How Amazon Is Taking Over the World, One Sample at a Time

  • Categories:

    Media Strategy

  • Date:

    February 7, 2019

How Amazon Is Taking Over the World, One Sample at a Time

Media Strategy

Will Amazon rule the world? It’s a valid question, considering the company’s sheer dominance of online retail and its vast portfolio of acquisitions, from Audible to Zappos. The most popular online store with $178 billion in net sales in 2017 (Statista), Amazon also had 95 million paying Prime members in the United States as of June 2018 (Statista).

But why is Amazon killing it in so many categories after suffering an annual loss of $241 million as recently as 2014 (New York Times)?

For starters, consider the range of products Amazon sells. Unlike some big-box stores that try to do it all and end up not doing anything particularly well, Amazon transitions flawlessly from furniture to photo storage. The company also reinvests its profits in critical areas such as research and development and its employees. But Amazon’s success mostly stems from its penchant for hiring amazingly capable, talented people to invent and execute smart business strategies.

One recent tactic involves sending free samples to consumers based on items they have already purchased on the site. For this under-the-radar move, powered by machine learning, Amazon partnered with brands such as Folgers and Maybelline to let shoppers try a new coffee blend or mascara shade before they buy.

This represents quite an advancement from randomly stuffing samples in newspaper delivery bags — a practice that began in pre-internet times and still hasn’t evolved all that much. On the other hand, Amazon has the user data and distribution model needed to quickly deliver free samples that are both timely and relevant. It’s the Amazonification of targeted ads.

It’s another brilliant move from Amazon.

In one sense, it’s not only brilliant — it’s also logical. After all, brands are already delivering messaging based on behavior. They can serve up a banner ad, so why not serve up a sample?

Marketing is supposed to entice an audience to try a product, whether through a TV spot, a print ad, a video, an article, social media or some other tactic. We can lead the horse to water and hope it drinks. If we picked the right horse and made a great product and made contact at the right time, it probably will.

Amazon’s free samples program takes this a step further by not only leading the horse to water, but also giving it a cup. It fuses great targeting with unbeatable logistics. If you, the advertiser, have a solid product and can get it into the right person’s hands, you’ve done 90 percent of the heavy lifting. That path to conversion? It just got a lot shorter.

Yes, but …

While brilliant, this model may not work for a small manufacturer or retailer. Remember, Amazon has the customer data, high trust factor and existing infrastructure to distribute targeted samples more easily and quickly than any other company in history. Meanwhile, a small or midsize company could go bankrupt simply trying to keep up with fulfillment, shipping and promotion costs.

In an era where consumers are becoming more aware and protective of their privacy, hyper-targeted samples could also make some people uneasy. (“This random coffee just showed up my doorstep. Did they know I had a craving for espresso?” Yes — as a matter of fact, they did, and they knew exactly which brands, flavors and roasts you browsed.)

Finally, there’s also the question of how to adapt and scale this concept for a broader selection of products. Amazon started with consumer-packaged goods such as nonperishable groceries and cosmetics. What will it tackle next?

For it to work, the product has to be easily converted to a trial or sample model. It can’t be difficult to ship or expensive to manufacture. Paint companies can’t start sending samples by the gallon, but they can send a pint in a shade that complements the fabrics and furnishings people browse online — like a paint swatch, but next-level. Upholstered furniture companies can’t give everyone a free sofa, but they can offer a small square that allows people to touch and feel and see the fabric and cushioning.

What does Amazon’s free samples program mean for advertisers?

Cosmetics and coffee weren’t first out of the gate by accident. They have mass appeal. They provide value but don’t cost a lot of money. They’re easy to ship. If you’re thinking about testing the waters with a program like this, you’ll need to first consider whether you have a product that scales to the program’s model. Then, you’ll want to work carefully with your media partner to leverage Amazon’s data for precise targeting.

But if free samples work for a few early guinea pigs, history tells us Amazon will figure out how to expand it across their categories — including home – and smart marketers, in turn, will figure out a strategy that works for their product and brand.

Until then, drink those coffee samples while you watch and wait.

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