Amazon Moments changing the loyalty game: a blessing or a bane?

Amazon Moments changing the loyalty game: a blessing or a bane? Headshot

By Zsuzsa Kecsmar, CMO and Co-founder, Antavo Loyalty Management Platform

Amazon is like the octopus of the ecommerce world: it always has an extra arm to reach new markets. Still, the announcement of its latest addition, Amazon Moments, left the world of ecommerce and retail marketers guessing: Does Amazon offer loyalty programs now?

In brief: not the way you might think. Yet this new initiative could have a serious impact on how we perceive loyalty programs and customer retention in general.

What is Amazon Moments?

Before going into more details, it’s important to examine how Amazon Moments works. According to Amazon, it’s a cross-platform marketing tool that allows companies and businesses to deliver physical and digital items to their customers. You can visit the dedicated interface, set up a goal for people to reach (such as reaching a high level in a mobile game, or stream a given amount of content on a video platform), and assign a reward from Amazon’s list.

The system is based on a cost-per-action pricing model and so far it seems to be delivering favorable results. The reason behind this success is the fact that Amazon Moments uses rewards that go beyond discounts. Why? Because most customers have become indifferent towards discounts in loyalty programs. So when customers encounter a loyalty program that rewards them for interactions that aren’t tied to a purchase, it feels like a breath of fresh air.

Amazon Moments reward fulfillment framework implications
 
 

What are the main drawbacks?

Going back to the original question: is Amazon Moments in itself a loyalty feature? No. It’s a reward fulfilment framework that works on a global scale. Companies can use it to set up their own loyalty campaign quickly and easily, but unlike a professional loyalty service, Amazon won’t provide the insight necessary to properly segment your customer base and deliver the right incentive at the right time. In other words, you still need to research your audience on your own, otherwise you’ll be wasting money by blindly throwing out rewards.

Moreover, the lack of data hurls some obstacles in the way of executing personalization.The options are already limited in terms of addressing your audience - as you can only send an announcement and redemption message - and all participants receives the same line. Amazon Moment also offers very few means to target different groups of participants. Currently the only differentiating factor is the geographic location of your market. So if you wish to make sure your campaign focuses on affluent Millennial women who live an active lifestyle, then you need to find another alternative.

 
 

Who can benefit from Amazon Moments?

  • Small businesses that previously lacked the fulfilment capabilities to ship physical rewards
  • Global brands and retailers – just like Amazon’s demo partners Disney and TikTok, that wish to serve a large audience quickly and in a scalable way
  • And Amazon itself, as they’ve not only found another monetization channel, but they’ve also unlocked a new way to collect customer data through their partners

Who will give a hard pass on Amazon Moments?

  • B2C brands and retailers that are in direct competition against Amazon. There’s no point in directing your audience’s attention to a competitor’s solution.
  • Businesses that already have their own fulfilment capability. Why pay Amazon for something you already have, and that’s already tailored to your own audience?
  • Luxury and affordable luxury brands. Let’s face it, a luxury interior design retailer like Perigold.com would never use Amazon Moments. It would cheapen the brand in the eyes of an affluent buyer.
Customer engagement level and loyalty chart
 
 

On one hand, Amazon Moments does a service to the loyalty field by finally going beyond discount-based rewards. This sentiment is also a main pillar of Recognition Loyalty, stating that modern customers need to be engaged outside of the buying cycle as well.

On the other hand, small companies might flock the market with their own loyalty campaigns, resulting in a gold rush that pays off only for a selected few. This could be a wake-up call for large players to step up their game and implement a wider array of customer retention features - personalization, loyalty program tiers and experiential rewards - to stay ahead of the thriving competitors.

For more insights on how to incrcease customer loyalty, download Fresh Relevance's loyalty report:

download loyalty report
Amazon Moments changing the loyalty game: a blessing or a bane? Headshot

By Zsuzsa Kecsmar

CMO and Co-founder, Antavo Loyalty Management Platform

Zsuzsa is CMO and co-founder of Antavo. She manages the marketing team, talks with experts all over the world, holds webinars, and edits all kinds of content.