“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” – Maya Angelou
In the pursuit of offering incomparable customer experience, e-commerce players will be required to take tough decisions, cut-short profit, and work harder. To create an exceptional experience for their customers, one must first understand the challenges. E-commerce players need to be at their best because there’s no manual but a competitor so big that mountains appear small.
Amazon can be the guiding light for upcoming digital stores but copying it blatantly can backfire. While Amazon has huge market capital, it can afford to see a few campaigns go futile but nascent start-ups need to be on vigil on every penny spent.
How Big is Amazon as an E-commerce Organization?
On Amazon, around 8.6 million sellers with 12 million products are catering to 310 million people annually. Amazon’s revenue increased from $232 billion in 2018 to $280 billion in 2019, that’s a year-on-year increase of $47 billion. Amazon is not just another e-commerce player, it is an example that everyone follows.
Some Statistics that Highlight the Influence of Amazon
- 89% of surveyed buyers agree that they are more likely to buy from Amazon than other e-commerce stores (Oberlo)
- Amazon drives 29% of its revenue through product recommendations
- 72% of users prefer Amazon over Google for discovering new products
- 100 million Prime subscribers in the US alone
How did Amazon Become a Force to Reckon With in E-commerce?
Accurate Product Recommendation with AI
A McKinsey & Company study suggests that Amazon drives 35% of its sales from product recommendation. By analyzing the user, their needs, and their past shopping history, Amazon recommends products. Often product recommendations are also based on browsing history, what’s popular in a specific geography, and price bracket selected by users.
By Improving On-site Product Discovery
Out of 100 people looking for new product ideas, 72 of them are likely to start their journey on Amazon instead of Google. Amazon has left Google behind in the race of facilitating faster product discovery. By speeding the process of product discovery, Amazon has simplified the decision-making process. One day delivery, easier return policy, and quality customer support are additional benefits that help customers make a faster decision.
Catalog Management that Supports Cross-selling
Learning from mistakes in the past is perhaps one of the most prominent reasons why Amazon is such a success. The e-commerce giant has overhauled its catalog management strategy to win in the long era. The quality catalog management practices have made it easier for the on-site search engine to rank relevant products and also recommend closely related products.
Cross-selling and up-selling are perhaps the most common ways of increasing average order value and customer lifetime value. Displaying products that are required for the smooth functioning of the primary product bought by customers.
Quality Post Sale Support
A customer’s journey starts with product discovery and ends with that product helping customers elevate their standard of living. A lot of online players consider the customer journey ends with the end of return period but no post-sale support is equally important and very much a part of the customer’s journey.
By facilitating quality post-sale support, digital stores can retain customers even after they have had a bad experience. Reaching out to customers at a time specified by customers through means preferred by customers is perhaps the key to quality customer support.
Amazon has achieved the highest standards of customer service by leveraging omnichannel expertise, where customers can pick up from the point they left last time across platforms and devices.
CX Lessons from Amazon for Every E-commerce Players
1. Customer-Centric Practices
It is Amazon’s inundate effort of simplifying a customer’s journey that makes the most loved e-commerce platform. People just love shopping from Amazon not because it offers a heavy discount but because it is an experience worth remembering. The e-commerce leader has processed all kinds of user data collected to create an experience that is very light but impactful.
By being customer-centric and applying paradigms that simplify the online shopping experience, Amazon has also inspired a generation of competitors. Here’s an example of how Amazon is using features to help customers have a quality experience.
Amazon has a unique feature where it takes your child’s date of birth as an input and in return, it sends you relevant offers, tips, and product recommendations. This one small feature was developed with customers in mind and that is why it solves multi-problems like:
- Finding new and exciting products every year
- To grab the products at the best available price
- In some cases remember the date of birth of your nephew or niece
- It saves you a lot of time that goes in researching age-based products
2. Facilitating Voice and Multilingual Search
When catering to a country like India, which has over 21 official languages and more than a thousand spoken languages, it is necessary to facilitate multi-lingual text and voice search. Well, there’s a long way for Amazon to go before it successfully supports Indian languages like Tamil and Punjabi but it has very smartly aced the difference between US-English and UK-English.
