What Amazon Losing It’s 1-Click Patent Means For Your E-commerce Business

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For a long time, Amazon has been the only company (in the US, in Europe their patent was denied) allowed to use a 1-click checkout system.

Amazon was granted this patent in the 90’s and has even used it to sue Barnes & Noble for infringement.

1-click checkout has the potential to increase your conversion rate and customer lifetime value drastically.

What is the 1-click patent

Amazon’s 1-click checkout is available to repeat customers. The idea is that once they have your shipping details and payment information, you shouldn’t be required to input it again.

In fact, they don’t want you to have to do anything. You just click the button, and a couple of days later you get your package.

This system is only useful for websites that experience a lot of return customers. However, even for companies that have a lower return rate, this kind of system is likely to increase it.

It makes the whole experience of shopping effortless for the customer, and the lower barriers to purchase are likely to improve the chance of an individual customer buying the product.

It reduces the chance of you losing customers at the checkout or cart stage. If you track this, you’ll notice that it’s likely a huge number of clients. This 1-click system will allow them to checkout instantly, making a big difference to your revenue figures.

It’s also had the effect of increasing brand loyalty for Amazon, helping to further their dominance of e-commerce. It makes it easier for people to shop on their website than anywhere else in the world.

It has helped them to spread across different industries and dominate small niches that they expanded into quickly.

When do they lose it

Amazon is expected to lose their patent at the end of 2017, allowing other US companies to install their 1-click systems.

Why you should use 1-click

It’s entirely reasonable to assume that you could get a 10% or greater increase in conversion rates for any returning customers.

A huge portion of sales is canceled and lost in-between the customers adding the item to their cart and checking out.

This 1-click system should help to decrease ‘lost carts’ and boost conversion rates from returning customers.

More importantly, it helps increase the lifetime value of clients.

This 1-click system will create brand loyalty. If it’s easier for your clients to buy products from you than your competitors, they’re more likely to continue to shop with you.

When the patent expires, anyone will be able to use this system.

However, it’s going to take your competitors time to catch up, and they might be unaware that this patent expires.

Being one of the first in your industry to introduce single click checkout could make a big difference. As well as being useful to your customers, it’s something that you could use in your advertisements.

Before you decide to rush off and invest money into preparing your system, you should check with your teams to determine how much benefit this could have to you.

Most importantly, check with your legal term to make sure that you’re not infringing on any patents and that you don’t jump the gun.

Secondly, you should gather your marketing team to analyze your current customer base and their shopping habits.

The impact this new checkout will have depends on; the amount of returning customers, the percentage lost during checkout and the lifetime of returning customers.

Obviously, if you have a huge amount of returning customers, then this is likely to have a much bigger impact on your business.

But more importantly, if very few of those returning customers are lost during checkout this isn’t a big issue.

Your clients might not be bothered about having to re-enter their details or click a few more buttons. This will depend on your demographic.

Finally, the long term impact will be dependent on the lifetime of your customers. If you have returning customers, that’s fantastic, but if they only return once or twice the impact is going to be small.

1-click checkout is so beneficial to companies like Amazon because customers stay for decades. This checkout system only solidifies that brand loyalty by making the process easier.

If your customers only ever intend to buy a few times, the impact will be smaller.

For example; if you sell products in a single industry that aims to solve the customer’s problem once and for all, the impact might be subtle.

On the other hand, if you operate in a business like clothing you’ll find that customers regularly need to buy new outfits. In this case, 1-click checkout will have a much larger impact on your business.

Figuring out the impact on your revenue is a significant step to deciding if this provides a positive ROI.

Finally, you’ll need to work with a software development team to create the 1-click checkout system and ensure that it operates correctly.


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Abby Olson

Abby Olson

Abby is a sparkplug of energy, and a go-getter in leading the SEO department. She helps kick in the energy in the office and keeps us all on our toes.


 

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