Amazon Begins Data-Based CPG Sampling: Just The Facts

Amazon introduced a targeted product sampling program which offers a number of benefits to the ecommerce megastore, including scaling subscribers and increasing the profile of some of their brands. The sampling program relies heavily on the consumer shopping data Amazon collects, creating opportunities for additional advertising revenue while ringing some cautionary bells for consumers and marketers concerned about privacy and proprietary data.

What Is Targeted Sampling And Why Is Amazon On Board?

Targeted sampling is a practice companies use to introduce new brands, or brands that need a push, to existing customers, often based on data collected from customer ordering profiles or other data metrics. For example, a free sample bag of pet food might be added to a box of pet toys, hopefully enticing that customer to later buy a full-size bag. According to Amazon, the Amazon targeted sampling program is designed to “surprise select customers with samples that we think will be delightful and helpful.”

Amazon quietly rolled out their pilot targeted sampling program last fall. A more aggressive advertising tactic than just display ads, Amazon’s targeted sampling leverages an advantage competitors like Google and Facebook don’t have — a wealth of consumer data. At this point, consumers can opt out of the Amazon sampling program, but consumers cannot opt into the program. And Amazon hasn’t commented on when the program will expand.

How Can Brands Benefit From Amazon’s Targeted Sampling Program?

Amazon considers their targeted sampling an extension of their brand recommendations. Applying the accuracy and depth of Amazon’s machine learning and fulfillment capabilities, the sampling program can successfully deploy samples to consumers who might benefit from the increased brand awareness of these consumer packaged good (CPG) products. Plus, sampling provides Amazon with an opportunity to share how well they know their customers, provide another paid service option for brands selling on their platform and drive incremental conversions and revenue. All in all, it should be a win for CPG brands that often use sampling, but wish they could be more targeted with their sample distribution.

How Will Amazon Benefit From Amazon’s Targeted Sampling Program?

There are more than 100 million Prime subscriptions on Amazon, but their latest data-based sampling isn’t limited to those subscribers. Continuing to expand their subscriber business through Prime, a more loyal base with recurring purchases, is a goal of the ecommerce giant, as are evolving innovations that keep Amazon consumers engaged with the brand. The new sampling program takes the place of the recently shuttered Amazon Prime Samples program, but with a broader selection of CPG products to offer, it should lead to increased engagement, more data points and the opportunity to grow sales volume.

What Are The Challenges Of Amazon’s Targeted Sampling Program?

As has been widely discussed this past year, consumers and digital users are wary of privacy breaches across all sources of social media and econsumer engagement. Privacy concerns could lead to a wave of sampling opt-outs, rendering the program much less useful for Amazon and participating brands.

CPG brands also know that, despite the potential boost to their product, Amazon still essentially owns the customer and the customer data. Without access to that information, some marketers consider Amazon a silo that doesn’t necessarily serve a broader marketing plan. This could impact their brand’s willingness to participate in the Amazon sampling program. Additionally, brands may be reluctant to participate if they believe Amazon will use the consumer purchase data to innovate or better promote Amazon private-label brands.

CPG marketers will have to consider how the Amazon sampling program factors into their advertising and branding strategies and their overall approach to brand awareness given the advantages and pitfalls of alignment.

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About the Author

Sarah Cavill is a Marketing Communications Writer at Digital Media Solutions (DMS), the fastest-growing independent digital performance marketing company. DMS helps its clients accelerate growth by deploying diversified and data-driven customer acquisition solutions that deliver scalable, sustainable and measurable marketing results. DMS performance marketing solutions connect the right consumers with the right offers at the right time to achieve the marketing objectives of our clients. DMS is continually innovating to provide new and emerging media and technology solutions that minimize waste and maximize results across the most competitive industries. Since its inception, DMS has demonstrated incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016, 2017 and 2018.

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