5 Customer Retention & Loyalty Strategies Retailers Should Steal from Amazon

Tomorrow, on the occasion of Amazon’s 20th anniversary, is Prime Day.

Prime Day may be an attempt to maximize the number of Prime subscribers before the launch of competing services from Walmart and Jet.com. But Amazon certainly has a head start in building a behemoth customer retention engine.  According to Morgan Stanley, Amazon will have nearly 21% of the ecommerce market share by 2016. And research from one analysis firm found that Prime members spend nearly three times as much on Amazon’s goods as non-members do, and they convert 74% of the time.

As a result of this dominance, most retailers have to deal with Amazon competing for their customers. But they don’t have to take it lying down. In fact, retailers can rip a page or two from the Amazon playbook, and make their own customer experience more exciting, helpful, and effective.

Here are five customer retenion strategies to steal from Amazon:

    • Invent your own hoopla. Today’s always-on consumers can shop from the beach, campground or anywhere they happen to be – so why not celebrate Christmas in the summertime? This week, retail giant Target is holding a huge Black Friday in July sales event, a promotion it’s running for the sixth year in a row. While Amazon says its Prime Day’s sales volume will rival the day after Thanksgiving, it’s too soon to say if that will be the case. But now even Walmart is getting into the act with summertime price rollbacks to drive customer traffic. Is there slow season in which your brand could provide some energy and unexpected sales?


    • Push your brand into a “lifestyle.” Being a Prime member is more than free two-day shipping. It’s also a way to listen to music, watch movies and TV, and get special deals on everything from shoes to televisions. By touting the free two-day shipping, Amazon turned many of us into members of a club we didn’t necessarily plan to join, but we enjoy its benefits now that we’re in. Amazon continually adds more goodies to the Prime basket, while keeping the pricing straightforward. Consider whether there are ways to take your brand to the “lifestyle” level. Are the perks of your loyalty program attractive enough to induce membership? Are there other aspects of your customers’ lives where you can be useful, either through new products, content, or curation?


    • Personalization is powerful. Many of us are always logged in to Amazon’s site, without thinking of it much. But we do, of course, notice that Amazon has tracked our interests, no matter how flighty they may be. (Why yes, I am the same person who last week perused three books on urban homesteading.) And they’re so good at using our interests to remind us of what we considered but did not buy, and letting us know what others like us bought, too. Amazon has invested in its engagement data strategy so that its personalization is very targeted, and very effective. Retailers are likely to reap the rewards by creating their own data strategy for personalization. Does your brand have a personalization plan? Are there ways to take it to the next level, like using real-time intent data?


    • Provide shoppers with reviews. Amazon’s just 20 years young, but it has made many of us reluctant to buy something without reading user reviews first. Reviews help shoppers know what to expect before they buy: Do these shoes run large? Is this book good for a four-year-old? Retailers lose $600 billion each year to returns; reviews can help shoppers have clear expectations of a product’s strengths and weaknesses before they buy. (Reviews help with conversion and organic search rankings, too.) Does your site have reviews? Why not?


  • Build for the future. Amazon’s recent push to sell digital TV programs, movies, and music adds another to layer to its traditional focus on selling books, home goods, and clothing. But then digital media has one big advantage: it doesn’t need to be shipped. Amazon pays an average of $4 to ship each box—part of the reason that Amazon still doesn’t make money, 20 years on. Are there things that your brand can sell that don’t need to be shipped? Alternatively, are there changes you can make it your fulfillment process to make shipping faster or less expensive? Amazon Prime has accustomed many of us to free two-day shipping, which has raised expectations for other online retailers. Are there ways to use physical locations to make delivery faster and easier?

Amazon has had a huge influence on the way we buy and the way retailers sell. But much of what’s worked for them is no secret, and summer is a great time to invent, experiment, and think of new ways to delight your customers and begin to build brand loyalty.


Originally published July 14, 2015

Laurel Wamsley

Laurel Wamsley was the Marketing and Communications Manager at Signal, and the editor of Signal's blogs. She worked previously at the University of Chicago, Rackspace, and NPR.

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