For example, in some countries batteries used in clocks are called “batteries” while some communities refer to it as “cells”, same goes with mobile devices, in India, people predominantly refer to cell phones as “mobile phones” hence optimizing your search results is important.
Amazon.com, which primarily serves the US audience is now also shipping to countries like Japan, Germany, and India. The global player has optimized its on-site search to support multi-lingual text and voice search. A user searching from the US will be able to products relevant to his or her country whereas one looking for a product from Japan will find products relevant to his or her country.
Such optimizations look small on the outside but on the back, it requires a team of dedicated professionals to carry on intricate processes like catalog management, attribute value addition, and search quality analysis.
3. Get Refund on Late Delivery
Well, we do not endorse following such practices because packages often get late due to mistakes made by sellers, logistic partners, and even customers. Offering a hundred percent refund won’t make sense for late deliveries because it takes away money from everyone’s pocket. Seller, marketplace, and logistics everyone loses money with such practices.
A DealNews Report highlights how Amazon is offering a refund of $5-$10 if the delivery gets delayed. There’s a catch though, the refund will be applicable only on products that come with “Guaranteed Delivery Date”.
As mentioned, we don’t endorse having one such practice but we still have mentioned it on our list of 10 CX lessons to get from Amazon. Here are the highlights of this feature:
- Amazon is confident about the practices it follows. Since it has an established logistics network, it can guarantee such deliveries.
- Amazon urges customers to go ahead and make the purchase even when they need it at short notice. The refund guarantee builds confidence and helps Amazon receive an order that generally would’ve gone to a local retail store. Such smart marketing gimmick helps Amazon boost customer confidence, which brings in the free word of mouth marketing and a sharp increase in customer loyalty.
- Such offerings coax customers into thinking of Amazon has their reliable or last-minute partner, which is why this e-commerce platform now is beating Google at its own game of product discovery.
4. Focusing on the Long Term Gain
The E-commerce industry is gaining momentum, with a sharp increase in the number of users from India, Singapore, and Germany, the industry is expecting 2 billion users by the end of 2020. By 2040, the industry is expecting to take over 95% of retail transactions hence e-commerce players focusing on the short-term gain are likely to lose their identity in the long run.
Amazon started almost 25 years ago and ever since it has only grown. What started with an online book store now sells everything a common man needs. Amazon has made Jeff Bezos the richest man on the planet not because he looked for areas to make quick money with fake or imitated products.
Amazon is keen on identifying weak products, incompetent sellers, and removing them before it impacts the brand reputation. Here are some rules that Amazon abides by and you can consider following on your digital store too:
- Seller accounts are blocked if reports of selling fake products are found to be true.
- Seller account temporarily suspended if the seller fails to ship products within a stipulated period.
- Contacting customers directly and offering promotional offers can lead to permanent removal from the platform
Today Amazon is offering Free Delivery + Free Movies + Free Songs to Prime account holders for a nominal monthly fee not because it has a very high valuation but because it is now focusing on customer retention.
The increasing number of competition has coaxed Amazon is taking steps that are costly but tends to bear fruits. All these free delivery and free movies are additional benefits that have kept loyal customers from churning. If Amazon focused on short-term gains, they would have levied heavy shipping charges and gained momentarily only to lose in the long run.
Here are the long term lessons from Amazon
- Make the experience memorable, the customer will take care of the cost
- Let go shipping charges to increase the customer’s lifetime value
- Ban all sellers who are relying on malpractices for personal benefits
- Render all attempts of traffic diversion or brand building by sellers obsolete
5. Live Chat and Customer Call Back Option
Improving its customer service standards by a notch, Amazon has now introduced a unique feature where customers can ask for a callback anytime. India’s leading e-commerce players are also copying this feature to assist customers at a better level.
Live chat option was introduced years ago by Amazon, where the customer selects the order and then goes on with the explaining the problem. Now instead of typing, customers can simply request a callback and explain the entire problem and seek a resolution. Call back feature improves the overall customer experience because:
- It allows customers to request a call when they are free
- The entire focus of the support agent remains on one customer
- It is easier to explain the problem on a call than on chat
- Faster resolution because of a better understanding of issues
6. Price Matching
We often come through studies and research papers that highlight, how almost 60% of customers compare products before buying it from an online store. Some studies portray customer experience as the key differentiator and valid it by adding how “84% of customers are willing to pay extra for a quality experience”.
Well, customer experience is undoubtedly a key differentiator but if price fluctuations are heavy, then customers might reconsider their loyalty. To counter such problems, Amazon follows competitor benchmarking practices, where it matches price with its competitor to help loyal customers make a better choice.
Additional benefits of Price Matching Includes
- Lesser customer churn
- Increased customer lifetime value
- More sales leading to higher seller satisfaction
Customer experience is at the center of this price matching exercise because it makes customers feel Amazon is not cheating them and strengthens their trust in the brand.
7. Seller Selection Option for Faster Delivery
Almost every online marketplace has its own set of rules, which helps them determine the best seller for the “Buy Now” button. Marketplaces often look at several factors when determining the winner of buy now button, some of the factors considered are:
- Past selling experience
- Speed of delivery
- Customer reviews and problem resolution feedback
- Number of products
- Volume of transactions
The seller recommended by the marketplace is perhaps the best seller to buy from because they can ship it fast, have better problem resolution ratio, and lesser complaints related to quality. There are instances when a user living in New York orders a product and a seller in California ships it even when there are sellers in New York selling the same product and it happens because Amazon relies on a set of regulations to select the seller and not just rewards the nearest seller with the order because of the focus on customer experience.
Amazon now allows users to select the seller, which has its own additional set of benefits like
- Customers can order and receive products at last minute
- The overall delivery charge reduces on Non-Prime products
- Improved customer experience since users have more option to choose from
8. Early Access to Deals for Prime Users
With multiple unicorns competing it out, organizations now know that the key to success lies in customer retention. To stop customers from churning, Amazon has created offers like same-day delivery and Kindle renting possible for Prime users.
In a step towards promoting better brand loyalty, Amazon now lets Prime Users get early access to all sales during holidays and popular festivals like Christmas and Diwali. It works two ways, customers who are not prime users, also end up subscribing to it.
Such features help e-commerce leaders retain loyal customers and also creates a fear of missing out on non-prime users, which coaxes them in subscribing to it. In all cases, Amazon wins but it feels like customers are winning.
9. Multiple Payment Options
Amazon is passed that phase where it has to prove its worth. It is undoubtedly the first organization people think of at the mention of e-commerce. The organization is so popular because it understands the importance of customers and their journey. By facilitating a smoother on-site journey, Amazon is retaining customers and also gaining referral users.
Amazon continues to offer an array of payment option to choose from like
- Credit card
- Debit card
- Prepaid card
- United Payment Interface
- Cash on Delivery
- Card on Delivery
- Amazon’s Pay Later
A good number of new marketplaces are not offering cash on delivery facility. In countries like India and Bangladesh, cash is one of the most preferred modes of payment. While the increased Fintech penetration has changed the way people pay for online orders but there’s still a long way to go. With multiple options like cash/card on delivery, marketplaces can control the cart abandonment rate and increase the number of average orders by a customer.
10. Customer Retention Mindset
Amazon’s gigantic success can be easily attributed to its customer retention mindset. While the e-commerce giant continues to acquire new customers aggressively but the prime focus is on retaining the existing customers. By prioritizing existing customers, Amazon ensures that a customer’s lifetime value and average order value increase, which makes it tough for other players to grow.
By ensuring that existing customer base is secure, Amazon renders all competitors useless and then carries on with innovation and new offerings. The global giant’s customer retention mindset reflects in everything they do; the agents are willing to help customers at their convenience and also offer compensation when failing to do so.
Many times, Amazon is offering Prime accounts or extending the validity of Prime account for customers who’s complaint wasn’t addressed effectively.
Quality customer experience is not an exercise but an outcome of all the intricate processes at the backend. Product discovery, catalog management, omnichannel expertise, and fraud prevention come together to offer an experience to customers that is exceptional and smooth.
To master premium customer experience, e-commerce players will have to go through every process meticulously and ensure quality. When you work out the basic and nitty-gritty details the biggest things start happening on their own.