Loyalty Reward Programs Is the Easiest Way to Grow Business

by Grace Miller |

Loyalty Reward Programs Is the Easiest Way to Grow Business

Loyalty Reward Programs

What is the Loyalty Rewards Program? When you purchase something from a brand, what are the chances you buy from it again? Well, there are many different factors for being loyal or not to the brand. If you purchase from the same store again, you probably have a strong reason to do it. The factors … Read more

Why you and your Business should use Lead Ads

Lead Ads Magnet Image

Getting detailed information regarding your leads is an important part of any business venture that relies on prospecting. That’s why so many digital leaders use lead ads. For their businesses, making sure that we’re collecting email addresses and other Personal Identifying Information (PII), then using that information to keep in touch with them across all … Read more

Why Your Ecommerce Sales Strategy is Incomplete Without a Customer Loyalty Solution

Customer Loyalty

Once upon a time, an ecommerce company could get away with just a simple website that sold products. Then one day the industry progressed to the point that we all needed to incorporate an email service provider. And now, we have Amazon, Walmart.com, and the other retail powerhouses creating new standards for ecommerce fulfillment, price, and service. According to TechCrunch, Amazon accounts for 49% of all ecommerce sales. The closest competitor is eBay with 5% of total ecommerce transactions. This chaotic battle for market share has forced other retailers to get creative with how they use customer loyalty to incentivize their customers.

Ecommerce SalesThe Amazon Effect:

In 2017, Amazon saw $177 billion in sales revenue. This year, they’re projected to clear $258 billion. Features like Q&A, item comparison, and peer reviews have forced smaller retailers to get creative with their own user experience.

They also built one of the most unique customer loyalty programs in retail history. With its innovative paid loyalty model, Amazon Prime has changed the way millions of us shop each year. It’s also very diverse in scope, as Prime subscription benefits can range from free two-day shipping to streaming thousands of movies. And now that Amazon has acquired Whole Foods, it’s become that much more convenient for the customer. And to think it all started with books…

The Issues:

With the dominance of the third party aggregators like Amazon, Google Shop, and Walmart.com, it’s becoming harder and harder to keep a consumer’s attention. So many factors come into play on why this is such a problem.

Distractions:

When your products are being advertised on third party sites, they’re being compared apples-to-apples against hundreds of similar products. Google Shop’s comparison tool places the most relevant goods with the best price right next to your products. Not only that, but customers are channel-hopping across various ecommerce sites, social media, and other sources to get as much information as possible about your product. According to a study done by CommerceHub, 86% of purchasers change channels when buying online. So if your reviews, Q&A, and product descriptions don’t check out, your potential customer has a lot of other options to choose from.

Trust:

customer loyaltyThe cost of acquisition is currently higher than the cost of inflation, a detrimental stat for marketers and ecommerce professionals. This is attributed to lack of trust in retailers and institutions in general. “The trust that consumers have in brands is going down tremendously,” stated Al Lalani, Chief Strategist of Annex Cloud. “Customers are researching more and looking for peer reviews across many channels, thus increasing the acquisition cost of that customer.”

The Solutions:

Though there is no one simple solution to this problem, there are a few strategies that can help your brand better position itself against the competition.

Omni-channel:

It’s so vital for a brand to have a strong presence across all industry-related platforms. That includes a great ecommerce store, third party aggregators, mobile devices, and social media. Once a customer is acquired through a good omni-channel campaign, it’s important to incentivize them to return for future purchases. This is done with omni-channel loyalty. Say you’re a shoe manufacturer and a customer just purchased your shoes on Amazon. Because advertising on Amazon means more cost to you and more distraction to your customer, it’s in your best interest to convince the customer to purchase from you directly in the future. This can be done by incentivizing the consumer with offers like $10 off their next shoe purchase or offering free socks with each purchase.

Retention Through Customer Loyalty:

No matter how you acquire a customer, it’s important to make them want to buy from you again. The cost of acquiring a customer is greater than the cost of retaining a customer, so incentivizing right after the initial point of purchase is your best chance of nurturing that relationship. According to Ciceron, a satisfied customer will contribute on average 14x more revenue to a business compared to a dissatisfied customer. It’s about not only rewarding after a purchase, but incentivizing them when they take actions like posting photos with your products. It’s about breaking out of the points-for-purchase model and building a real community around your brand. When you cater to your customers, they gain a sense of inclusion and are more likely to purchase in the future.

