Amazon Marketing Strategy: 5 Ways to Increase Order Rate!

Amazon is one of the top five technology companies in the world, with huge economies of scale and the ability to acquire retailers in various industries, more than 300 million users and 2 billion products. On February 1, 2018, Amazon announced its fourth-quarter results, with net profit increasing 30% to $1.9 billion.

The e-commerce giant reported a period of strong growth over the past few years, driven by its e-commerce business and Amazon Web Services.

Nearly a million new merchants join Amazon every year. If you are currently selling products on Amazon or intend to sell them in the future, you need to fully understand every possible angle to gain a sales advantage.

That’s why in this article we’ve covered 5 marketing strategies for Amazon product pages to increase order rates. Part of the reason Amazon’s product pages are so effective is that they use these 5 product page conversion elements to convert people from product viewers to product buyers.

From today you can understand and apply them to become a sales genius.

For example, here’s what the product page for a keychain looks like on Amazon:

Keychain product page

1. Social Recognition

Consumers are influenced by others far more than they realize. According to the Wall Street Journal , social identity can influence consumer behavior and even personal interests, including personal taste in music. This is why the concept of social proof is so powerful.

In scientific terms, social proof is described as a psychological phenomenon where people follow the actions of others to reflect what is the right thing to do in a given situation, including an online one. Simply put, social proof influences people's decisions.

We traditionally look to a variety of useful and trusted sources for social proof, such as reliable experts, thought leaders, celebrities, friends, and the wisdom of the crowd.

But today’s diners rarely go to a restaurant without first checking Dianping.com, and shoppers rarely make a purchase without first reading reviews from buyers. When customers read reviews on websites such as Dianping, Meituan Waimai , Taobao , and Xiaohongshu , they will determine the quality of products and services based on the star rating and purchase the items they need.

According to a Nielsen survey, 92% of people would trust a recommendation from a friend, and 70% would trust a recommendation from someone they don’t even know.

At the same time, according to a YouGov survey, 78% of American consumers read reviews before making a purchase decision, and 87% of consumers trust online reviews as much as they trust friends and family. On the other hand, 80% of consumers will give up purchasing due to negative reviews. Predictably, online reviews have become one of the most powerful forms of social proof.

Keychain star ratings and customer reviews

There’s a reason Amazon puts social proof front and center. When consumers shop on Amazon, after searching and clicking on the product page they need, they may first look at the reviews.

Before considering factors such as price or demand, customers will prioritize other consumers' experience and see how many people like or dislike the product.

If they see that other people have rated a product highly, they are more likely to click and buy it. On the other hand, if the star rating is low, consumers may close the product page and choose products from other merchants.

So you can do the same design on your product pages by adding:

• Star-based reviews
• Text Comments
• Customer feedback and product testimonials

2. Cognitive Value Pricing

The average consumer might think that Amazon's online sales prices are the lowest in the world, but that's not always true. In fact, Amazon exploits the psychology of price perception and adjusts prices multiple times per hour (equating to millions of product price changes per day). As consumers, we just can’t help but want to buy discounted products.

Perceived Value Pricing

However, it doesn’t matter whether they are actually on sale (or Amazon says they are on sale). We can’t help but be drawn to discounts. Note carefully how Amazon does this (it probably involves more steps than you think):

• Step 1: Delete the “original” price ($17.99)
• Step 2: Identify the “discounted price” ($8.99)
• Step 3: Highlight free shipping on orders over $25
• Step 4: Remind the customer again of the dollar amount ($9.00) and percentage saved (50%)

Do the same on your product pages, use the product’s “perceived value” as the “price” and follow Amazon’s four-step pricing method.

But now, Amazon is very careful about marking the "original price." Amazon used to also mark the initial list price. However, after Amazon and other retailers faced a series of "fake discount lawsuits," Amazon began to completely stop using the original list price.

Now, if they use this “perceived value” pricing, their “original price” is what the item sells for on Amazon.

