What Can Amazon Product Managers Do About The Customers They Don’t Have?

by drjim on March 5, 2018

 Can you believe it? Some people still don't shop at Amazon!

Can you believe it? Some people still don’t shop at Amazon!
Image Credit:
Claudio Toledo

As product managers, we spend a great deal of our time trying to figure out ways to get more people to buy our products. However, there is that very small collection of product managers who have extremely popular products who have a slightly different sort of problem that they have to work out. They really don’t have too much of a problem getting most people to buy their product because they have a great product development definition; however, now they have to figure out a way to get the last remaining few people who have not yet purchased their product to do so. We should all have such problems!

Some People Don’t Use Amazon!

If you are ever walking down the street where people are throwing their trash out, there is a very good chance that you’ll see a number of Amazon shipping boxes in the trash. The reason for this is because it sure seems like just about everyone buys something from Amazon. In fact, Amazon has created their Prime service where shipping becomes free just to get us to buy more. However, it turns out that roughly 17% of Americans (that’s 22 million people) don’t buy from Amazon. Solving this problem will look great on the Amazon product manager’s product manager resume

Why would someone not buy from Amazon? Well there are many different reasons. You might think that we’re talking about someone who lives in the back country. However, a number of the people who don’t buy from Amazon live in the city. They have no problem with technology. They subscribe to Netflix. Use Uber for transportation and look things up online. However, depending on where they live, they may not use Amazon. If they live in a building with no roommate or one that does not have a doorman, then they may not be comfortable with having a package left at their door. In this case, Amazon may not be an option for them.

There have been a number of different studies done on the people who have chosen to not shop at Amazon. What the studies have shown is that this group of people tend to be older than the average U.S. shopper – 57 years old vs 49 years old. Their annual income is generally less than average, they may roughly $45,700 per year compared to $62,800 for all shoppers. Finally, there is less of a chance that they either have or live with children.

How Amazon Product Managers Can Capture The Rest Of The Market

As you might imagine, the number of people who don’t shop at Amazon is a group of people who is getting smaller and smaller over time. When asked why they don’t shop at Amazon, this group of people provided a number of different answers. These included their current level of income, for some it was their living situation, and as you might well imagine for some it was simply their preference not to shop at Amazon.

Amazon just keeps getting bigger and bigger. This year their income is forecasted to grow by 28% to US$137 billion. Their sales size is greater than the combined sales size of the next 20 e-commerce sellers in the U.S. The people who don’t currently shop at Amazon generally don’t have access to the internet. This may mean that they are not part of the 80% of U.S. adults who had either a smartphone or a broadband connection at home.

The reason that some customers don’t shop at Amazon is because they are an online store. There is still some fear and mistrust of all things on the internet. Roughly 80% of all consumers still want to go and browse the goods that are available and to do this they need to go shop in a store. In order to get more people to get online and shop at Amazon, their product managers created the Prime membership program. Although not everyone belongs to this program yet, there are estimated to be 50 million Prime members.

What All Of This Means For You

I’m sure that every product manager would like their product manager job description to tell them that they have the same problem that the product managers at Amazon are facing: how to get the last few people who don’t use their service to finally decide to become Amazon customers. Most people already are; however, there is a small group of people who are just as happy shopping from their local stores and not getting anything from Amazon. What’s a product manager to do?

Since Amazon has already captured 87% of their U.S. customer market, now it’s just a matter of determining who is still left to capture. There have been studies done on the people who don’t currently shop at Amazon and it turns out that they are older, make less money, and probably don’t have any children. Their level of income and current living situation are often given as the reasons why someone is not currently shopping at Amazon. Access to the internet may play a key role in determining if someone shops at Amazon – 20% of shoppers either don’t have a smartphone or a broadband connection subscription at home. The Amazon product managers are attempting to create membership programs such as Prime that will lure the final remaining customers into their shop.

The good news for the Amazon product managers is that the number of people who don’t shop at their store keeps getting smaller and smaller. The bad news is that they are now down to the hard-core shoppers who don’t really want to shop at Amazon. The Amazon product managers are going to have to find products to offer that these people will decide that they have to have and this may be what finally turns them into online Amazon customers.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that it is really worth the time of the Amazon product managers to go after the few remaining customer that they don’t have?

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What We’ll Be Talking About Next Time

So what’s the one thing that everyone knows about Santa? That he always delivers his gifts to the good boys and girls on Christmas morning. Not the day after Christmas. Or a week later. He gets it there on Christmas morning. As you might imagine, with more and more parents buying things online, the actual process of making sure that gifts get to the people who have ordered them is becoming much more challenging for the good folks at UPS and FedEx. Their product managers are going to have to get creative if they are going to save Christmas…

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