Annex Cloud helps bridge the gap between retailer and consumer. By working with the retailer and creating a custom loyalty solution, we generally see an increased average order value and decreased cost of retention. The old days of getting by on an ecommerce site alone are behind us. It’s an absolute necessity for retailers to incentivize their customers with customer loyalty. If you either don’t have a loyalty program or you just want to get more out of your program, contact us and we’ll be sure to help you out!

Amazon Cash: A Way Towards Cardless Payments

Amazon Cash

A broken online shopping experience is a real killjoy for e-commerce operators as well as shoppers. Studies have shown that tricky, complicated, and inconvenient payment options can be a deal breaker for an online shopping experience. It has been observed that 8% have abandoned the cart as they felt that there were not enough payment methods. Amazon has decided to respond to this rising alarm of inefficient payment modes. Lat week, it announced the launch of Amazon Cash to reduce the need of card payments by opening a channel for customers to pay with cash.

This free service lets shoppers who are credit card-adverse pay online through a simple process. Customers will have to go the Amazon Cash site and press “Get your barcode,” which they can receive via text or print out at home. Customers then will have to present the barcode at a participating retailer — which includes CVS, Sheetz, and Speedway. Once at the store, customers will have to show the cashier the barcode to scan and pay the amount they want to be added to their Amazon balance in cash. With the Amazon gift card, which gets added to their account, customers can purchase items on Amazon.com. Customers can add between $15 and $500 in a single Amazon Cash transaction; daily limits vary by retailer. This cash will get applied immediately to their online Amazon account.

Besides, as a promotion through May 31, Amazon is offering a $10 free digital credit to those who add at least $50 to their Amazon Balance. It’s important to note that customers won’t be allowed to withdraw the cash from their balance. All these activities can be tracked through the individual accounts of customers. The following image will help you in grasping this functionality.

amazon cash

The Reasoning for Amazon Cash

A little observation is enough to conclude that neither the functionality nor the conceptualization of Amazon Cash is a maverick innovation. PayPal has the My Paypal Cash card, which has a similar partnership with retailers that enables its customers to make cash payments on multiple sites. Even Amazon’s competitor, Wal-Mart, has launched a Pay with Cash initiative for online purchases back in 2012.

The secret why almost everyone in the online business domain is opting for generating this cardless payment framework is in the insights. According to a 2014 survey by Princeton Survey Research Associates International, 63% of the 1,000 millennials polled are living without credit cards. The total population of card-free Americans is likely well below 25%. Further insights tell that 7% (9 million) and 19.5% (24.5 million) of U.S. households were unbanked and underbanked, respectively, in 2015. It also found that 62.5% of unbanked households used cash to make purchases. Looking at such data, it’s not surprising to see that Amazon wants to use its Amazon Cash as a tool to reach people who don’t have bank accounts and cards. Of course, it also aims to target the set of people who don’t want to use their debit or credit cards while shopping online due to security purposes.

Even though for time being Amazon Cash is currently available for Americans only, Amazon can think about expanding it in emerging economies where digitalized payments are still not a norm. Amazon’s recent launch of its Prime services in Mexico, where only 44% of adults have a bank account, is a sign that it has already made a move in that direction. And Mexico is not alone. India has more than 165 million unbanked citizens. The situation of Southeast Asian countries is more or less similar.

Another important point to consider here is that Amazon has tried to run promotional campaigns and offered free Prime membership to low-income households to get a grip over that demographic segment. It has seen positive results too. Baird analyst Colin Sebastian wrote that Amazon Prime membership is increasing “fastest among lower-income householders, which should drive continued incremental share gains at the expense of more discount-oriented retailers”. Amazon Cash can further tighten this hold over the low-income group by giving it an easy payment option.

Concerns with Amazon Cash

Though everything about Amazon Cash looks picture perfect, some concerns make their presence felt. The first point is, about 28% of unbanked customers said they don’t trust banks while a similar number said avoiding a bank gives them more privacy. Now, it’s very difficult to find out how those who don’t trust banks would want to give the online retailer the personal information required to open an Amazon account.

