Amazon's Pschology
Why Amazon's use of gamification and psychology mean you loyal customers buy more.
Perceived Scarcity
Amazon's "only 3 left in stock - order soon" and "Limited Time Deal" messages triggers our limbic memory, evoking ancient survival instincts and urging us to buy quickly. By sharing seemingly "behind the scenes" data about item restocking, Amazon creates trust. When they admit uncertainty about an item's return, it feels like they're providing important information. This apparent transparency makes buyers feel informed and trusting, leading to increased purchases. However, the scarcity message is a false flag because nothing is truly "scarce" anymore. No matter how many are left when something makes money it is a safe bet there will be more soon.
Actual Scarcity
In 1999, four years after Amazon launched and initially purchased books at retail to ship their orders, Janet McKean and I launched one of the first B2C2B ecommerce sites, FoundObjects.com (now gone). Our bestseller, Magnetic Poetry Kit, had demand exceeding creator David Kapell's production capacity. Shrewd retailers bought in bulk, knowing they could quickly sell their inventory during the peak of the craze. Although Kapell eventually increased printing output, the scarcity mindset persisted among consumers. Luxury brands such as Hermés and Louis Vuitton are also masters of perceived scarcity.
Price Anchoring & Social Proof
Amazon is the master of "price anchoring." Price anchoring is a cognitive bias that influences a consumer's perception of a product's value based on a reference price or "anchor." This initial price point or "list price" in Amazon-speak, may or may not be related to the actual value of the item, serves as a benchmark for future price evaluations.
Amazon uses reviews as social proof to help provide the logic we need to make emotional buying decisions. When more than 1,000 people give a TV 4.5 stars it must be good. We buy with confidence to join the "tribe" of buyers who've shared their reviews.
Prime & Free Shipping
Shipping is never truly FREE, despite what many believe. With my 22 orders this year, I've paid an average of $6.31 per order in Amazon shipping costs, assuming Amazon Prime only covers shipping. However, Amazon makes Prime irresistible by bundling it with Prime Video, making it difficult not to renew.
Bundling also obscures the true cost of shipping and the actual value of Prime. Let's call this the Amazon obfuscation two-step - bundle and use powerful words such as "free" to create fog. The key takeaway is that memberships and subscriptions are effective because they personalize the experience and make customers feel like they're part of a mission, rather than just placing orders.
Other Powerful Amazon Ecom Tools
Add any two of these ideas to your website to make more money this year!
01
Subscriptions
Amazon uses one of the most under utilized yet powerful "make it easy to buy" ideas - subscriptions.
02
Bought Together
People who purchases X also bought Y renamed frequently purchased together is a powerful psychological tool.
03
Personalized
Your Amazon is different than mine because they use the same kinds of personalization algorithms Google uses because the Big A knows it is easier to sell MORE than NEW.
04
Seasonality
Amazon knows the web can be a black hole, so they flood their site with seasonal references to remind us time is moving relentless forward and we'd better get that father's day gift now.
Our Sites
