Category: website analytics
Jessica Porges

What Digital Marketers Can Learn from Amazon’s Purchase of Whole Foods Market

My kids are back in school, and Amazon just closed their deal to buy Whole Foods Market. What do these events have to do with one another, you ask? A lot.

As with all things Amazon, their focus is on me—the customer—and my experience. The more they know about me, the more relevant my experience with them becomes. To that end, enter Whole Foods Market.

The tech giant’s $13.7 billion purchase of Whole Foods has sent shock waves through the grocery industry and suspicions among Whole Foods loyalists who have concern about how their shopping experience—or the quality of the products they love—might change. But so far, the takeover has been all upside for consumers.

According to Bloomberg.com, Amazon spent its first day as the owner of a brick-and-mortar grocery chain cutting prices as much as 43 percent. In the coming weeks, the Whole Foods rewards program will be rolled into Amazon Prime for added savings and in-store benefits. This affords Prime a valuable new perk to attract subscribers and will encourage Whole Foods shoppers to buy more—according to a survey by Morgan Stanley, 62% already have a Prime account. And 1010data found that Prime members have deeper pockets at Whole Foods than non-members, spending an average of $306 more over a 12-month period.

Of course, as I eluded to, the strategic implications of Amazon’s purchase of Whole Foods go much deeper—the acquisition offers its buyer a lot more value than the margins on organic avocados and rotisserie chicken. I’m talking about data.

Take an (Amazon) journey with me

Amazon already knows that I’m likely a mom of young children based on the diapers I order, the shows and movies we stream, and the parenting books I buy through my Prime membership. They also know I’m busy and seek ways to make my life more efficient, e.g. the Instant Pot pressure cooker I purchased. And now, if I shop at Whole Foods and use my Prime membership to get in-store perks and discounts, they will also be able to track my offline grocery store behavior and tie it all together. With massive amounts of data from Whole Foods shoppers, Amazon will ultimately be able to tailor the grocery shopping experience—and much more—to the individual.

Let’s pretend for a moment I didn’t own that Instant Pot just yet. Maybe I had just stalked it a few times online (since everyone is talking about them). Amazon might send me one of their high-converting emails promoting the Instant Pot, maybe with same day delivery (in some areas). They might kick in some trending one-pot recipes for beginners, with a list of ingredients I could also order and have delivered to my doorstep by upgrading to AmazonFresh.

The Amazon email I received after checking out the Instant Pot.  You can easily see how it would make sense to include recipes. 

Amazon’s goal is to make it so easy for me to get my groceries from them that I continue to do so (as opposed to shopping at the other grocer to which I’ve been loyal my entire life). They can send me weekly emails with Instant Pot recipes and links to order the ingredients. Maybe they’ll even upsell me on some Instant Pot accessories, like silicone fingertip mitts and that popular glass lid.

But they’ll also be able to learn what perishables I buy each week (because we never seem to have enough yogurt drinks or string cheese for my kids), automate it for me so I don’t have to even think about writing out a long grocery list, and deliver the food to my door (or have it ready and waiting for me in a locker at Whole Foods).

Amazon is a master of the upsell, using a highly sophisticated algorithm to recommend the right products to the right customers, at just the right times. Their treasure trove of data enables them to analyze behavior from customers and use this information to recommend products to those shoppers as well as other shoppers with similar profiles. The company has integrated recommendations into nearly every part of the purchasing process from product discovery to checkout.

They also dole out recommendations through email. Did you know that Amazon’s email marketing program analyzes the success of various campaigns and drives only the highest performing emails to a customer’s inbox? Smart. And now, whether shopping on Amazon.com or in Whole Foods retail locations, shoppers’ unique Prime identifiers are keeping track of all their activity, adding them to specific customer segments that can trigger personalized emails, messages on the website, retargeting ads and a multitude perks and offers.

How to think like Amazon

What can marketers learn from this tech behemoth with the potential to know everything there is to know about my movie preferences, lifestyle choices, kids’ snacking habits and my grocery aisle behavior? Regardless of the industry you’re in, your customers are engaged in a journey, and it’s your job to optimize the key decision points along their route with Amazon’s ninja-like precision. Here’s how to do it.

Map it out. List the key decision points along your customer’s journey and the steps necessary to take your desired actions. In my Amazon/Instant Pot example, that could include:

  1. Getting me to add the Instant Pot to my cart—ideally with add-ons
  2. Purchasing the Instant Pot
  3. Opening an email with groceries to buy from Whole Foods to make my first Instant Pot meal
  4. Adding those groceries to my cart
  5. Purchasing those groceries (either for delivery with the upsell to AmazonFresh or pick-up at Whole Foods)
  6. Subscribing to an auto-ship or weekly auto-order to pick up at Whole Foods
  7. Referring friends/family to Amazon Prime, AmazonFresh, etc.

