A Study on Amazon’s Loyalty Program – Amazon Moments

by Natasha Ambavle |

We can all agree, that Amazon is the undisputed champion in the eCommerce sector. But what most don’t comprehend is that this is not an overnight success story. It is the result of consistent hard work, team effort, and marketing geniuses that developed unparalleled strategies to make Amazon what it is today!

One of these marketing strategies that we will delve into is Amazon MomentsAmazon’s loyalty rewards program. This study will scrutinize the key findings of this loyalty strategy and analyze its strengths and weaknesses along with its impact.

Amazon Moments

With Amazon Moments, the brand adds another dynamic loyalty and rewards engine to its growing lists of Amazon loyalty rewards offerings like Amazon Prime, Amazon Contributor Awards, and Amazon Smile. While the other loyalty offerings were directed at consumers, Amazon Moments is targeted towards businesses. Launched in February 2019, it was designed for other companies/sellers to gain customer loyalty through Amazon.  While the seller and his customer reap the benefits of the program, Amazon takes complete back-end responsibility for a nominal fee from the seller. Available in over 100 countries, Amazon Moments has increased engagement for a variety of apps including a 20x increase in the percentage of first-time payers.

Who are the Beneficiaries?

Amazon Moment was specifically designed to give small businesses an opportunity, resources, and a deserving platform to leverage the benefits of loyalty programs. Often medium to small scale companies refrain from adopting strategies like loyalty offers solely because of the sheer management and execution costs involved. Amazon’s loyalty rewards program was launched to empower these companies and promote small businesses. Another segment that could greatly benefit through this program is companies that sell through other retailers. In the past few years, many small businesses have cropped up and are selling through platforms like Instagram, Tik Tok and Facebook. For small businesses thriving on these platforms, loyalty programs may seem like a far-fetched dream. However, with Amazon Moments they can empower their businesses and offer rewards to their customer base, in a cost-efficient manner.

Who It Isn’t For?

While Amazon has posed no just imposition, however, it is very unlikely that other eCommerce platforms will use Amazon Moments. There is no point in promoting a competitor by using this platform to reward your customers. It is also unlikely that brands with successful loyalty solutions may opt for Amazon Moments. Another segment that is unlikely to switch to Amazon’s loyalty rewards is luxury brands that are highly successful. Amazon is associated with affordability and convenience, neither of these qualities resonates with luxury brands and this is a major reason why this loyalty offering is not that particular segment.

The Advantages

For Customers

  • With Amazon loyalty rewards, the reward/gift options are unlimited. Brands get to choose from a wide range of products and select ones that is relevant to their brand and also appeals to their audience.
  • Customers also trust Amazon as a brand. It is always better to receive a gift from a known and reliable vendor than an unknown one.
  • With Amazon Moments, customers also have the option of clubbing their rewards with other offers offered by Amazon at that particular time.
  • Last but not the least, unlike other paid loyalty programs, with Amazon Moments customers do not have to pay any subscription fee.

For The Seller/Other Brands

  • With Amazon Moments, smaller businesses get an entry into the loyalty world, without having to shell out major capital.
  • Amazon takes complete charge of the technicalities for the brand.
  • The seller has a wide range of reward options to choose from, so the budget constraint is not an issue.

For Amazon

  • Amazon gets paid by the brand or seller that enrolls for the program.
  • Amazon gets access to an extensive database of the customers of its client.
  • Customers usually end up buying other products from Amazon during the redemption of their rewards.
  • Amazon gets free publicity with this program.
  • This program also helps Amazon with further market penetration.
  • Amazon Moments not only helps small businesses to gain recognition in the market but also helps Amazon-the brand, to build brand credibility. (I THINK LAST 3POINTS ARE THE SAME)

 The Disadvantages

There aren’t many drawbacks of the program especially to the customers and Amazon itself. However, there are a few that the seller needs to consider before opting for Amazon Moments.

  • Although Amazon does deliver the API framework to the seller and manages interactions and transactions, it does not provide any strategic insights to the seller. Loyalty programs offer great insights on target group demographics, customer behavior and purchase patterns, but with Amazon Moments, the seller misses out on crucial customer information.
  • According to the Cost Per Action model, the minimum cost of rewards is relatively high. If the seller intends to incentive its customer for every small action, it might turn out to be an expensive affair to the seller.
  • Also, the program has no provisions to ensure consistent customer engagement. Notifying your customers or general communication can be a task. The program limits the seller when it comes to communication, allowing only announcement and redemption messaging.

 However, when you look at the bigger picture, the program has more advantages than drawbacks and since its launch in 2019, it has gained tremendous traction by empowering smaller businesses. Amir Kabbara, Head of Amazon Moments, said in a statement that “Moments removes complexity for developers by packaging reward programs into a simple, self-service console that lets marketers set up campaigns quickly without worrying about reward sourcing, management, or fulfillment.” To sum it up in the words of Aaron Rubenson, Vice President of Amazon, “With Moments, Amazon made it easier for marketers to reward customers for taking meaningful actions, boosting engagement in a cost-effective way.”

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