It’s important to remember that Amazon is always testing and trying new things. Therefore, they constantly change prices and the way prices are presented to test the most effective way to achieve the most sales.

For example, the one above is a screenshot from a few weeks ago. However, when I go back to the product page, I can see that they are now just presenting the price as a single number with no additional information.

Single-digit pricing

Amazon also has a complex dynamic pricing strategy , and its prices fluctuate frequently. This is done to ensure that customers see Amazon as the most affordable platform to buy from. Amazon has employed a clever strategy to achieve this goal, undercutting its competitors.

At the same time, Amazon also allows merchants to dynamically set the pricing range of products in the backend system. Different prices will be displayed for different consumers, which is what is known in China as " big data killing the familiar."

Boomerang Commerce is a dynamic pricing company founded by former Amazon employee Hariharan. According to the company's analysis , Amazon offered the biggest discounts on the most popular products, while reaping the profits on less popular items. They achieve this by undercutting competitors like Walmart by offering deep discounts on the products that users browse the most (i.e., the most popular products and the products with the most reviews). They then adjust the prices of products that are not in high demand to normal or higher than their competitors.

The report states:

“Amazon may not be the lowest-priced seller on a particular product in any given season, but its consistently low prices on the most viewed and best-selling items give consumers the perception that Amazon has the best prices overall — even better than Walmart.”

Walmart vs Amazon comparison of popular routers

Walmart vs. Amazon for unpopular routers

Hariharan gave an example where Amazon priced its best-selling router 20% lower than Walmart, but priced less popular routers 29% higher.

All in all, this dynamic pricing strategy helps Amazon’s discounts be just right. Convince customers that Amazon is always the cheapest option without cutting into their own profit margins.

3. Scarcity and urgency

Only 12 left in stock – hurry before it's too late

One of Amazon's most direct and effective marketing strategies is to use scarcity to inform consumers that only a few items are left in stock : Only 12 left in stock - hurry before you buy. Scarcity is about using the shortage of a product to increase sales. Amazon tells customers when its products are “in stock” and when they will soon sell out.

By letting consumers know that product supply is limited, Amazon instills a sense of “fear of missing out” in users, increases consumers’ perceived value of the product, and provides them with a reason to accelerate their purchasing decisions.

Not only does scarcity compel buyers to order before stock runs out, it also leads consumers to believe that the product is popular or frequently purchased (thus further driving social proof).

Similarly, Amazon uses keywords such as “Get it tomorrow?” and “Order in 5 hours and 2 minutes with 1-day shipping.” Making consumers feel that if they want to purchase a certain product, they must act immediately creates a sense of urgency.

Amazon then uses a sense of urgency to tell consumers that if they want the product to arrive by a certain date, they must order it within a certain time frame (“3 hours and 19 minutes”). This greatly increases the chances of people buying on Amazon instead of other purchasing platforms, because if they buy it quickly within a certain period of time, they can get the guarantee of tomorrow's arrival.

Amazon does not use false scarcity. It tells the customer whether there will be more orders in the future. This makes the messaging more credible.

4. One-click purchase button

One-click buy button

In order to prevent users from abandoning the items in their shopping carts, Amazon has specially established a shopping system that allows consumers to purchase the products they need with just one click (after entering and saving the checkout, they only need to pay and fill in the shipping information once).

As a result of this innovation, Amazon has achieved extremely high conversion rates from existing customers. Because the customer's payment and shipping information is already stored on Amazon's servers. The entire shopping process is therefore very convenient and fast (only “one click” required), so customers do not have time to reconsider their purchase behavior.

As online shopping on mobile devices becomes more common, one-click shopping becomes more important. Because the mobile screen is small, the more clicks there are when making a purchase, the lower the mobile user's propensity to buy. The advantage of Amazon's one-click shopping is that it eliminates the need to fill in consumer and credit card information, greatly facilitating the shopping process for customers and increasing purchase conversion rates.