The second point is that it’s simply not that troublesome to buy an Amazon gift card and then type in the numbers to add it to your account. It’s true that Amazon Cash is a new way to pay that some consumers may find more convenient. But it looks like a lot of effort for Amazon to come up with a way to shake the last nickel out of the pockets of customers who were slightly outside its reach. If it doesn’t get translated into sales, Amazon Cash may turn out to be a solution which was created to solve a problem that didn’t really exist!

4 Ways Of Building Brand Loyalty Through Amazon

Brand Loyalty Through Amazon

With almost 310 million active customers, Amazon has become unavoidable for online sellers. However, brands have used it as a sales channel and not as a loyalty building tool. That’s understandable: with over two million third-party sellers competing for attention on the site, creating a lasting and impressive brand impression on the minds of customers is as hard as imagining a new color. Besides, Amazon has never been seller-focused. It lays great importance to products. And in that quest, it puts details about your products first – and merchant information second. The situation becomes even darker when we realize that on Amazon, your [visible] personality only extends as far as the little 100-pixel wide logo that they allow you on your product listing. The consequence of all these not-so-charming factors is the idea that Amazon cannot foster loyalty to your brand. But Amazon offers a lot more than the people’s awareness about it, which makes it possible to generate brand loyalty through Amazon.

Amazon Helps In Deciding a Product’s Pricing

The irony with customer loyalty is that it makes people less sensitive towards cost, but product prices play a significant role in making them loyal in the first place. For many people, cost is a deciding factor that facilitates their entry into the economic spectrum of the brand. The research done by Romaniuk and Dawes has shown that one of the vital product attributes that affects customer loyalty and repurchase behavior is products’ price. Customers are sensitive to a product’s price and often make the buying decision based on that.

It’s then obvious that setting the correct product price has a lot to do with your brand loyalty prospects… and it’s often difficult to decide what the right price is for your products in a new market, as factors such as taxes, duties, currency exchange, cost of shipping, returns, and customer support need to be evaluated. But with the help of Fulfillment by Amazon (FBA), brands can easily and accurately calculate the fulfillment fees, including storage, picking, packing, shipping, and returns. By adding these costs to product cost and comparing estimated price to similar products in the target market, brands can gauge the possibility of repurchase. It can be very helpful when trying to build brand loyalty through Amazon.

The Amazon Dash Button Helps Guarantee Repeat Purchases

The Amazon Dash Button is a key-fob-sized device, which can be placed anywhere in a user’s home. It sticks near the user’s washing machine, dishwasher or even toilet and through Wi-Fi and the Amazon Mobile App, reorders the user’s product of choice at the touch of the button. In short, it is helping customers in replenishing those items on which they are running low. Take a note that loyalty’s actual finalization is in generating more and more reorders. Dash Buttons act as a catalyst in achieving this kind of brand loyalty through Amazon. Moreover, they are super easy use. According to Amazon, orders placed via Dash Buttons have grown fivefold over the past year. That’s precisely why brands including Cheez-It, Coca-Cola, and Philips Sonicare have been signing to launch their own Dash Buttons. Looking at the staggering results, Amazon now offers over 200 different Dash Buttons.

It’s then aptly clear that signing on to Dash button is a win-win scenario for businesses looking to build brand loyalty through Amazon. This is because if observed closely, this Dash button proves that loyalty can in effect be sold. Remember that customers have to buy Dash buttons at a cost of about $5 per button. Dash bonds customers to products by making people habitual repurchasers; thereby boosting the share of wallet. If executed well by understanding customers’ needs, it can hold a key in inculcating brand loyalty through Amazon.

Establishing Proper Communication Channels

A customer feels valued when brands notify them or send out relevant communication. And generally, loyalty is impossible to achieve without this feeling of value. Amazon knows this well. As soon as the customer buys, Amazon allows brands to send messages to complete orders and handle customer service inquiries. This is the narrow opening through which any brand can establish its persona in the eyes of customers through interesting texts and superlative customer service, as it’s also a rich platform to respond quickly to the customer’s inquiries. Auto-responders can bring this scenario to reality. And how valuable this is in keeping your customers with you can be imagined through the stat, which says that 52% of consumers have switched providers in the past year due to poor customer service.

