Personalization and Amazon Prime Day

By Erika Goldwater

July 19, 2018

As a personalization vendor, we spend a lot of time studying how individualized and personalized experiences can help with many challenges faced by marketers and ecommerce organizations when it comes to driving conversions. So, just days after the Amazon Prime Day Problem, we can’t help but ask: would a more personalized user experience have solved some of the issues that caused the site crash?

Buyers have endless choices when looking to make a purchase. Retailers often seek to drive engagement and conversions with a variety of marketing tactics, discounts being one. Amazon’s Prime Day is a perfect example of this. It’s a good tactic, and a great success story for Amazon since the sale’s inception three years ago. However, although this year’s Prime Day was a win for the business, setting record sales of $3.5 billion, it was a little different from the customer’s perspective.

In driving millions of buyers to the site, Amazon created massive amounts of traffic hitting the servers and utilizing search functionality at the same time. The company failed to anticipate the extreme demand, and customers experienced major performance issues as a result: carts were emptied, links didn’t work, and finally the site crashed—leaving many shoppers less than thrilled with their experience.

To be fair, Amazon did have great images of dogs to greet unhappy shoppers, lessening the blow a little.

Would personalization have made a difference?

The problem with generic discount tactics like the Prime Day offers is that they generally push shoppers to make a single purchase based on category, without using customer data to influence the offers. The idea behind the 36-hour sale was to sell products that Amazon wanted to sell (and drive new Prime memberships), not necessarily to sell what their shoppers wanted to buy. That works great from a merchandising perspective, but is it possible to have it both ways so that merchandisers and customers both get what they need?

The customer experience offered by Amazon was far from personalized.  Customers were forced to manually sift through piles of products that they weren’t interested in, using a one-size-fits-all experience.  Sifting through products extends the buying process and fatigues the customer.

Would personalization have made a difference?

Consumers not only expect personalization, they demand it.

According to a recent Shopify article, “75 percent of consumers like it when brands personalize their messaging and offerings. Also, 74 per cent of users become frustrated when content is not relevant to them. But most of all a personalized experience can improve conversion by almost 8 percent.” That’s what motivates top performing ecommerce organizations to deliver 1-to-1 personalization, which  drives higher conversion rates, increases average order value (AOV), and increases the quality of customer experience.

If Amazon and other retailers (large and small) seek to drive massive online sales via deep discounts, is it worth it to make their offers more personalized?

Yes.

It’s already been shown that personalization can help increase the likelihood of conversion by reducing the number of clicks between site entry and add-to-cart, according to Shorten the Conversion Funnel with Great Merchandising by Monetate. But creating an efficient path to purchase through personalized content and offers has another benefit, as well: by diversifying those paths, brands can reduce the traffic burden on common site areas like search or the homepage, thus mitigating the risk of detrimental performance problems.

The benefits are twofold: when brands encourage individualized customer journeys, they can provide a more relevant and pleasing brand experience in general, while also ensuring that their consumers don’t feel like cars stuck in a clogged tunnel at rush hour.

The “Prime Day Problem” wasn’t directly due to a lack of personalization. However, could it have been avoided with personalized offers? Maybe. Amazon broke its own 2017 Prime Day record this year, reaching $3.5 billion and selling over 100 million products. So in terms of driving revenue for the organization, Prime Day was successful, but there is no doubt that additional personalization would have made it better.

Given the data on how personalization can significantly increase average order value (by up to eight percent!), how much higher could the numbers have reached with personalization? We can’t be sure, but we do know it’s possible that Amazon could have delivered the kind of experience that would make its customers want to return for future Prime Days, while maybe even seeing a boosted AOV that would have sweetened its business results even further. Who knows? There’s always next year.

Erika Goldwater, CIPP/US is a B2B demand generation expert with over 15 years of experience in fast-growth technology and consulting organizations. Goldwater has had her privacy certification since 2008, working to help marketers implement best-practices and drive revenue the right way. Prior to Monetate, Goldwater was VP of Marketing for ANNUITAS and Marketing Manager, Strategic Accounts and Partners for Eloqua.

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