How Amazon, Walmart & Target Are Acquiring Customers

Amazon, Walmart, and Target are three of the most successful ecommerce companies in the world today. But each has taken a radically different path to the top. 

Amazon rose to prominence during the dot-com revolution, survived the crash, went on to launch Amazon Associates and has grown bigger and more powerful ever since.

Walmart is the oldest brand featured here. Growing from a single store in 1962 to more than 11,000 stores worldwide today, it’s currently worth just shy of $300 billion (and yet the brand is still dwarfed by Amazon, which is worth 2.5 times as much).

Last but not least is Target, Walmart’s main competitor (in the U.S., at least). On the surface, the brands may seem startlingly similar, and yet despite parallels in appearance, their core business models are actually quite different.

Each of the aforementioned brands also employs pretty diverse tactics when it comes to customer acquisition. We know they all invest in paid search – a near-essential channel for ecommerce businesses. There’s also a clear correlation between how much they spend on paid search, and how much money they’re making:

But what about the other ways these businesses are acquiring customers?

What we can learn from them? And why should we try to learn about customer acquisition from billion-dollar brands?

Needless to say, the way they operate and the challenges they face couldn’t be more different than what most of us deal with, but that doesn’t mean there aren’t still lessons to be learned from how they got to where they are today, and how they remain at the top of their game. These brands make the most out of their strategic email marketing campaigns.

After some in-depth research and analysis, here are my insights into how three of the world’s most successful brands today are acquiring customers.

How Amazon Is Acquiring Customers

Amazon was recently named the world’s most valuable brand. It’s also the world’s biggest ecommerce site, and reportedly the third-most-used search engine (coming in after YouTube and of course, Google).

Any ecommerce company with their sights set on stealing even a small slice of Amazon’s pie has their work cut out for them, but that doesn’t mean we can’t learn a few tricks from how Amazon has acquired – and retained – such a huge number of customers.

So what did Amazon do to achieve such extraordinary success?

SEO and AdWords

Amazon’s early success resulted in large part from its aggressive use of SEO and AdWords. The company reportedly targeted millions of keywords, both organically and via paid search.

Of course, this was a different time. Competition in organic search has increased significantly since Amazon burst onto the scene. Naturally, the cost of paid advertising has increased with it.

But while competition for space in SERPs is significantly tougher today, that doesn’t mean you shouldn’t be investing in SEO and Google Ads.

Pay-per-click (when done well) can be invaluable for new brands that need to get in front of a targeted audience, and fast. SEO is an investment that pays off long-term, but it’s still something you should be investing in as soon as you can afford it.

It Sells Everything

Or pretty much. If it’s legal, it’s probably available on Amazon. And you can purchase some really, really strange goods on there.

Salmon fillet pillow, anyone?

Or how about a set of miniature hand finger puppets?

Of course, Amazon doesn’t sell all of these products directly – its near-limitless inventory has evolved as a result of the site acting as a marketplace for other sellers. The company has also made it as easy as possible for other retailers to sell through the site by offering a fulfilment service.

The fact that Amazon sells “everything” plays massively into the fact that a significant portion of product searches begin not on Google, but on Amazon.

This leaves Amazon in an even stronger position. Those who would otherwise be competitors have little choice but to use the platform to sell. WooCommerce store owners can for example connect their store to Amazon. If they don’t, they’re missing out on the chance to reach a huge portion of potential customers.

It’s Optimized the Checkout Process to a Tee

Remember when shopping online almost always required you to fill out countless details before you could complete your purchase, whether or not you were registered with the site or had shopped there before?

While some sites are still guilty of these ecommerce crimes, Amazon has led the way in simplifying online shopping.

Once you’re registered and have entered your address and card details, you can complete a purchase with a single click. Many products that customers buy regularly are even available on subscription.

Why would you buy elsewhere when it’s this easy to shop through Amazon?

Of course, there’s one thing that might have caught your eye when analyzing Amazon’s checkout process: unlike with many sites, you have to register to make a purchase. There simply isn’t a way to shop without signing up.

This might seem counterintuitive. After all, it’s making it more difficult for a first-time shopper to complete their purchase.

But we’re talking Amazon here. It knows what it’s doing. I don’t doubt it will have split-tested this and concluded that what it loses in shoppers who refuse to register, it gains in loyalty from those who do create an account.

It’ll Beat Competitors by Undercutting Them

Selling “loss leaders” has long been a strategy employed by supermarkets to get shoppers through the doors – the idea being that what the store loses in selling certain products below retail value, they’ll get back (and then some) in profit on other purchases customers make once in the store.

This strategy is understandably a little less popular with online retailers.

While it’s certainly possible to increase the value of a basket before a customer checks out by displaying other products the customer may be interested in, this pales in comparison to what can be achieved in an actual storefront.

But that hasn’t stopped Amazon.

Undercutting competitors has been key to Amazon’s success, to the point that it’s willing to discount even if it means taking a loss.

Is this right or fair?

Perhaps not.

But it does highlight one key takeaway: unless you’re the sole seller of a completely unique product, pricing strategies – and particularly Amazon pricing strategies – are more important today than ever before.