Data Collection

Amazon shipped 50% more items this holiday season than last for third-party vendors and doubled the amount for 2016 overall. Clearly, people’s buying from the third party vendors is on the rise. Naturally, such a large chunk cannot be overlooked. But it demands deep analysis of the behavior of those third party buyers. Amazon can help brands to know the best third party sellers in specific product categories. Brands can also drill down to look at customer reviews to better understand which product features customers appreciate. However, Amazon usually doesn’t provide much data to its sellers and brands. That’s why the Native Receipt Scanning is so helpful. Brands just have to include it into their loyalty programs to get information about third-party purchases at their fingertips.

Native Receipt Scanning both simple flows

Suppose that a member of the certain loyalty program is buying from other brands also. Due to the integration of the Native Receipt Scanning, that loyalty member can earn points for submitting receipts–digital or physical–to the company. Once he gives the receipt, the brand with the loyalty program can see exactly which products from other brands were purchased by its member. It can analyze the difference between its products and the third party products that he has been buying, in addition to other purchase data like total cart value, location, time, and more. Once it knows the exact cause of his inclination towards the third party products, it can make effort to bring that to its products to make them more likable and desirable- the point from which the link between purchase and repurchase springs.

It’s pertinent here to know that according to Romano & Fjermestad, CRM is a combination of hardware, software, process, applications and management commitment to improve customer service, retain a customer and provide analytical capabilities. Amazon is ticking all the boxes. The technology-equipped applications and analytics are making it possible to come up with a well-rounded strategy to build brand loyalty through Amazon. As loyalty now is an economic necessity and a competitive necessity for brands, the need to look at Amazon beyond the mere biggest sales channel through the prism of loyalty should top the online sellers’ priority lists!

Amazon Wants to Pick Shoppers’ Outfits with Amazon Outfit Compare

amazon outfit compare

It’s normal for a shopper to send pictures of different outfits to his or her friends, asking for input and guidance. It’s less common, though, to message an Amazon employee for advice. Amazon is looking to change that, with the goals of increased engagement and upsells, with its new Amazon Outfit Compare feature.

Amazon Outfit Compare is a functionality in the latest version of their app that gives Amazon Prime customers fashion advice. A user submits two photos, and receives feedback from Amazon-employed stylists in a matter of minutes.

amazon outfit compare

According to TechCrunch, the stylists rate the outfits on a number of variables, including the fit of the clothing, which colors look best on the user, how the outfits are styled, and what’s fashionable at the moment.

amazon outfit compare 2

Once the stylists have decided, the winning outfit is rated on a three-level system consisting of the feedback, “It was a close call,” “We like this better,” and “Definitely pick this one!”

Read on below for more about Amazon Outfit Compare…

While Amazon Outfit Compare doesn’t explicitly push any Amazon products, it seems that it could boost revenue in a number of ways.

  • Amazon Outfit Compare users will likely spend more time in-app, increasing the likelihood that they’ll encounter something they want to purchase.
  • The feature could boost Amazon’s reputation among fashion shoppers by providing potentially valuable information. This has also been one of Amazon’s Style Code Live’s goals.
  • There’s room in the future for Amazon Outfit Compare feedback to include purchase suggestions for items to go along with the submitted outfits, or for it to store data from the submitted pictures and use it for suggestions. However, it’s clarified that the photos are only viewed by Amazon staff, and deleting them from the Amazon Outfit Compare feature will also delete them from the app and any copies associated with a user’s personal account.

This feature may be entertaining, but I wonder if shoppers will actually use it. Fashion fans often use social media and online communities to get outfit advice from strangers, but those interactions generally happen when the user knows and likes the community’s taste and reputation. Given that–despite many of its efforts–Amazon still isn’t really known for offering a curated, elevated fashion shopping experience, I’m doubtful that the trend-conscious will be as eager to get advice from its employees. It’d be a different story if a site with a stronger style reputation, whether it’s Net-a-Porter or ASOS, did this. Still, given the size of Amazon’s user base, this Outfit Compare feature will certainly get some mileage.

