Amazon’s ‘1-Click’ patent just expired: What this means for other e-commerce sites
Friday, November 3, 2017/
E-commerce is about to get significantly better at saving the consumer loads of time and automating our basic purchasing needs. I believe this is the start of an unprecedented wave of exciting innovation, with artificial intelligence (AI) at the helm of it.
Amazon’s ‘1-Click’ patent has been one of its major advantages on the road to market dominance in the US. For those of you who are not familiar with the technology, the 1-Click buying button allows return customers to do just that — pack the tedious checkout process into just one click.
“[The 1-Click patent] allowed Amazon to show customers that there was a good reason to give them their data and the permission to charge them on an incremental basis,” says patent law professor R. Polk Wagner.
Amazon patented the then novel technology back in 1999. It later sued Barnes & Noble for using it and won. Some companies have licensed the 1-Click buy from Amazon, most notably Apple in 2000, as Steve Jobs believed it to be crucial for the growth of the iTunes Store.
With the expiring of the patent, the field is levelled, or it will be soon once online retailers catch up with implementation. The big guys have long been anticipating this day and are already developing their own technology for 1-Click purchases. Giants like Google, Microsoft, and Facebook have been gearing up to take the 1-Click buy to just about any page on the web.
Facebook itself already has a Buy button, and other social media players are busy testing the waters, most notably — Twitter, Pinterest, Instagram.
All evidence points to a future where 1-Click buying will be the norm. Your information will be stored by leading retailers, social media sites, your browser, or the likes of PayPal. And you will be free to roam around the internet and seamlessly pick off its offerings as if from one big store that offers everything under the sky.
I am excited about the opportunity this presents for all e-commerce stores — the big and the small. As we automate online experiences, we are enriching consumers’ lives with ever smoother and quicker interactions.. These innovations will further fuel the growth of e-commerce and fast-track the advance of machine learning, making our lives ever easier and ever simpler to check out anytime, anywhere.
E-commerce stores of all sizes should be excited
For the consumer, the 1-Click buy creates a fast, smooth, and time-efficient buying experience. For retailers, removing the hassle means closing more deals.
According to the Baymard Institute, the online shopping cart abandonment rate on average is 70% percent. And although there are no official numbers on how much the 1-Click button has helped Amazon, some estimates say it’s garnered them about a 5% boost in sales, which for Amazon translates into $US2.4 billion.
The longer and clumsier your checkout process is, the more buyers you lose to it. So 1-Click buying, or a variation that comes close, is the ultimate solution for retailers looking to minimise cart abandonment.
Shopify has put a lot of effort into improving the speed of checkout for its customers with Shopify Pay, which has led to a 40% improvement in checkout speeds and an 18% higher conversion rate for returning customers. If this is any indication, the 1-Click buy button will boost sales significantly where implemented.
Similarly, the World Wide Web Consortium (W3C) has gathered leading tech firms, including Google, Facebook, and Apple, to work on a standard for web browser credentials that you can use to buy with one click from any site. Google is working on a 1-Click buy option for Chrome and has implemented it in newer versions. The standard will allow users to store their credit card information in one secure place — the browser — and use it anywhere they shop online.
Some retail executives say that 1-Click payments will be great for the growing online grocery niche, in particular, where your customers order more or less the same items each week without any research. Even creating a physical re-order button for your weekly groceries, similar to Amazon Dash, seems like a good idea.
It will start with groceries and socks, then algorithms will soon know when you need a new couch and send you a highly personalized 1-Click order email. And the more comfortable consumers get and trust the system, the more 1-Click buying will take over bigger ticket items. All the way to the point when you will be able to 1-Click buy a self-driving car or 1-Click on that Space X pop-up for a de-stressing weekend trip to Mars.
So put your hesitations aside, and get ready to implement the most advanced version of 1-Click buying that you can get your hands on. If you don’t, your growth will be dwarfed by those who do and catching up with what comes after will be even harder.
1-Click buying is going to change mobile shopping
Mobile is finally liberated from tedious form-filling and the hesitation of second thoughts. Exciting times are coming for consumers and stores, and new types of relationships will be built that will bring new opportunities.