Think about the metrics. Use analytics tools to determine a baseline for your online and offline metrics at the conversion points currently implemented.

Implement technology. You have data and you have a lot you want to do with it. Now you need the right technology to make it happen. Most of us don’t work for a company with the resources of Amazon, with several dozen people to build and optimize internal systems to power their customer experience. But, you can do the same with the right tool at the heart of your customer experiences.

For example, let’s talk about Tealium. Tealium has a suite of tools that allows you to gather data from various online and offline sources (Tealium IQ Tag Manager), slice and dice your consumers into segmented groups, and then share that with other systems both for action and analysis (Tealium Universal Data Hub). (You can learn more about tag management in our earlier post, 3 Tag Management Systems To Make Your Life Easier.)

Tealium allows you to ingest multiple data sources, stitch them together, and then push meaningful data into other systems to trigger actions or to analyze for insights.

If I’m looking at the Instant Pot but haven’t yet pulled the trigger, I’m placed in a group that will be encouraged to make the purchase via remarketing and retargeting tactics.

If I decide to walk into Whole Foods and pick out my groceries the old-fashioned way, I’m incentivized by perks to reveal my Amazon Prime membership and, when I do, my website activity and in-store purchases become tied to the same member number and united in Tealium.

From there, I can be put into another segment of customers, which may trigger certain personalization on the website that prompts me to share my experiences, sign up for perks and more.

It’s likely I fall under a few different marketing categories: “high disposable income”, “young children”, “healthy lifestyle”, “tech gadget lover”. Because Amazon doesn’t want to flood my inbox, they will choose the most successful of the emails that are relevant to me that week, e.g. “top toys for children” or “best newly released workout videos” to increase the odds of me opening it, clicking through and potentially converting.

Applying Tealium to your customers’ journey

No matter your industry, multi-channel analytics, personalization and re-marketing are your best digital marketing tools for driving conversions. Using a tool like Tealium enables you to tie customer data together and activate next steps. Let’s look at a few examples.

Hospitality

If available, I tend to stay at Ritz-Carlton hotels when I travel. When I book my room online, I log into my existing account and enter my member number to earn rewards. That gives Ritz-Carlton at least two unique identifiers to analyze my behavior and market to me in a more personalized way. Using a tool like Tealium, they can tie me to the types of rooms I’ve booked or upgraded to in the past from their CRM and tailor an “upgrade now and save” message to me.

Tealium then tells their email service provider (ESP), such as Salesforce Marketing Cloud (SFMC), to send me that message as part of my confirmation email, or it tells a personalization tool like Optimizely to give me this message on the confirmation page. Or, both—it can serve up the upgrade message on the confirmation page and, if I don’t react, include it in the confirmation email. Perhaps the message comes to me before I even book the room. If Tealium sees that I didn’t choose the upgrade in the booking funnel, it could tell a tool like Yieldify to inject a targeted message in the booking process. It could also learn from the CRM that I’ve dined at their hotel restaurants and tell SFMC to send me a pre-arrival email with available dinner times during my stay.

By targeting messages at key points in the conversion process, such as after a room type is selected, you can improve the customer experience and better meet your business goals.

Real Estate

Opendoor.com is a relatively new company that buys and sells homes in a streamlined fashion– they supply a seller with a firm offer within 24 hours that the seller either accepts or rejects. After Opendoor owns the home, they make any necessary updates or renovations and then list the home in their inventory online. Anyone interested in viewing the property can gain access instructions through their mobile app.

Let’s say I’m in the market for a new home, so I download the Opendoor app and set my search criteria. I go visit a few of the homes on my list, but none of them are the perfect combination of the features I want. As I leave each home, the app detects I’m leaving the area and sends a push notification to complete a short survey providing feedback on the home, perhaps using a tool like ForeSee. ForeSee then sends that information to Tealium. Did I love it, was it missing something? Tealium sends this data to Opendoor’s recommendations engine, to help make better recommendations to me (and others like me) to view other properties. At the same time, the data could even be combined with other data and sent to Domo, to help Opendoor analyze and select the appropriate features to look for in (or add to) the subsequent homes they invest in, getting close to a “just-in-time” model within the pre-existing real estate market.

Healthcare

As a mom of two kids, I’m a frequenter of Urgent Care. Perhaps at my most recent visit, I opted in to receive newsletter communications from the health system. These emails may contain general tips on staying healthy, but Tealium can help connect the ESP to the CRM so that the email could also be personalized based on what the medical center knows about my previous visits (being careful to mention that I’m simply an anonymous patient ID, not a name, by simply grouping me into a segment). If I click through one of these emails to the site, perhaps to read about yoga exercises I can do at home, Tealium can connect my urgent care visit to my website visit and to the content I viewed, all in the CRM. Perhaps after reading about yoga, I read about primary care physicians before leaving the site. Tealium can now tell the ESP to personalize a section of my next email with information about choosing a PCP, maybe even including a short list of physicians near my home.