While Amazon Outfit Compare isn’t a proven success yet, many other ways of using visual user generated content to produce sales are.  Visual Commerce–including shoppable Instagram through Shoppic,me, shoppable multimedia user generated content displays, and more–boosts engagement and orders through shoppers’ images.

Amazon’s Spanish Language USA Site Is Ready To Say Hola

amazon boxes

Though there is an option on Amazon China that anglicizes some of the text, for the first time since its inception, Amazon has taken the bilingual approach to its flagship site. Amazon’s U.S. site, not its .es counterpart, will be available in Spanish as well in English.  Here’s what else your should know about Amazon’s Spanish language USA site…

How Amazon’s Spanish Language USA Site Will Work

The site will allow the visitors to toggle between the English and Spanish versions of the same pages. They can see product listings and information in both the languages. The e-commerce giant has even added an easily accessible language settings option on the website’s interface, right next to the “Accounts & Lists” drop-down menu. The following image will give you a fair idea about the look of the Spanish version of Amazon’s USA site.

amazon spanish language

An Amazon spokesperson said:

“Customers will be able to shop, browse and search for millions of products, view their shopping cart, and place orders in Spanish on Amazon.com and through the Amazon Mobile Shopping app. If you don’t see the option yet, you’ll get it soon enough. Amazon will continue rolling out the feature to more accounts over the next few weeks until everyone can access the new language option.”

Of course, Amazon is no slouch when it comes to providing multiple languages based websites to expand its scope all across the globe. It has provided dual- or multiple-language shopping opportunities on its sites in Canada (English and French), and in Germany (German, English, Dutch, Polish and Turkish). The online retailer already caters to Spanish speakers with both Amazon.com.mx (for customers based in Mexico) and Amazon.es (for customers based in Spain). But this move of adding Spanish as a second language option to bring Spanish version of Amazon’s USA site is a strategic move which has germinated after a thorough analysis of the opportunities and threats.

Opportunities for Amazon’s Spanish Language USA Site

As per The Guardian, with 41 million native Spanish speakers and 11.6 million bilingual Spanish speakers, only Mexico has more (121 million) native Spanish speakers than the US, which is ahead of Columbia (48 million) and Spain (46 million). The language is also the third most widely used on the internet, though less than 8 percent of traffic is in Spanish. Besides, Morgan Stanley has suggested that retail spending by Hispanic-Americans will rise by 1.6 percentage points by 2020 as opposed to millennial spending growth of 0.6 percentage points. The potential of the Hispanic buyers both in terms of quality and quantity, thus, is as straight as the line drawn with the ruler. The move of bringing Spanish version of Amazon’s USA site appears to be much more integrated with the larger plan of attracting the Spanish-speaking community when we consider that earlier this week, Amazon launched its popular Prime membership service in Mexico, giving customers benefits such as free shipping for $46 per year.

Questions About Amazon’s Spanish Language USA Site

Though Amazon has been the most dominating color on the retail canvas, analysts and observers are saying that it may be reaching a saturation point for English-speaking Prime customers in the US. According to analysts, US Prime membership has grown to more than 60 million people. If it has to keep the stagnation at bay, growth is the most critical factor at this juncture for Amazon. This concern was at the helm why it brought Prime to China and India last year. It made sure that Canada, the UK, Spain, Italy, France, Belgium, Germany, Austria, and Japan will also see the Prime service. Amazon is clearly looking at this language addition as a way to reach out to more and more people to strengthen its customer base.

But having said that, there are people who have begun to raise questions about the efficacy of this Spanish version of Amazon’s USA site. And there are reasons for that questioning. 80% of native-born Hispanics younger than 18 years-old speak only English at home. Moreover, according to Nielsen, 35% of all Hispanics living in the United States speak both English and Spanish at home. All these numbers are making it difficult for some industry experts to see business acumen and profitability in this logic of Amazon’s Spanish language USA site. But history has proved that Amazon has rarely gone wrong with its decisions!

Note: Considering how important Amazon is for the future of the retail industry, we always keep a watch on its activity. Go through this blog to know how Amazon banned incentivized reviews. Prior to that, Amazon had punished fake reviews too. We have talked in depth about that in this blog.

