Amazon's Choice: Frictionless Shopping

“I’m sorry, Dave. I’m afraid I can’t do that.” When Stanley Kubrick introduced the sentient computer HAL 9000 in his 1968 classic 2001: A Space Odyssey, the film popularized the concept of Artificial Intelligence and human/computer intercommunication. A little more than 40 years later, major advancements in speech recognition and natural language processing were realized when Apple incorporated Siri into the iPhone and Google launched Voice Search in 2011. Now having a conversation with your computer or mobile device is commonplace, whether you’re trying to find the best route home or place a take-out order. In 2014 Amazon released its own voice-enabled device, Echo, to allow consumers to seamlessly absorb media, control other IoT (Internet of Things) devices, and, of course, shop. Amazon being Amazon, continues to innovate and further reduce friction on the path to purchase with Amazon's Choice.

Voice-Enabled Shopping with Echo and Alexa

Amazon Echo is voice-controlled device allows users to shop from home using their voice to order items. Echo has been met with positive reviews, with over 8.6 million estimated devices sold to date. Those estimates have pegged 2016 revenue from Echo devices and Echo driven ecommerce transactions at $1.3B, growing 10x to over $11 billion by 2020; the majority of the revenue mix would be coming from ecommerce transactions placed through the voice-enabled devices. Therefore, it is imperative for brands to be aware of Echo and how to best position themselves to take advantage of this billion-dollar opportunity as well as the new opportunities that may arise from this type of frictionless shopping experience in the future.

Download our guide: Amazon’s Choice: A new eCommerce Opportunity

Product Discovery with Amazon’s Choice

First, it’s important to understand what happens when you ask Alexa (the name of the Echo voice assistant that speaks with shoppers, similar to Siri) to order something for you. Amazon realizes, of course, that the average person doesn’t use exact product titles to describe what they want. For example, “Alexa, order Huggies Snug and Dry Diapers, Size 1, 112 Count” is quite the mouthful. So the Echo device uses advanced natural language processing to understand what the shopper wants and turn it into a product recommendation. To further assist the Artificial Intelligence experience, Amazon created a new way to feature products called “Amazon’s Choice.” If a product is “Amazon’s Choice” a small icon appears above the title on the product page. This icon could also influence those shopping via a web browser or app; not just shoppers using their Echo. We have observed banner placement on top of search results to highlight Choice items. Amazon announced Amazon’s Choice quietly more than a year ago with barely any press pick up. Echo’s integrations and implications were not well understood at the time of launch.

Getting an Assist from Alexa: How Amazon’s Choice Works

So how does Amazon’s Choice work with Alexa? Let’s stay with the diapers example.

On September 5th, Amazon’s Choice for the search term “diapers” was indeed “Huggies Snug and Dry Diapers, Size 1, 112 Count” as mentioned above. If you say to the Echo device, “Alexa, order diapers,” there are three possible scenarios that would result.

  1. If you have ordered diapers before, Alexa will read out your most recent item ordered and the price
  2. If you have no order history on the search term, Alexa offer you Amazon's Choice (Huggies Snug and Dry)
  3. And if you have no order history on the search term and there is no Amazon’s Choice, Alexa will offer you the #1 organic search result

Before placing an order Alexa will ask you, “Should I Buy it Now?" If you say yes, the item is ordered and confirmed. If you say no, she will either offer another item or else inform you that you can review it in the Alexa app.

Clearly, the Amazon’s Choice designation is highly desirable, removing opportunities for Echo shoppers to bargain hunt or explore other brands. But how does a brand become Amazon’s “Choice”? Unfortunately, the algorithm Amazon uses to determine its “Choices” is still largely a black box, and it does not appear Amazon is making the “Amazon’s Choice” tag available for purchase. What we do know is that product rating and shipping speed are factors, and we suspect item profitability is an essential weighted factor in the algorithm as well.

Clavis customers: please contact your eCommerce Consultant to request a custom report of Amazon Choice results for your nominated search terms.

Why does Amazon's Choice matter for Brands?

Brands need to constantly be aware of changes to Amazon’s many storefronts and features. Each new addition creates opportunities to engage with shoppers and to drive sales in the online channel. This could be the launch of Prime Pantry, the national roll out of Prime Fresh, Amazon Prime Now, or Amazon's Choice.

The key foundation of capabilities and resources needed to succeed in the online channel will include measurement and analytics. The concept of setting goals and key performance indicators (KPIs), and then measuring and analyzing your ecommerce performance against these KPIs needs to be included from the very start of any program. It is imperative for brands to maximize the opportunity to engage shoppers by providing detailed product information that answers their questions and helps shoppers visualize using their products in a tangible, authentic way. Brands that excel at ecommerce KPIs such as Ratings & Reviews and Search are already seeing their hard work rewarded in the Amazon's Choice program, as evident by the general performance of Amazon's Choice products.

Download our guide: Amazon’s Choice: A new eCommerce Opportunity

Danny Silverman
Article by:
Danny Silverman
Marketing

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