How Amazon increases conversions with short circuits

Buying a Kindle book

I regularly encounter two different purchase flows on Amazon: one is for physical items, and the other for digital goods.

I see two buttons when I visit the listing for a physical book:

• "Add to cart": mark the item for purchase and continue shopping
• "Buy now": Skip straight to checkout.

I only see a single button when I buy a digital book for Kindle: "Buy now with 1-click®" Clicking that button purchases the item and pre-downloads it onto my device. I also have the option to download it on my other devices.

Digital downloads default to the 1-click flow because this is a better experience for users and improves Amazon's bottom line. Before we learn how to apply this to our own business, let's chat about conversion funnels. If you're already a conversion expert, then please skip to the section "Why Amazon's Kindle short-circuit works," which will have an actionable takeaway for your business.

Conversion funnels 101

A "funnel" is a journey that the customer takes to buy a product. The goal is to exchange the customer's money for goods or services. When they successfully complete a transaction, this is called a "conversion."

Let's look at a case study: a buyer wants to buy a physical copy of "A Promised Land" by Barack Obama.

Let's say they start on Google and type, "barack obama a promised land". They see that the top two results are for barnesandnoble.com and amazon.com. They open up the results for barnesandnoble.com and amazon.com in different tabs to compare. They like the Amazon result better, so they close the Barnes and Noble tab, add the book to their cart, go through the checkout flow, and purchase it.

Both sites have a "funnel" consisting (approximately) of the following actions the user must perform to successfully convert:

• The user searches search for a book.
• They click the search result, entering the site.
• They select the quantity and variation and clicks "Add to cart".
• They navigate to the cart.
• They enter (or confirm) their address and payment method.
• They click "check out" and successfully complete the order.

In this example, the user bounces from barnesandnoble.com on the third step (they never add to cart), but the user goes through the full flow to convert on amazon.com.

Users will drop off at every step. Sometimes you don't have control over this: users learned enough about the item that they realized they didn't want it. You were never going to get this sale.

Sometimes you can influence the outcome: many users want to complete the purchase but fail because it takes too long. Imagine a major distraction, like a toddler charging into a room and demanding attention by screaming. You are racing against this toddler when you have a conversion flow. The user has to convert before their attention is ripped from them.

Anyways, let's add some hypothetical numbers to this purchasing flow.

Out of 1000 searchers and 200 site visitors, we're saying that 27% of people who visit the site will convert. I don't have good intuition for whether this number would be "good" or "bad" for Amazon for this particular flow, but it would be shockingly high for many sites. But this particular flow is high-intent, since the buyer intends to purchase a specific book right now. Different visits have different levels of intent. Buyers who land on a specific offering from search have higher intent to buy than someone browsing recently published books.

There's a consolation prize for conversion funnels, and it's that buyers are more likely to buy as they progress through the funnel. I modeled this as the rate going strictly up. This won't be true for all (or maybe most) funnels, but the specifics don't matter much for the lesson here.

Why Amazon's Kindle digital short-circuit works

The 1-click button skips the "add to cart", "go to cart", and "complete checkout" steps. Even if these steps have extremely high conversion rates, their conversion rate is even better when you just skip them entirely.

This speaks to the difference between digital and physical goods. It's easy to imagine failure modes for physical goods. When you purchase an item, Amazon must create a plan for moving a real item from the warehouse where it started to your house. If it's in transit, and you decide that you don't want it anymore, they can't just say "nevermind." It's hard to walk back from it being on a shipping truck across the country. On the other hand, digital downloads are ephemeral. It's not a big deal if someone asks for a refund. Amazon can verify that they didn't download the item (or they didn't even open the book on Kindle,) then they can just cancel the transaction and almost pretend like nothing happened.

"1-click" is a tremendous shortcut. It means that anyone who signals intent to purchase by clicking "Buy now" will be more likely to convert. You almost always win the race against the screaming toddler.

Let's say that 5% fewer people click the "1-click" button when it's an instant purchase. After all, some people use their shopping carts as a bookmark folder and have no intention of buying the item.

About 16 more conversions than before. This doesn't sound like much. But realize that this particular journey would have a 29% conversion rate improvement using a "Buy now" checkout with these particular numbers. Even if the rate weren't as high (maybe people are less likely correct a failed payment in this mode, maybe more people ask for refunds because of misclicks, maybe many fewer people will click it), it's still likely to be a substantial win in this particular path because you have 29% to play with.

In fact, this principle works so well that they use it in their physical checkout flow! Go look again. The "Buy it now" button also skips the "Add to cart" step. Amazon really wants to shave off steps whenever possible, even if it requires giving the user extra choices.

When can we use this?

Consider offering a user the chance to skip steps when they signal intent. It's not always the right thing to do, but the cost is often low.

Imagine a user starts off on a pricing page for a plan, and then moves to other parts of your site. Later in the visit, you could show them a banner with a deal for that plan - 2 months off with the purchase of a 1 year plan. This moves the user away from the (blog ➡ plans ➡ compare ➡ checkout) flow and straight to checkout.

If a customer adds something to their cart and then bounces, send them an email reminding them that they had the item in their cart and offer to take them straight to checkout. This takes your funnel from (??? ➡ site ➡ plans ➡ compare ➡ checkout) and turns it into (email ➡ checkout).

Make sure that you understand what your conversion funnel looks like. It'll be harder to short-circuit something that you haven't formalized.

It's possible to take this too far. Do not take this too far. I'm waiting for the day that I read a news article about some CEO who thinks, "We have all these credit cards on file, and our recommendation algorithm is really good. We can buy people things that we're 100% confident that they will like." Do not be this CEO. That "growth hack" they just thought of is called "credit card fraud" and it is a crime

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