Potential Problems for Amazon Go, and Other Sellers Skipping Lines

Amazon Go

Retailers all across the globe have been grappling with the issue of improving the customer experience in the fullest sense of the term. A serpentine line leading up to the register, especially during the holiday season, can be a deterrent to great customer experience. Merchants have known about this problem for a while now. While it’s commonplace for grocery stores and drug stores to address it with self-checkout stations that count items by weight, innovative solutions in other retail sectors haven’t been embraced too widely. Some retailers definitely are trying to address the line problem, though.

Several years ago, Nordstrom, among other sellers, embraced mobile POS (usually accomplished with a tablet) to disperse lines, resulting in a 15% sales gainApple launched an Apple Store app to enable people to pay at the company store without the interference of register or a clerk. Most recently, Rebecca Minkoff has partnered with a technology called QueueHop, which unlocks a product’s anti-theft tag after a payment is made via an app. While all of these solutions are more convenient for shoppers (and thus more lucrative for sellers) than waiting in a regular line, Amazon has just gone above and beyond with a new concept it’s calling Amazon Go.

 

Introducing Amazon Go

 Rather than even making shoppers manually scan items themselves, Amazon Go operates on a promise of “Just Walk Out.” In other words, there are no registers, and there is no checkout. Shoppers now can go to the store, take what they want into the cart and leave the store. Items in the cart will be billed to their Amazon.com account. As most details are not disclosed, it’s a little hazy. But it is believed that Amazon Go will make use of computer vision — the kind of technology that allows to see what people are looking at and what they’re picking up, sensor and machine learning technologies. Note here that these are the technologies that are found in self-driving cars. Now, let’s see how exactly Amazon Go will work.

Amazon Go

How Amazon Go Works

First, people will have to open the Amazon Go app and place it to a sensor located in the entrance way.  The technology will automatically detect the items that customer has selected in his cart as well as the items that he has put back on the shelves. It will be done by the virtual cart, which is installed in the app. When a customer is done with shopping, he can ignore the need of going to the cash counter. He can simply walk out of the store as the bill will be charged to his Amazon account. He will get the receipt as well.

Clearly, Amazon Go is an effort to differentiate in-store experiences on a whole new level, but a few other things may have prompted its launch. t’s obvious that Amazon is trying to expand its hold over a brick and mortar segment. The decision of opening more bookstores is a hint towards that effort. Naturally, it wants to smooth the in-store customer experience. The innovation in the Amazon Go grocery store may pave the way for it. Besides, for grocery products, it’s an open fact that people want to go to the store to examine what they’re buying and ensure the freshness and quality of their purchases. Not to forget that maintaining the inventory of such products is a dreadful task as they are perishable. While online grocery shopping via Amazon Fresh, Wal-Mart, Instacart, and local stores is a viable market, shoppers aren’t nearly as open to it as they are to purchasing other items online.

grocery delivery
Selling perishables online can be a tricky business, which is why Amazon’s move into brick and mortar makes sense from several angles.

Making online grocery is also much harder than delivering books or phones. That’s why it is believed that Amazon may open 100 such grocery stores in 2017. It’s a no-brainer to guess that stores can’t last long if their customer service leg is injured.

The last, and perhaps the most important, point is this app is capturing the live shelf activity of the customers. Now, it will allow Amazon to track people, and thus, their data. But this data can be used for many other purposes apart from targeting customers to get the upsell. The collected data on how customers move within a store and what they buy can help Amazon in guessing purchasing trends, deciding how to rearrange a layout, and creating better reports for its shareholders. That’s why data gathering has always been in the company’s interest.  

Potential Problems

Having said that, there may be some cracks which may appear while implanting this path-breaking app. It’s a possibility that Amazon may mistakenly charge a customer for something he/she didn’t buy. Considering the mistakes that pop up from time to time in their well-honed e-commerce operations, this seems probable. When it happens, it’ll certainly cause outrage. 

What can complicate the matters further for the Amazon Go system is the fact that grocery shoppers often put things back in the wrong aisle. Also, there are certain items, like vegetables, which are priced by weight. These may be harder to track. Similarly, if a family comes to shop in the store, it should get one dedicated virtual cart. Otherwise, they will be charged individually based on the smartphone in their pocket. Of course, theft–whether accidental or purposeful–will also be a concern.