Pressure cook your personalization

It’s been estimated that more than 80 million people are Amazon Prime members. With this data, it is capable of building analytic models which can predict what these consumers will want, how much they will want, and when they will want it. Now that Amazon can collect and connect data from offline purchases as well, the power of their customer insights is unrivaled.

Ok, so we can’t all be Amazon. But every digital marketer can optimize their business’s key performance indicators by understanding the customer journey and getting ahead of questions or roadblocks at each micro-conversion point. From there, you can use a toolbox of technologies and strategies to optimize the journey from consideration to purchase, and then help them to keep coming back for more.

Remember, it’s personal. Customers care more about themselves than they care about you. Use data to make your communications as customer-centric as possible. That’s what Amazon does best and a key reason for purchasing Whole Foods. Follow their lead and make the best possible use of the data at your fingertips.

Key Takeaways:

  1. The strategic implications of Amazon’s purchase of Whole Foods is less about brick-and-mortar retail or the margins on groceries. It’s about the data.
  2. No matter what industry you’re in, every digital marketer can and should optimize their business’s key performance indicators by understanding the customer journey and getting ahead of questions or roadblocks at each micro-conversion point.
  3. Tools like Tealium can help digital marketers gather data from various online and offline sources, slice and dice consumers into segmented groups, and share that data with other systems both for action and analysis.
  4. Remember, it’s personal. Use data to make your digital experiences as customer-centric as possible.
Category: website analytics
Cheryl Myers

Small Step For Conversion, Giant Leap For UX

This is not our first public display of affection for testing—we love tests, and we love to talk about them. For example, we’ve shared a compelling testing case study on Optimizely’s blog.

Now, it’s my turn.

As a specialist in user experience (UX) and content strategy at Smart Panda Labs, I have developed a close relationship with testing. This invaluable strategy places data at the heart of digital decision-making, providing insights that inform all kinds of choices. For example, the test I’m about to share with you was not designed to focus on your typical testing metric, conversions, but rather to understand how design changes can measurably impact the way customers interact with a user interface.

50 (ok, 2) Shades of Grey

A large real estate client had a series of landing pages, designed by a third party, showing floor plans of available luxury apartments. The landing pages were clean and minimal, and a series of numbered circles indicated how many floor plan options were available to view. However, while a medium grey represented the active floor plan, the circles that represented the subsequent plans were presented in a lighter shade of grey. When the client asked us to improve the design to help increase user interaction, we immediately gravitated to the circles.

We felt that the lack of contrast between the circle that represented the floor plan being actively displayed and the other circles was not enough; the minimal contrast made it seem as if the circles weren’t clickable and instead merely visual cues of the number of available floor plans. We pitched a test to see if greater color contrast would achieve the desired goal.

It’s important for me to mention that we didn’t want to measure the effect this change had on the time users spent on the site, as time on the site can be both good and bad (they can be spending more time because they are engaged or because they are confused and searching!).  So, we focused purely on interactions—were they or were they not looking at all the floor plan options?

BaselineBaseline

Variation 1Variation 1

Variation 2Variation 2

We tested the original floor plan module design against two new variations that each created more contrast, one using a slightly darker shade of grey and one that incorporated a maroon color. This test rapidly showed that the darker grey and the maroon were outperforming the original. Interestingly, the new variations were a dead heat with each other, showing almost a 12% improvement over the original. Users were clearly more likely to view additional floor plans when there was less ambiguity.

Comparison of Baseline and Variation results

This test demonstrates how testing can be used not only to optimize for conversions but to help solve creative problems, like UX design and user interaction. A simple change, paired with a deliberate testing strategy, can help make the subjective objective and inform future design decisions. A test like this can also help make the case for simple and relatively inexpensive optimizations that help improve an experience, perhaps while other large scale changes are in progress or when there’s little time or resources.

CRO and UX Go Hand in Hand

The moral of the story: small changes are easy to test and can lead to significantly more engagement and, therefore, a better overall user experience. These improvements can make a site or campaign more intuitive to the user’s needs and a user journey more enjoyable. This approach, in turn, can prove to be a great supplement to your CRO efforts. In other words, focus on the person and all else will follow.

Key Takeaways

  • Use testing to help make subjective decisions. Allow the visitor’s opinion to carry the most weight.
  • People need to have a good experience before they can make a decision or convert. Use testing to optimize not only the decision but also the experience.
  • Make sure the goals of your test are clear and unambiguous—don’t test for results that could be misinterpreted.