What do you do when you get so large that maintaining growth gets harder with every passing quarter? According to Amazon, one way is to find new revenue streams beyond the core eCommerce business. That’s the idea behind everything from AWS, to Prime Video to an escalating advertising business.
But another way to boost growth is to expand beyond of your own four walls. This is the thinking behind Amazon’s “Buy with Prime” program, which gives third parties the ability to tap into Amazon’s eCommerce and logistics. It lets them outsource these functions while Amazon gains greater reach.
This same general strategy is also behind Amazon’s continued social push, where it brings Amazon-style shopping to popular social feeds. It has accelerated in the past month, including deals with both Meta and Snap to embed Amazon eCommerce functionality in various user touchpoints in their UX.
For example, the Meta partnership positions Amazon products directly within ads on Instagram and Facebook. Users can discover those products throughout the course of their social activity, including the ability to transact directly within the ad units – a core tenet of the ongoing shoppability movement.
Ease and Trust
As for the Snap collaboration – the most recent of these moves – It similarly lets users buy products directly from ads that they encounter on the social app. This is meant to reduce friction in the traditional clickstream of discovering products in social apps, then bouncing over to the browser to buy something.
For example, ad units contain direct integrations with Amazon product listings, including real-time pricing, product details, delivery ETA, Prime eligibility, and all the other vitals from a given Amazon product page. Think of it like an embedded widget or iframe from Amazon, plugged right into Snapchat.
From the user’s perspective, they’ll see these ads just like any other Snapchat ad throughout the UX. They can click on products that strike their interest and check out on the spot. This requires a one-time opt-in to link Snapchat and Amazon accounts, which then expedites all subsequent transactions.
Benefits of this integration include ease and trust. For the former, it expedites the “social commerce” checkout flow. As for trust, linking one’s Amazon account fetches users’ payment details in a secure way from a known quantity – a key factor in getting users to transact in new and unproven places.
Surface Area
Beyond these integrations that expand Amazon’s surface area, the eCommerce giant has made other moves broadly under the social heading. As we’ve examined, it has brought new formats into its own app experiences to meet modern standards and behavioral proclivities of social commerce.
For example, its Inspire feature spotlights products within TikTok-like videos. Launched in May, videos from influencers and brands are meant to bring product discovery and inspiration vibes to Amazon’s traditional use case of searching for specific products. Think of it as a mashup of TikTok and Pinterest.
Backing up, and coming full circle, all the above represents Amazon’s latest in an ongoing quest to diversify revenue. As noted, maintaining revenue growth gets harder as the denominator (the last period’s revenue) gets larger. It’s a “good problem to have” but a challenge in satisfying Wall Street.
The same challenge is at the heart of other big-tech diversification moves, such as Apple’s continued expansion into entertainment, wearables, and services. So expect no slowdown in expansion and diversification from Amazon, including big (healthcare) and small (social media) moves.
