers get from their Prime account, the more likely they’ll be to renew their memberships — and make more purchases.

How Will You Offer an Amazing Customer Service Experience?

When it comes to making a splash in the e-commerce scene, nobody does it better than Amazon. Whether they’re delivering new services or revamping old ones, Amazon has proven time and again that they won’t rest until they find a better way of serving their customers.

Luckily, Amazon hasn’t cornered the market on exceptional customer service. And there’s nothing stopping other e-commerce merchants from taking a page out of Amazon’s playbook for how to treat customers and provide the best possible shopping experience.

Another way to ensure you’re providing the best shopping experience is by ensuring you have a robust fraud prevention solution in place. Not only will it protect customers from card-not-present fraud, but it will also prevent expensive chargebacks and false declines from affecting your bottom line. If you’re not sure you have the right solution in place, download our free e-book, “Choose the Best Fraud Protection Solution for Your Business.” We’ll help you navigate your options and feel confident in the solution you choose.

ClearSale Fraud Protection Buyers Guide