Amazon India: A Look Into The ‘Apni Dukaan’ Shopping Experience
By Sapriya Sharma (UG 24), Edited by Rhea Hajarnavis (UG 23)
The e-commerce giant — that is itself on the lookout for more Behavioral Research Scientists — has been perhaps the most successful in using tactics and nudges that tie back to concepts from behavioral economics to maintain its extremely successful customer retention and loyalty rate of over 90%.
So, how does Amazon do it? How, in an attempt to buy a product, do we end up looking at — at least — six more? The answer to these questions lies in delving into Amazon’s customer experience and understanding how the platform is built to constantly keep eyes engaged on one thing or the other.
- You’re being he(a)rd: Amazon, on top of closely keeping a track of each customer’s purchasing pattern, really invests in taking ‘Social proof’ and ‘Herding’ to another level. Both of these hint at our tendency to intuitively repeat the same actions and choices as others around us. Every purchase decision that we end up making on the platform is either because we trust the many customers who have already bought the product and took the time to leave a review, or because of cues like ‘Customers who bought this product are also buying’ it. The latter is also a form of ‘upselling’ which is another retention strategy that works particularly well for the platform in terms of suggesting higher value alternatives to the same product you’re looking for.
2. No fear, No regret: The basic idea behind loss aversion is that we’re affected by our losses far more than how much we enjoy our gains. Thus, in an attempt to leverage its customer’s loss aversion bias, Amazon provides a welcoming return policy that, for a lot of its products, offers up to 30 days for customers to either call for a complete refund, or replacement of the product. This helps in further convincing us, the customers, to make the (already rated and accounted for) purchase as we would virtually have nothing to lose on that purchase.
3. Let them do it for you: Amazon makes an extremely convincing pinch in explaining how their priority is to make the customer experience as convenient as possible. From offering to ‘remember your card details’ to providing an algorithmically curated list of personalized recommendations that match our previous searches and purchases, Amazon lends a hand to its customers and offers to help us cross the road by catering to our default bias. These ‘defaults’ can also be understood as habitual engagements, or essentially, decisions that we continue to consistently make without any thoughts or changes.
4. Order NOW!: The platform also cashes — both figuratively and literally — on the uneasiness of its customers’ Fear of Missing Out. It does so in two different ways. First, it creates a sense of urgency and does not shy away from using an eye-catching red textual update that reads out “Only 2 left in stock — order soon.” Second, it employs the concept of ‘pre-selling’ and creates a hype around its ‘blockbuster deals’ that offers bundles or reduced prices of higher-priced products, thereby increasing our perceived value of bundles. Thus, Amazon makes use of the ‘framing effect’ by altering how information is made available to us.
5. “Customer is King”: One of the best strategies that works for this e-dukaan, however, is the illusion of control and choices that it creates for its customers. We let ourselves believe that we truly are cautious and rational consumers only because Amazon lets us believe so. It reassures us of how we’re ‘saving’ money on several purchases and helps us compare the product we’re buying with others of its kind. In fact, through ‘cross-selling’, it also lets us believe that we most definitely needed to buy two other products that complement our purchase because they are ‘frequently bought together’.
6. Deal or (a)No(ther) Deal: It becomes really hard to not indulge in a purchase on this platform when almost every option that we get before clicking away is a positive ‘call to action’. The choices that it offers are simple- ‘Buy now,’ ‘Add to Cart’, ‘Add to Wishlist’, and ‘Save for Later’ — all nudging us in the direction of making a decision that’s favorable for Amazon. Should you choose to not buy the product you spent hours looking at, Amazon will ensure that you are met with instant recommendations and offers that are somehow both related and distant to the initial course of your quest.
We hope this piece helped you gain an insight into some of the many reasons why we keep returning to this renowned shopping experience. And, because you’re loyal customers, we know you’ll ‘buy [more articles] again’ right here. Happy shopping!
Sapriya Sharma is currently in her first year and is interested in pursuing an interdisciplinary major in Economics & Finance. She is also particularly drawn to the study of Consumer Behaviour under the umbrella field of Behavioural science. She takes comfort in engaging with this field that, she believes, everyone is involved in — both consciously and subconsciously.
