The Amazon brand is often made out to be the big bad wolf of ecommerce. Since launching in 1995, Amazon has quickly grown to become one of the world’s most successful businesses, defining itself as a brand that ruthlessly values innovation, product diversification, and customer satisfaction.
Most of this satisfaction is based on Amazon’s laser-focused commitment to convenience. Very few (if any) online retailers can compete with them on shipping and price, making them the first choice for many shoppers looking to make a quick online purchase.
Long term success relies on customer loyalty — is that something Amazon can achieve?
However, in order to succeed in the long term every business — even Amazon — needs true customer loyalty. Without it, it’s only a matter of time before customers start doing more of their online shopping somewhere else.
Can the Amazon brand ever achieve that level of loyalty? Our short answer is no, and for 3 good reasons.
Amazon brand loyalty is preoccupied with being transactional
The terms “transactional loyalty” and “emotional loyalty” are being used more and more often as brands discover that customers are tired of surface level relationships.
While ecommerce has made it easier than ever for customers to shop no matter where they are, it has also increased the desire for shoppers to be more connected to the brands they’re shopping with. Customers are no longer satisfied with simply finding the best price — they want to be shopping with brands that make them feel something and that try to understand who they are on a personal level.
Customers want to build emotional relationships with the brands they shop with, not transactional relationships.
This is one of the fundamental reasons the Amazon brand will never inspire true loyalty in their customers. Instead, they are destined to continue building relationships built on transactional loyalty. Even though the word “loyalty” is used to describe it, that doesn’t mean it’s valuable. In fact, transactional loyalty is one of the more undesirable forms of loyalty to encourage because it cheapens your brand experience to nothing more than the money your customers spend with you.
Amazon is preoccupied with buying their customers' loyalty, not earning it.
For Amazon, this means that customers only care about how big of a discount they can get. With high competition and increasing acquisition costs, Amazon is more or less forced to buy their customers’ loyalty in order to guarantee they’ll return in the future. Aggressive shipping timelines and undercutting on price will motivate customers to stay loyal simply because they’re saving money, but as soon as the aren’t saving they’ll be off looking for the next great deal.
This approach to customer relationships makes every connection Amazon creates with their customers based solely on how much they do or don’t spend as opposed to how they actually make customers feel.
Amazon doesn't tell engaging stories
Stories are one of the best ways to foster emotional connections with your customers. Whether it’s through traditional advertising, value-add marketing content, or your onsite experience, stories help you tap into and display the values you and your customers have in common.
At a glance, it might look like Amazon is doing this well. With a number of amusing ads put out every year, Amazon seems committed to telling stories that meet their customers where they are and appeal to everyday situations that everyone can relate to.
The problem is that each of these ads are ultimately still about transactional factors. Whether it’s the supreme convenience of being an Amazon Prime member, or how quickly you can avert a wardrobe crisis by simply ordering it the night before, every message they put out there has to do with price, shipping, or product selection.
Amazon's stories revolve around transactional features that don't encourage a deeper, lasting connection with the brand.
These types of stories don’t resonate with the growing audiences that are looking get more out of the experiences they share with the brands they shop with. Customers are savvy enough to identify brands that actually want to engage with them on a more personal level, and are looking for opportunities to invest in brands that connect with them with narratives beyond simply making a purchase. From social responsibility to an exciting origin story or a compelling rewards program, customers are demanding more from the stories the stores they shop with are telling.
"This idea that Amazon can introduce a product and magically use data to dominate a category is just a conspiracy theory."
Juozas Kaziukenas, "Most Amazon Brands Are Duds, Not Disruptors"
That’s why the Amazon brand is struggling, even in their own marketplace. In a study of 23,000 unique products, customers weren’t more inclined to buy Amazon brand products even when they were elevated in search results. Instead, Amazon’s success with their house brand is limited to basic products like batteries — in other words, products that people just want a low-cost alternative for.
At the end of the day, household names and good storytellers still hold powerful positions for today’s relationship-driven customers. Without giving customers a compelling reason to buy their products, true Amazon loyalty is unlikely to develop — with or without a clever advertisement.
Amazon's online experience is anything but exciting
One of the biggest joys of shopping offline is the unique experience every brand offers. The physical layout and design of a store can have a significant impact on how much a customer enjoys shopping there, and has the power to convince them to come back or choose an alternative.
86% of customers are willing to pay more for a better experience.
Online, these elements translate to the look and feel of your homepage, browsing experience, and checkout process. These features separate the best ecommerce brands from the competition, and have incredible influence over how likely customers are to return simply because they enjoyed the experience. In fact, 86% of customers are willing to pay more for a better customer experience.
This makes Amazon’s get-it-for-less offer less compelling because it is simply unremarkable. Not only that, but Amazon has also committed themselves to optimizing for speed of purchase, leaving little time or desire to do anything else. Where other brands invest in designing an engaging homepage or email marketing campaign, Amazon continues to rely on how quickly customers can complete a purchase. While no one else will be able to compete on those terms, they sacrifice the ability to deliver an exciting, or even memorable, experience.
Their partnership with Nike is a great example of this juxtaposition. Nike’s traditional retail and ecommerce experience is exciting, 100% on brand, and unique to the stories they tell and products they sell. From the imagery they use to the way their stores are organized, every customer is made to feel like an athlete and empowered to learn more about the equipment that will best help them achieve their goals.
On Amazon, this brand experience is diluted to look and feel like more of the same. With nothing to truly distinguish them from other athletic brands in the Amazon marketplace, Nike has had to sacrifice one of their best differentiators simply to be “where everyone else is.”
Amazon is selling loyalty, not building relationships
When you remove convenience from the equation, Amazon is not outperforming their competition. With poor storytelling, a one-size-fits-all approach to online experiences, and an emphasis on transactional relationships, Amazon makes a clear statement that their main goal is simply to sell more, not build connections.
While this approach might not ever result in them losing their coveted spot as one of the most powerful brands in the world, it will continue to hinder their ability to cultivate true customer loyalty.
Without effective storytelling, engaging experiences, and emotional connections, they will never be able to shake the competition that slowly but surely is delivering exactly what today’s customers are looking for: genuine connection.