10 Lessons Retailers Can Learn From Amazon's Playbook

While ecommerce is seemingly alive and well, growing at 20% annually according to eMarketer, today’s retailers still have one giant obstacle in common: Amazon. As the world’s largest online retailer, Amazon is projected to have an ecommerce market share of nearly 21% by 2016 according to Morgan Stanley.

In the race to win consumers’ dollars, there are many valuable lessons to be learned from this single dominant company’s playbook. Here are 10 of them:

1. Deliver recommendations after checkout, not during.

When consumers are ready to make purchases, they’re in a “buy now” state of mind. Anything that distracts this mentality poses the risk that consumers won’t return to convert. Amazon understands this concept well, choosing to first take the guaranteed sale and then up-sell customers after those purchases have been made.

2. Create urgency via out-of-stock-soon notifications.



Every organization wants to have enough inventory to satisfy demand. Amazon takes this concept a step further by proactively providing consumers with friendly notices that stock is low, which creates a sense of urgency while suggesting popularity and further incentivizing purchase conversions.

3. Leverage sessions and authentication.

A lesser-known fact about Amazon is that it uses two authentication layers. The first keeps customers signed in at all times to ensure they receive personalized recommendations upon each visit. The second requires password authentication at checkout, providing the benefit of a tailored shopping experience while still enforcing security at the time of purchase.

4. Use a data-driven approach that works.

In the algorithmic arms race, marketers are constantly on the lookout for the latest and greatest code that’s capable of providing them with valuable data. However, when it comes to driving sales, a tried-and-true way of impacting the bottom line is Amazon’s “Also Viewed/Also Bought” feature, which simply recommends items to consumers that they’re more likely to purchase.

5. Make search visual.

Consumers can’t buy what they don’t know exists. More than half of the time they spend on retailers’ websites is devoted to searching and browsing, according to RealDecoy. Take note from Amazon and visualize the search experience with images and prices to make buying a breeze.

6. Think beyond the product.

Relying on browsing behavior and purchase history to understand (and predict) customers’ interests and wants is only part of the puzzle. It actually does a disservice to retailers during the holiday season when online shopping surges are fueled largely by consumers buying for other people. Recommendation algorithms should factor in elements that Amazon accounts for, like seasons, weather and location.

7. Emphasize what matters most

Even if you’re not a giant online retailer, you can still improve the precision of your targeting efforts by enhancing recommendations with Amazon-like data points such as previously viewed items, favorite colors, preferred sizes, purchase history, average purchase frequency, average order value and date ranges.

8. Turn valuable experiences into tailored ones.

Cost-saving experiences deliver quantified benefits to customers, but forward-thinking retailers like Amazon are moving beyond price-based merchandising strategies in favor of demonstrating personalized knowledge of customers. Highlight products that complement past purchases for a customized feel.

9. Send more compelling emails.

Instead of pre-populating emails that are sent to consumers with mundane content, more effective messages from the likes of Amazon contain creative that’s personalized upon opening in order to reflect the items of greatest timeliness and relevance. 

10. Measure twice, cut once.

It’s important to embrace experimentation. After all, willingness to invent is what drives leading retailers like Amazon forward. But when new ideas arise, it’s also critical to determine if they’re measurable. Being able to directly link marketing efforts to sales will empower marketers to justify strategies and command larger budgets.

Much value can be found in analyzing why Amazon is so successful. There are basic fundamentals at play that have not only laid a sound groundwork for success, but that are also directly relevant for any other retailer to benefit from. By borrowing a page (or two) from Amazon’s playbook, other players can up their games and put more points on the board.

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