The Wall Street Journal this morning reports that Amazon is testing a "Buy Again" tab on its home pager that "uses a customer’s order history to make recommendations, including in categories such as groceries or electronics."
Some context from the story:
"'Buy Again' has been used in recent weeks on a variety of accounts tracked by market-intelligence firm Watchful Technologies. Amazon, which has seen less growth in its Prime memberships in recent years and less spending from its users, is seeking to drive customers toward more regular purchases or steer them toward subscription-based ordering through a feature called 'Subscribe & Save.'
"Analysts have estimated that after years of fast growth, sign-ups for Prime memberships have slowed. Customers as a whole also appear to be spending less per order. Average annual spending from Prime members decreased from about $1,400 in 2018 to $1,100 last year, according to research firm Consumer Intelligence Research Partners. The spending amount for non-Prime members also fell during the same period, decreasing from an average of roughly $600 a year to $500 a year. Amazon said Prime membership continues to grow year over year.
"Amazon has tried different ways to get customers to reorder items they have purchased in the past. Its Alexa assistant, for example, notifies some customers of potential order options based on order history. In addition to boosting revenue from existing users, making the subscription service more prominent could be another way to further entrench Amazon into users’ lives, said Daniel Buchuk, a researcher at Watchful Technologies, which analyzes Amazon’s testing practices."
The story suggests that it remains to be seen "how much Amazon could hone the recommendation tool, since some items on the site may not ever convert into something customers would buy on a repeated basis."
- KC's View:
I must admit that I was a little surprised by this story, which the Journal hypes as being "exclusive" on its home page. I've been an Amazon shopper for a long, long, long time, and this doesn't seem particularly new to me.
It seems so old hat that I can't even remember when it started - it just seems like a "buy again" option has been popping up forever in one place or another, and that I've almost always been informed when products in which I am interested are available in the "Subscribe & Save" program. (I am particularly aware of the latter, since I am an enormous proponent of the power of automatic replenishment for shoppers.). The Echo on my desk also has for some time been reminding me when I might need to reorder a variety of products.
But let me be clear. The Journal positions these offerings as part of Amazon's current persistent efforts to drive more sales and profits, and the implication is that this somehow is unseemly. But helping people buy items again is what smart retailers do. There's nothing wrong with it - it is helpful, especially when it becomes part of the fabric of the shopping experience. More retailers should do it - they have the data, it is actionable, and now all they have to do is actually act on it.
That said, some of the numbers in the Journal story must be alarming to the folks in Seattle, especially as it concerns Prime members spending less money on Amazon. I'm not sure that the best way to address is is to do things like charge people more money if they want Prime Video to be commercial-free, which is how it always has been. The better solution might be how Jeff Bezos always used to talk about it - creating more value, so that not being a Prime member is irresponsible.
One other thing. I am reminded this morning that Amazon's mantra always has been, "We don't sell people stuff. We just make it easier for them to buy stuff."
As long as Amazon remains true to that basic value proposition, it will be fine. What worries me is that increasingly, the company is coloring outside those lines.