Amazon is the largest online store in the world, which has mastered the ability to simplify online shopping for customers. One of the company’s key success factors is the analytical approach to the sales process and improving it in every possible detail. It is worth paying attention to the methods they use to increase sales, using psychological mechanisms (most often cognitive biases).
For those interested in the subject of cognitive bias, I would recommend the books of Daniel Kahneman, the Nobel laureate in economics. In particular:
- Thinking fast and slow
These books describe in an intelligible way the work of the human brain, in the context of cognitive biases. In particular, why are we susceptible to the influence of marketing activities, and why do we often make irrational decisions.
Promotion monitoring is very important, from the perspective of e-commerce sales. Apart from price monitoring, this should be one of the most significant elements of the analysis of promotional activities in online stores. Price monitoring is very important in the context of assessing whether the presented discounts are real or whether the price was raised earlier to reduce it later.
Below I will describe a few key types of promotions used on Amazon, that can be relatively easily applied in any online store.
The so-called “anchoring effect” described in detail in the above-mentioned book was used here. The crossed-out price becomes a benchmark for assessing, whether the current price of the product is attractive or not. Thus, our brains don’t have to think about the “real” value of the product (which may result from prices in other stores) because it already knows how much the product is worth and how much we can save buying it now.
How much do you save
“Loss aversion” is a very strong psychological phenomenon, that makes us feel, we are losing money if we don’t buy a product at a significant discount. Indicating the amount by which the price has been lowered additionally increases the feeling.
Limits are the key elements of the effectiveness of promotional activities. The promotion must be limited in terms of duration or the number of products. Only then can we create the need for a purchase, regardless of whether the customer needs the goods at a given moment.
Time-limited campaigns, shorten the customer’s time to change his / her decision (to choose a different product), which increases the chance of purchase even more.
Promotion (sales) lists are places with very high viewing figures in e-commerce. Amazon provides very interesting functionality, that allows you to sort promotions from top savers. This way customers browse products, that they were not interested in, before viewing the promotion.
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Promotion monitoring for manufacturers
By using the above-mentioned techniques, you can significantly affect the sale of products in e-commerce. If you are a manufacturer or distributor, you should analyze what promotional activities are carried out by competitive brands. It is worth monitoring the competition in all major online stores and sales platforms. You should take care of the visibility of your products in various promotions in online stores.
Monitoring promotions in the online store
If you are an online store manager, it is worth observing competitive stores and checking what promotions they have and for which products. This can give you a lot of interesting information about the promotional strategy, but also about the cooperation of the store with specific brands, and the discounts they have.
It is also worth considering other promotional activities that reduce prices, such as:
- discount codes
However, you should remember that new discounts and price changes only make sense, if the customer is informed about them and can’t easily find offers with a better price in the competitor’s online store. Therefore, promotion marketing and competition price monitoring are key elements in managing promotional campaigns.
Manager with experience in leading team of software developers and testers during implementation of internal and external IT projects. Ceo of Brandly360.com.
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