It Focuses on Customer Loyalty

We’ve already touched on tactics like offering one-click checkout and product subscriptions – both of which are going to make a massive difference in the loyalty of Amazon’s customer base – but there’s another way Amazon drives customer loyalty that I haven’t mentioned yet.

Amazon Prime.

For a small monthly fee, Amazon customers can get unlimited, free, two-day shipping on millions of items (U.K. customers get one-day shipping). Check out this case study on Amazon Niche Sites.

This alone makes it almost impossible to shop anywhere but Amazon.

To sweeten the deal, Prime customers also get access to:

• Prime Video – a streaming service similar to Netflix
• Prime Music – an ad-free music streaming service offering more than 2 million songs
• Prime Reading – one free book download a month from a choice of editor’s picks

This is a service that Amazon has built up and expanded over time.

Initially, the service simply offered free, unlimited shipping. Since then, Amazon has added Video, Music and Reading to create a service that offers enough value to retain subscribers, regardless of how often they actually shop with the site. Indeed, 93% of U.S. Amazon Prime subscribers continue with their subscriptions after one year, jumping to an astonishing 98% after two years of membership.

It Offers Freebies

Amazon regularly runs competitions and offers discounts and “cash” bonuses (that can only be spent on Amazon, of course).

Needless to say, this isn’t just Amazon being kind to its customer base – they’re all tactics designed to:

• Drive impulse purchases
• Get on-the-fence customers to buy
• Engage customers by encouraging them to complete actions that are (presumably) proven to boost loyalty

For instance, it offers $10 to spend by Prime Day when streaming a Prime video for the first time on a TV (the goal being to get Prime customers to fully realize the benefits of Prime video and, as such, boost loyalty):

Or it encourages customers to test out Audible by offering it at almost half-price for 6 months:

It Makes Customer Service Its Top Priority

Perhaps more important than all else, Amazon makes customer service its biggest priority, from offering super-fast delivery to no-quibble returns.

For example, customers know and trust that Amazon is almost guaranteed to deliver on its promises. They also know that in the rare case something does go wrong, Amazon has the customer’s back, and the problem will be sorted quickly and with minimum hassle.

How Walmart Is Acquiring Customers

Of the three brands featured here, Walmart boasts the longest and richest history. In 50 years, it’s expanded from a solitary, local supermarket to the world’s biggest brick-and-mortar retailer (and it doesn’t fare too poorly online, either).

So how has Walmart done it?

It Combines Price and Convenience

Whatever you might feel about Walmart, you can’t argue with the effectiveness of its approach to customer acquisition: great prices and convenient shopping.

Walmart has thrived in large part thanks to an aggressive growth strategy designed to drive customers away from local independents by offering everything they need under one roof, at a lower price.

What’s more, since Walmart’s price-competitiveness became common knowledge (which must have been decades ago), customers will often shop there by default, because they assume they’re getting the best price (even though it’s practically impossible for that to be the case every time).

Either way, Walmart’s price-driven success helps support one of the running themes in this article – that the driving factor in countless purchasing decisions is cost.

It Changes With the Times

A not-uncommon problem with brands that have been around as long as Walmart is that they fail to change with the times. They’re often held back by the antiquated beliefs of those who have been part of the C-suite for decades, and who believe that if something worked once, it will work forever.

Needless to say, they couldn’t be more wrong.

Brands cannot survive on the same business model that worked for them 50 years ago. Their previous success doesn’t matter. If they want to continue being leaders in their industry, they have to adapt. If they don’t accept this, they will fail.

• This is why companies like McDonald’s are offering healthier choices, premium ranges, and increased customization.
• It’s why Netflix moved from offering a mail-order DVD sales and rental service to an online-only streaming service with its own production company.
• And it’s why Walmart went from strictly brick-and-mortar to creating a competitive online presence, complete with an app.

Of course, Walmart hasn’t let progress get in the way of its main USPs: price and convenience. Instead, progress has allowed the brand to place greater emphasis on its core differentiators.

For instance, in 2017, Walmart introduced a “click and collect” feature, whereby the company started to introduce Pickup Towers at its physical stores. Effectively a vending machine for online orders, they allow customers to save on last-mile shipping costs. Walmart recently announced that a further 900 Pickup Towers will be installed across the U.S., taking the total number to 1,700.

Reassurances like this are a great way to draw customers away from competitors who haven’t invested so heavily in technology.

It’s Revolutionizing In-Store Shopping

Like it or not, we already live in a world in which there is – pretty much – no need to ever set foot outside our homes. We can work from home, we can socialize from home, and we can shop for pretty much anything, anytime, from the comfort of our living rooms, and get it delivered directly to our door in record time.

In fact, Tesco (a U.K.-based supermarket not unlike Walmart, and the world’s fifth-largest retailer by revenue) now offers same-day grocery delivery to customers that order before 1pm.

This means brick-and-mortar stores need to try harder than ever to get people through their doors. They need to be transforming the in-store shopping experience and giving consumers a reason to actually visit the store, when the same products can be bought just as easily online.