Amazon patented the technology in 1999, which has brought it tens of billions of dollars in revenue. Amazon's one-click purchasing patented technology was eventually licensed to other e-commerce retailers, especially Apple.

Apple believes that a convenient and fast shopping process is extremely important. It integrated the technology into iTunes, iPhoto and the Apple App Store . How many times have you impulse bought a song on iTunes or downloaded a new iPhone app without giving it a second thought?

On September 12, 2017, Amazon’s “one-click shopping” patent expired, marking the end of an era. Consumers enter their billing, shipping and payment information once and click a button to purchase future items. This idea was unheard of when Amazon first obtained the patent, and it also represented a breakthrough in the concept of free online shopping.

5. Up-selling and cross-selling

Even if you don’t buy something on the product page you browse, Amazon will do everything it can to “make sure you buy something.” They extend the length of the page with an impressive array of upsell and cross-sell modules to nudge you toward purchase.

Upselling is when consumers are persuaded to purchase a product that is of greater value than the product they initially selected, i.e. an “upgrade”. The newly selected product will have a similar purpose as the originally selected product, but will have more features and therefore will be more expensive.

Merchants can promote more comprehensive but more expensive products to consumers by catering to their emotional and practical needs. Even if each customer spends only a little more than they originally planned (and if the product is truly great, consumers can be easily persuaded to buy it), this can be a significant source of additional profit that can add up once a large number of customers buy.

For example, when you search for “keychain” on Amazon and then click on a product in the product list, this is what the top of the product page looks like:

Select the car model filter

Amazon uses visibility rules to display the “Select Model” filter whenever you view products in the “ Automotive - Interior Accessories” category. Amazon knows that you are looking at auto parts and will provide you with a filter bar that can personalize your search for more automotive products.

As you view more car accessories, Amazon will automatically save your model to "Your Garage" so you can easily purchase more personalized car accessories in the future:

Save the model to "My Garage"

If you scroll down and eventually select the additional product in the Frequently Bought Together module :

Bundle Sales

Amazon shows you a product bundle and offers you a discount if you buy both products together. An add-on product is not just any product, but a supplement to the product you are buying.

If you continue to scroll, Amazon will suggest other products to choose from, including “Related Products” and “Customers who bought this also bought” :

Related product modules

Under the "Related Products" module, similar products with similar characteristics to the user's search will also be displayed for the user to choose.

The "Related Ad Products" module is the related advertising products of Amazon merchants. If you still need a keychain but are not satisfied with the keychain on the current browsing page, you can reselect it in this section. The “Customers who bought this also bought” module is the same as the “Related Ad Products”, the only difference is that these are not sponsored by Amazon sellers.

Just below these two sections, Amazon displays a free product comparison chart where you can compare the product you’re browsing with other related products :

Product comparison chart

Amazon doesn’t care if you buy the product you’re browsing, they just want you to buy something. Therefore, by showing a product comparison chart, it can make you think that you are buying the most suitable product without having to visit other websites, which is very beneficial for Amazon.

The next section of the product page contains product information provided by the supplier, customer questions and answers, and reviews. The page then ends with more up-sell and cross-sell recommendation sections, such as “Customers who viewed this item also viewed” and “Recently Viewed Items and Featured Recommendations” sections.

Brief review:

• Personalized search (search for other accessories based on my car model)
• Bundle sales offers and "Frequently bought together", "Products related to this", "Customers who bought this also bought"
• Product comparison chart "Customers who viewed this product also viewed" "Recently viewed products and featured recommendations"

Summarize

In general, the success of Amazon's digital marketing is inseparable from the concept of focusing on user experience . Through clever marketing strategies, its services appear to be more valuable than those of its competitors. These psychological tricks are largely harmless and can be used by any company to increase conversion rates and optimize conversion efficiency.

Source: Growth Matters