While Amazon Go’s enhanced technology will provide many safeguards to this problem, studies have shown that “traditional” self-checkout usually increases shrinkage. A report from this summer used data from almost 12 million shopping trips to determine that self-checkout raises the rate of loss by an average of 22%. The study also showed that consumers who are generally honest and not inclined to steal are much more likely to when they’re interacting with a machine “simply because they can, and do not feel it is as wrong when there is no human interaction.” Furthermore, when self-service tech fails and frustrates shoppers, they feel additional motivations and/or justifications to disregard the law.

Cautious Excitement

Of course, considering the sheer might that Amazon exerts and looking at the technological power that it can buy, there are many reasons to believe that they’re uniquely placed to tackle these issues. While Amazon Go is a novel concept that’s set to debut elsewhere in 2017, we won’t be that surprised if there are a few missteps along the way.

Considering how important Amazon is for the future of the retail industry, we always keep a watch on its activity. Go through this blog to know how Amazon banned incentivized reviews. Prior to that, Amazon had punished fake reviews too. We have talked in depth about that in this blog.

Sellers Sued Over Fake Reviews on Amazon

fake reviews on amazon

The trouble of fake reviews on review platform has always lurked over the landscape of e-commerce. While ratings and reviews are vital for providing more product information, fake reviews raise serious question marks as to the credibility of ecommerce websites. Once that credibility is corroded, the demise of the business is not far. Even giants like Amazon aren’t immune. That’s why  the Seattle based ecommerce monarch, is preparing to go all guns blazing against fake reviews on Amazon.

Since the beginning of 2015, Amazon has sued over 1,000 people—but those sued people were reviewers. Now Amazon is thinking to bring the very people that help the company make money on its radar–sellers. The company is in no mood to spare those sellers who are ultimately responsible for the fake reviews on Amazon. The moving away from targeting sites like paidbookreviews.org and toward people on the Amazon platform shows how serious Amazon is about this whole issue.

In this serious heat, Amazon has sued three of its sellers: a Chinese company called CCBetterDirect, Michael Abbara, and Kurt Bauer. It was found that fake reviews comprised up to 40 percent of their stores’ total reviews. It’s quite clear that violations were gross and amassing.

Corporate Counsel reported that Amazon commenced arbitrations on May 27 against these three sellers. Amazon’s claims will be heard by the American Arbitration Association.  The core of Amazon’s allegation is that all the three sellers have violated contractual obligations to Amazon along with the breach of the Federal Consumer Protection Act and the Lanham Act. Amazon accuses them of creating fake accounts to leave positive reviews on their own products. Amazon is asking for the defendants to be banned from selling products on any of its sites or accessing its services. The suits also ask for the profits the sellers made on Amazon, attorneys’ fees, and damages exceeding $25,000.

According to the insiders and experts, reviewers may have helped vendors in the violation of their contract by reviewing products due to the allurement of discount coupons and adding items to an Amazon wish list at a vendor’s request…pretty innocuous acts!

It’s not that the e-commerce giant is only thinking about the punishments. It is trying to be proactive rather than reactive by creating ways to stop fake reviews on Amazon. Some of the measures, such as ranking of trusted reviews, developing algorithms that iron out the fake reviews, social media login for websites i.e.sellers,individuals and suspending accounts have already seen a day of the light. It has also tried out “verified purchase” designation of people who’ve bought the product. But foolproof and lacuna free execution of these measures may take time…and till then, Amazon will have to rely on their half-baked anti fake reviews system.

The law will take its course in the above-mentioned lawsuit. Hopefully, the decision will go in the favor of Amazon by sending a strong message to such fake reviewers and sellers that one more attempt and they will be behind the bars.  Indeed time is ripe to nip them in the bud.  Reviews are on the verge of becoming illusions as the correlation between user reviews and the actual product quality is diminishing with each passing day. Mintel’s observation, thus, is not at all surprising that almost 70 percent of Americans ask for other people’s opinions online before buying anything, and yet only 59 percent trust the actual recommendations.

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Online Reviews

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Four keys to Amazon's marketing success

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Keys to Amazon's Success

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