One way Walmart is doing just that is through its new digital store maps. Unique to each individual Walmart store, they allow shoppers to search for an item in-store or at home using the retailer’s app, to be shown the item’s exact location.

It’s Using Big Data to Improve the Shopping Experience Further

Understanding how customers shop is key to improving the shopping experience and getting more customers through the door.

In an effort to better understand how customers behave in-store, Walmart uses big data. It then leverages this data to optimize UX in each individual store. It does this by:

• Predicting when stores, and checkouts, are at their busiest so it can staff stores accordingly
• Optimizing how stock is displayed
• Establishing the ideal ratio of manned tills to self-service tills

It’s Prioritizing Customer Service

Once again, we see the importance of customer service enter into play when it comes to customer acquisition.

Sure, price is very (very) important. But regardless of this, how many shoppers are going to return to a business that offers a substandard service, or buy for the first time from a business with an online presence that’s littered with poor reviews?

It doesn’t matter what industry you operate in – customer service is critical.

Walmart knows this, and consequently takes steps to ensure every customer feels valued and looked after.

One way it does this is with customer hosts, which are being gradually introduced to replace the company’s famous in-store greeters.

When you walk into a Walmart store, you’ll be welcomed by a host who is on hand to process returns and issue refunds, as well as clean up spills, fetch stock, and collect carts.

Essentially, it’s trying to recreate the personalized service shoppers used to get from the very stores that Walmart put out of business. While you might question that concept, you cannot question its effectiveness as a way to gain and keep customers.

How Target Is Acquiring Customers

Target is another long-established brick-and-mortar brand that can attribute its initial success to offering quality products at a great price. Its target market (pun not intended) was shoppers who were looking for more (in terms of quality of products and shopping experience) than was on offer from its main competitor, Walmart.

This is reflected in the competitors’ slogans:

Walmart: “Save Money. Live Better.”

Target: “Expect More. Pay Less.”

The result has typically been that Target attracts a wealthier clientele than Walmart. Specifically, the average Target shopper reportedly earns $64,000, while the average Walmart shopper earns between $30,000 and $60,000.

Perhaps more interesting is the fact that even the very wealthiest are sometimes spotted in Target (Beyonce not excluded). According to a survey in AdWeek, 41% of people with a net worth over $5 million said they liked to shop there.

Of course, you’re not here to learn about the ins-and-outs of who shops at Target vs. Walmart. You want to learn why people are choosing to shop there.

These are some of the most effective tactics Target has for getting new customers to its stores and website, and ensuring they become repeat customers in the future.

It Makes In-Store Shopping Really Easy

We’ve already touched on why this is so important. However, greeting customers and digitizing the in-store shopping experience aren’t the only ways brick-and-mortar retailers are streamlining in-store shopping.

One way Target is making in-store shopping easier is by enabling customers to pull up right outside the store and have their online orders delivered directly to their vehicles by Target employees.

It’s also carefully considered its customers’ needs, enhancing stores with features like comfortable, private nursing rooms.

Again, it all comes back to acquiring (and keeping) customers by listening, learning, and offering a service and experience that isn’t available elsewhere.

It Draws Customers in With Its Private-Label Clothing Collections

The idea of buying clothes at a supermarket is nothing new, but what was typically on offer an aisle away from the meat and dairy section was low-cost and low-quality.

You might have headed to the clothing section if you needed some basic items or were on a strict budget, but shopping for clothes in a supermarket was never something people aspired to.

Target has bucked this trend by designing quality private-label clothing collections at affordable prices; items that shoppers actually want to own. This gives customers one more reason to visit Target over a competitor.

It Partners With Known Brands and Leverages Their Customer Base

Target first embraced this tactic in 1999, and according to The Washington Post, has partnered with more than 175 other brands in the years since.

The trick, however, is to partner with brands that are already known and trusted.

This strategy allows Target to acquire new customers by tapping into those brands’ existing bases (and vice versa) through various online and offline marketing and advertising channels.

Just a few examples of recent partnerships mentioned here include: 

• Putting Victoria Beckham’s name to a clothing line
• Offering a homeware collection designed by Fixer Upper’s Joanna Gaines 
• Launching a collection of outdoor clothing designed in partnership with Hunter (a British brand best known for its range of high-end Wellington boots).

It’s Created an App That Makes Shopping Easier and Saves Customers Money

In addition to competing on price and offering great customer service, one of the things that sets apart many of the most successful brands today is how they’ve evolved digitally.

This typically means going beyond designing a website and creating a complementary app, to investing in digital media that enhances their UX.

Target did this by building an app designed specifically to make shopping easier and save customers money. This includes:

• Finding product and offer information
• Allowing customers to take advantage of coupons based on what they already buy, and scanning those coupons at the checkout
• Going card and cash-free, enabling customers to pay in store straight from the app

Can you think of any other customer acquisition tricks these brands have up their sleeves? Are there lessons here you’ve learned that you can apply to your own business? As always, it’d be great to hear what you think if you can spare a moment to leave a comment below: