Amazon is one of the largest eCommerce platforms that operates worldwide and enjoys a massive customer base. The site is popular for its budget-friendly products and it is a go-to place for retail shopping.
The platform has come a long way from a small online bookstore to a retail giant. It earned its position by focusing on providing the best experience to its buyers and evolving its marketing strategies to fit its purpose. Today, billions of people visit the site for its diverse catalog, low prices, and shipping convenience.
Amazon is an excellent example of how simple marketing techniques can help you scale your business.
The company’s success proves you don’t need creative ideas to build an empire. You merely need to think from your target market’s perspective.
Here, I’ve shared seven core marketing strategies Amazon has used over the years to boost its sales.
These techniques will help you brainstorm ideas and develop a solid game plan for your company.
1. SEO Strategy
Amazon relies on its SEO strategy to extend its reach and discover new opportunities.
As you know, SEO optimization is a marketing tactic that increases your brand visibility to make your products easier to find on Google.
Amazon applies SEO strategies for Google and its own website search engines to generate sales.
I am not sure if you’re aware, but Amazon lists several private brands on its website along with the vendors.
Since the platform features over 2 million products on its website, Amazon has incorporated an algorithm system to rank the items according to their features. It brings up those products in the search results that offer the customer the best deals—as Google does.
The algorithm helps the company gather data on its buyers and leverage it to generate profits.
How?
Amazon uses the site’s SEO metrics to uncover people’s preferences, optimize its content against related keywords, and reel in its prospects at competitive prices. Meaning, the company monitors its vendor’s sales to determine the products that are in high demand, and starts selling the same items using a private label.
It might seem like a rather sneaky thing to do, but you have to admit, it’s a brilliant strategy. It allows Amazon to generate leads from both Google and its own platform.
You’ll find other brands using the same technique as well. For instance, Sephora features its private-label along with popular cosmetics brands, or Walmart sells house products at a relatively low price. Amazon simply is more subtle about it.
2. PPC Advertisements and Affiliate Marketing
Amazon uses almost every marketing channel to promote the platform.
The company employs email marketing, print media, social networks, and even commercials and billboards. Anything that could attract traffic is on Amazon’s list.
But what brings the most benefits to the company are its PPC and affiliate programs.
PPC is an abbreviated term for Pay-Per-Click; An advertising method where you pay for evey click your ad gets. When you use Amazon to promote your products using PPC ads, you pay Amazon for every click your ads bring, regardless of the sale.
Affiliate marketing is an advertising method in which you ask a third party (called an affiliate marketer) to promote your product and pay the marketer based on the number of sales they bring. Affiliate are generally paid only when a sales happens. However, this is subjective and sometimes affiliates get paid for each lead as well.
Both are highly cost-effective and bring lucrative results. If you check the states, PPC generates nearly 200% return on investment, and affiliate marketing attributes to $16 of global sales.
Anyways, coming back to the subject. Since Amazon caters to B2B clients, the company offers PPC and associate programs to facilitate its customers. But really, in truth, the programs facilitate Amazon more.
Let me put it this way.
PPC advertising allows merchants to sponsor their products on Amazon. Its associate program, on the other hand, allows sellers to acquire outside blogging services to generate leads from Google.
While both PPC and associate programs are technically Amazon’s products, they help the company bring traffic to the site.
If a vendor is guest blogging to promote its products, the entrepreneur has to mention “Amazon” to direct traffic to the store. This, inadvertently, advertises the platform. Alternatively, if PPC is Amazon’s in-house item, which gives Amazon free rein to use it to its advantage.
Ultimately, both parties benefit from it.
Brilliant, isn’t it?
3. Product Diversification
Product diversification is Amazon’s core marketing strategy that’s brought the company’s global success.
If you look at Amazon’s history, the company’s product line initially consisted of merely books. At that time, the book wholesale market was easily accessible, and creating an online marketplace for readers seemed like a good idea to Jeff Bezos.
But over time, he realized relying on books might stunt Amazon’s growth and began adding more items. Subsequently, Amazon’s product range expanded, and its catalog grew from books, electronics, software, to household items.
When the company’s retail business took off, Amazon launched its web services and Prime subscriptions. Gradually, as its B2B client base increased, Amazon conveniently introduced PPC and the associate program.
While all of Amazon’s products are separate, they connect with each other. The company has practically built an entire ecosystem through product diversification.
Jeff Bezos, in one of his interviews, once said “You know, things just don’t grow that fast. It’s highly unusual, and that started me about thinking, ‘What kind of business plan might make sense in the context of that growth?’.”
He created a highly flexible business model that allowed him to periodically introduce new products to meet ever-changing trends and customer demand.
4. Dynamic Pricing Strategy
Amazon’s biggest advantage is its price strategy. The platform doesn’t offer the cheapest products on the market. Yet, Amazon enjoys a large pool of customers.
How?
Amazon employs a mix of cost leadership strategies and dynamic pricing structures to generate sales, all year round.
A cost leadership plan typically involves lowering your prices to make your product attractive to the price-conscious audience. Companies that mass produce their inventory pursue this type of model to sell inventory in bulk quantities. The dynamic pricing structure, on the other hand, requires altering your prices to set the best rate your target audience will be willing to pay for your products.
Amazon uses different pricing structures for its versatile product lines. The company offers lower prices for its retail business to attract price-sensitive buyers. But, since low prices often cut its profit margin, Amazon regularly changes its prices to cover losses.
The company applies a similar dynamic pricing method to its cloud services. It offers a pay-as-you-go plan to lure customers and earn later as clients expand their business.
That’s primarily how Amazon gains profits and still maintains its position in the market as a pocket-friendly platform.
5. Seamless Shipping Experience
Seamless distribution strategy plays a crucial part in bringing repeat customers.
Many online marketplaces, like eBay, merely offer a place to connect buyers and sellers. The company themselves don’t handle the shipping process and instead provide tracking options to overseas the delivery. This leaves the enterprise vulnerable to fraud and negative feedback. And while online retailers have refund options placed to protect their buyers, the company still loses sales.
Amazon gets 60% of its repeat customers because of its seamless shipping experience. It has a well-established distribution network to make sure people receive the parcel on time.
The company operates approx 185 fulfillment centers worldwide, and stores the inventory in its warehouse before shipping it to customers. The order fulfillment centers cut Amazon shipping costs significantly and speed up shipping.
More, the physical presence of items allows Amazon to examine the product’s quick availability to ensure delivery runs smoothly.
The retail store also uses both in-house delivery vans and third-party services to give its customers multiple shipping options.
It’s worked remarkably well for Amazon.
6. Optimized UI Design
People mainly shop from Amazon for its attractive prices and shipping ease. But there’s one other factor that makes Amazon the most appealing to buyers.
It’s the platform’s UI design.
Amazon UI is deliberately designed to keep users engaged.
It has a consistent search-oriented layout to not only help people easily search what they look for but also entertain them with interactive features.
If you explore the Amazon site, you’ll find a search bar on every page and extensive filters to narrow down your results. Both features personalize your search results and speed up the purchase process.
The site additionally displays product recommendations to pique people’s interest and at the same time cross-sell low-demand items. More, it has a review section to help buyers see real-time feedback, and a straightforward check-out process to make shopping easy.
Suffice to say, each Amazon feature focuses on improving the user experience.
Over 50% of people buy from Amazon because they find its platform easy to navigate and incredibly convenient. That’s another reason Amazon is ranked in the top ten list of high-traffic platforms.
7. Customer Loyalty
Amazon has one of the highest customer retention rates. Almost half of the U.S. market makes a repeat purchase on the platform, and nearly 91% of Amazon’s prime members are its long-term customers.
How do you think Amazon has gained a loyal fan base?
The company’s strength lies in its customer service.
Amazon offers incentives, convenient purchase options, after services, and member privileges to ensure its customers are happy with the purchase.
48% of Prime members shop weekly to avail of free shipping, discounts, and early access to hot deals.
Over 66% of people search for products on Amazon because of its extensive search feature, and a broad selection of products. And most find the platform reliable due to its seamless return process.
Building a loyal customer base is one of the challenging aspects of the business. Amazon too, struggled for years, in finding the best possible way to gain customer loyalty. But through its customer-centric marketing strategies, the company has won people’s loyalty.
Conclusion
Amazon’s marketing model is a great inspiration for new sellers.
In the last ten years, Amazon has astonishingly grown its revenues from $34 billion to $386 billion and built a brand image by keeping its customers satisfied.
The company observes what makes people buy your product and uses a combination of innovation, trends, and tech to deliver a memorable shopping experience.
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