DISCUSSION
Will Amazon succeed with brand sampling rooted in machine learning?
Written by RetailWire Staff
Source: amazon.com/samples
Through a special arrangement, presented here for discussion is an excerpt of a current article from the blog of Kiri Masters, founder and CEO, Bobsled Marketing. The article first appeared on Forbes.com.
Amazon.com is experimenting with free product samples as a paid advertising service for CPG brands.
According to the program's landing page, the samples are “like Amazon’s product recommendations, but real,” available for Prime and non-Prime members. The effort is separate from Amazon’s Prime Sample program, where Prime members pay to receive a box of product samples.
A job listing found by Axios for a senior software engineer describes the “Targeted Sampling” program: “Free samples of new products are sent to customers selected using ML (machine learning), thus ensuring a higher likelihood of conversion than display ads. The program has a challenging mix of problems involving targeting, fulfillment, customer and vendor experience, and cross-campaign learning.”
And thus underlies the strength of a sampling program designed by Amazon — an additional advertising option for CPGs eager to harness the reams of consumer shopping and intent data that the e-tail giant holds. Product samples are widely used by CPG brands to activate new customers. But Amazon is able to pair fulfilment of sampling with its proprietary shopper data and make sure that only highly interested, “in-market” customers receive the samples.
Amazon is already the third largest digital advertising platform in the U.S., according to eMarketer. Adding product sampling to its array of advertising options for large brands is almost a no-brainer — it drives more sales on the platform, locks brands into marketing spend on the platform and presumably brings in advertising revenue of its own accord.
Managing the logistics of product samples is also something that the Google-Facebook advertising duopoly just can’t match.
Still, some brands may be concerned that Amazon may choose to prioritize its own private label brands ahead of third-party CPGs in the future.
Amazon also owns the customer. Relative to the vast array of shopper information that Amazon collects, vendors and sellers on the platform are able to access very little customer information. Sellers and vendors are expressly prohibited from contacting customers outside of specific customer service requests or remarketing to them
The program may also face resistance from consumers who recognize that their browsing and shopping data is being used within Amazon's advertising programs.