Online retailers have been making big strides in simplifying the mobile buying experience, and 1-Click buying fits right in. According to Venture Burn, the abandonment cart rate for mobile purchasing is 97% and is in definite need of fixing.
Consumers are using mobile to do a lot of their research, but more often than not, make the final purchase on a desktop. Not only they are frustrated by filling out long forms on mobile, but there is still some stigma about mobile security.
Smartphones have grown in size, resolution, and speed, but brands still need to simplify the buying journey. The 1-Click buying process feels like it’s made for mobile and brings necessary freshness to the process.
Even though consumers spend 59% of their time on mobile devices and 41% on desktops, they buy 15% on mobile devices and a whopping 85% on desktops. Brands have been working to improve their mobile interactions, and the 1-Click buy button might be just the technological leap they need.
E-commerce is predicted to grow sustainably and shift towards mobile-use, and 1-Click buying will play a major role in that growth. Combined with AI and augmented reality on your phone, consumers will be offered a very personalised selection of goods that they will be able to virtually try on and buy in seconds.
1-Click buying is another leap in the right direction, making the smartphone the device of the future. It’s amazing to think that in two to three generations from now, people will buy everything from their phones.
Online retailers must take action and earn their place in this brave new world. Consumers want simplicity. They want to 1-Click on their phone and get all their routine items delivered the next day.
It will get some getting used to, but that is the nature of all change and that is why retailers have to be cautious with implementation.
What to consider when implementing 1-Click buying
The 1-Click buy button is as much a power as it is a responsibility because it can put a strain on your fulfilment and logistics. Also, your customers will only use it if they trust your store in the first place.
Before you make any changes, make sure your company considers the following:
Your relationship with your customers
1-Click ordering works best for stores that have built a great relationship with their customers and get it right the majority of the time.
The increased customer service load
You have to prep your customer service lines to handle accidental orders and changed minds within minutes or hours of purchase. Impulse purchases can lead to an increased number of cancellations and a strain on customer service. Accidental clicks can also be frustrating for customers and keep your lines busy.
The effects on shipping and inventory
Consider if the increase in orders will have an effect on your shipping time and delivery quality. If you are a high-volume seller, the 1-Click buying button can put a strain on your inventory, leading to backorders and customer complaints.
Consider testing with small ticket items, maybe offering it for re-orders of the same items first. Putting it out there for $5000 designer chairs might not be the best place to start.
Outdated consumer information
Expired credit cards or changed shipping addresses can create confusion for everyone involved. Make sure you have a process in place to handle orders that come in with expired information. The simplicity and lack of verification of this system may also lead to increased fraud. Be prepared for the pushback and how to remedy the situation.
What comes next?
Well hopefully, I’ll be able to order my groceries by just winking at my phone. Hey, a girl can dream.
We have to keep in mind that Jeff Bezos is determined to keep Amazon on top and is bound to push hard to develop the next generation consumer experience leap. Amazon has been investing billions in fulfilment and logistics on the back end of the operation but is also pushing for great user exeprience with programs like Amazon Now.
“I would say, a lot of the value that we’re getting from machine learning is actually happening beneath the surface. It is things like improved search results [and] improved product recommendations for customers,” said Jeff Bezos at the Internet Association gala this year.
Amazon is looking strongly into AI and is probably coding away the next big algorithm, one that will use your data to predict when you are thinking of buying a bigger TV and automatically re-order it for you.
But can too much automation hurt us? I don’t think so. On the contrary, it will make the buying and selling process of commerce that’s existed for millenia even easier. And AI on mobile will change the way we shop, live and even think, all for the better.
With 1-Click buying taking over the internet, we are stepping towards a future where we will only shop online, and mostly on mobile. Artificial algorithms will know us better than ourselves and do most of the ordering for us. A time will come when even the 1-Click buy will seem like a tedious checkout process, and we will delegate every decision to machines.
You: “I need a break, Alexa.”
Alexa: “I have just booked you a long weekend on Mars.”
You: “Thank you, Alexa, you know me so well.”
This article was first published on Medium.
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