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What does Amazon’s 1-click patent expiry mean for online retail?

In 1997, the US Patent Office granted a fledgling online bookseller the patent for “A method and system for placing an order to purchase an item via the Internet.” That bookseller was, of course, Amazon. That patent was, of course, 1-click ordering.

Twenty years hence, it won’t have escaped your notice that that patent has just expired. Should online retailers be getting excited? Are we entering a new ecommerce epoch? Or is this a nice opportunity to remove some friction from the customer journey? Or, indeed, are retailers even interested in this development?

Frictionless retail

It’s obviously best not to frustrate a shopper who’s trying to buy something from you. With 1-click, anyone who might be irritated by a longer checkout process can avoid it. So those who want to make a purchase can find it easier to do so.

The 1-click technology allows shoppers to place an order without re-entering their payment or shipping details. That single click can confirm the intention to purchase, and avoid pages of data entry. That can be a boon to any online retailer, especially if they suffer significant levels of basket and checkout abandonment.

There are also those customers who perhaps didn’t intend to buy anything then and there. Duncan Licence, VP global solutions at Metapack: “Easy checkout … encourages a higher level of impulse spending and removes basket abandonment entirely.

By offering a 1-click option, retailers not only eliminate friction for the more deliberate purchases, but they also encourage purchases that might not have happened, had that enticing button not been there.

A new era?

So can we expect 1-click order buttons to appear on every online retail site? It’s hard to predict whether there’ll be a mass adoption, a gradual introduction, or whether just a few retailers will try it out.

As an absolute straw poll, at our recent Data Summit we asked our 120-strong delegates firstly whether they were aware of the 1-click patent expiring and, secondly, whether any were planning on trialling it. The response was fairly stark – around seven said they knew about it, and just one or two were planning on potentially doing something with it.

What is sure is that as helpful as a 1-click button may be, it won’t solve any underlying problems with your product pages or your offering. Tom Forte, ecommerce analyst at DA Davidson: “If the consumer doesn't want to buy your product, it doesn't matter how easy it is to buy it.”

It may also be that the 1-click order button may be suited to one retailer, but not to another.

According to Maginus: “One of the main reasons Amazon’s 1-Click was so successful was its combination with Amazon’s sheer volume of products. It enables impulse buying on a huge scale, and the nature of the Amazon purchaser, browsing anything and everything from books to movies, food and toys, meant that analysts estimate it made the business around $2bn in additional sales annually. Whilst Amazon deny that figure, it is obvious the technology provides great value to them, which is why they have fought for it so hard over the years.”

Some words of caution

If you are inclined to implement a 1-click button on your website, bear in mind what it might do, and what it can’t do.

Impulse control

  • If indeed the button does result in a greater number of impulse purchases, the corollary of that might well be more returns. If customers are making spur of the moment purchases, many of them can regret and return them.
  • Consider whether the functionality is actually useful or relevant to your proposition. If you sell premium or luxury products, then a 1-click offering will likely do you no good. Most shoppers approaching a considered purchase are unlikely to click the button with reckless abandon.

No silver bullet

  • As mentioned before, the addition of an easy ordering and payment function won’t solve any underlying commercial weaknesses. People need to want to buy from you in the first place.
  • Consider this an opportunity to revise your whole checkout process, rather than hoping one new button will solve your basket abandonment problem. There’s no one thing that makes or breaks online baskets and checkouts — they are a combination of a great many elements. You need to optimise them all.
  • 1-click is irrelevant to first time customers. Returning shoppers can have the payment and shipping details stored with you, but a new customer will still need to provide them.

Conclusion

The simple answer is that 1-click shopping is not for everyone. Some propositions will find no benefit in introducing it. Others might find that it slashes their basket abandonment rates and offers a shot in the arm for conversion.

If the resources to implement the addition are no problem, then trying it out is a low- or no-risk experiment, perhaps using some A/B testing. And if you can’t — or don’t care to be — one of the early adopters, it’s certainly one worth observing over the coming months to see if it’s something you ought to be doing.

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