Amazon's Instant Payment Program
One of my most memorable projects was launching the Instant Payment Program at Amazon for the Recommerce Team, the group responsible for running our Trade-In Program. This program enables customers to exchange items they no longer use (from a list containing thousands of eligible items, including Amazon Devices, video games, and more) for an Amazon Gift Card. Our mission was to put as much gift card value in as many customers’ pockets as possible while maintaining a healthy sell-side business. By distributing value in the form of Amazon Gift Cards, Trade-In fuels the Amazon flywheel, extending customers’ purchasing power and keeping them in the Amazon ecosystem.
Launching the Instant Payment Program was important for the Trade-In Program’s growth because the categories involved were not growing fast enough relative to other businesses. One of the biggest issues was that customers had to wait 7-10 days after they ship their used items before receiving their Amazon Gift Card. With the launch of the Instant Payment Program, eligible customers received their gift card value within seconds.
This drove an additional 1.1M customers' engagement and distributed $30M+ in Gift Cards, all while delivering an OP Profit of $1M during that quarter. We also measured success based on an additional 5% attachment rate between units traded and units purchased.
Project Background
Amazon was losing business to competitors who had a better trade-in experience. To increase our market share, we had to overcome two challenges. First, we needed to drive awareness because less than 10% of Amazon customers knew about the trade-in program. Second, we had to reduce the wait time so that customers don’t need to wait between 7-10 days before receiving their Amazon Gift Card.
An example of a competitor who had a better trade-in experience in the video games category was GameStop. They had a well-established trade-in program that enables customers to buy and sell more easily at their physical locations and allow them to swap these games on the spot. This ecosystem is successful at GameStop because the customer is at the center of it. As GameStop describes in their 2015 annual report, their 6,100 stores around the world “create a social community where gamers of all kinds – from casual to the serious, console to PC – can discover the magic of video games.” Purchasing a game earns you loyalty points, and trading in gets you even more. This is because trading in and then buying with that discount is at the focal point of the GameStop value proposition – they are synonymously linked together. GameStop issued more than $1B in trade credits in 2015, “helping customers fund the purchase of their video game merchandise as part of the buy-sell-trade program.” The customer is incentivized and directly relates to that value proposition because they are rewarded as a fellow game fan. Within their stores, 25.4% of GameStop revenue came from pre-owned, and value video games products vs. 6.1% for Amazon used VG products. This is a similar situation for the consumer electronics category, where other retailers enabled customers to get trade-in value appraisals and swap these for newer models right away.
The Recommerce Team had to figure out how to address these challenges, and my role was focused on building the customer experience (as opposed to warehouse operations, logistics, or pricing). To address this, I had to look at multiple resources to understand customer pain points. First, I analyzed our sales and trade-in metrics around the relevant categories (books, video games, consumer electronics). Second, I partnered with the Customer Support team to investigate any customer feedback and issues around trading in. Finally, I looked at third party sites and forums around gaming to understand user sentiment. I discovered that when choosing which trade-in or selling service or website to use, the speed and ease of using a program becomes an important consideration. This is particularly true online, which can be perceived to have many steps and interactions before submitting an item and receiving payment. While requiring a trip to the store to trade in, physical store programs typically allow users to complete the transaction and receive payment in one visit. When considering whether to use a trade-in or selling platform, potential users want to know that the process will be worth the time and effort. The value usually determines this that a user can receive in exchange for their items, but can also be influenced by knowing that their items will be utilized and valued by their next owners.
After sharing my findings with the team, I got approval from the team to build the Instant Payment experience. The program’s goal was to address the two challenges we had around trade-in program awareness and payment friction. The instant quote feature allowed users to easily evaluate the offer before deciding whether to trade an item. This is an advantage over in-store programs (where the amount to be offered is unknown in advance) or online selling websites (where the length of time needed to make a sale at a listed price is undetermined). With this program, Amazon Gift Cards were deposited immediately to their account balance, allowing the customers to fund and purchase their next item right away. The total customers measured the success criteria, and Amazon Gift Card generated and spent.
Project Challenges
There were many challenges from discovery to launch. First, I managed multiple dependencies and made sure that all teams were aligned. I led the customer experience and worked with 2 Sr. Product Managers responsible for operations and pricing, 1 UX designer, and 12 Engineering teams located in Seattle and Bangalore. On top of this, I also had to work with other teams from (1) Amazon Devices (2) Video Games (3) Product Detail Page (4) Gift Card (5) Payments, (6) Catalog, (7) Risk, and (8) Personalization teams. To launch this program, I had to get approval from all the dependent teams, including Director and VP-level reviews. I also led product, business, and facilitated design review sessions over the course of six months.
Second, I had to work with the UX team to develop an experience that will not be confusing or disruptive. The new feature required additional messaging to explain this new way to earn Amazon Gift Cards. This required user education in product detail pages, category landing pages, and marketing emails. I first wrote Amazon Press Release and FAQs (PR-FAQ) and Product Requirements Documents (PRD) explaining the customer and business values to define this experience. Afterward, I worked with the UX team to conduct five rounds of usability studies, presented our concepts to a 50 University of Washington students class, collected feedback, and iterated on the new trade-in process. I had the option of keeping the old trade-in process where customers had to go through several steps before getting the Amazon Gift Card. These steps include: providing the item condition to get the appraisal, reading terms and conditions, confirming trade-in, printing the label, shipping the item, and then waiting 7-10 days. Instead, I proposed a new solution that enabled customers to get the Amazon Gift Card after a few clicks. To do this, I evaluated which trade-in steps can be combined and simplified. For example, instead of customers having to answer several questions before getting an appraisal every time they trade-in a video game, we offered a single trade-in value immediately. I also suggested combining some steps around printing labels and shipping instructions. This decision resulted in a better customer experience because it allowed customers to continue shopping within Amazon with no interruption.
Third, after completing the design proposal and getting the necessary approvals, I had to work with multiple engineering teams to discuss different ways to implement the solution. The program has several dependencies as it requires building a system that pulls eligible items from the catalog, calculates risk, and process payments, all in a few milliseconds. We had the choice to show this feature to everyone, which would have caused some latency in page loads. Still, I suggested that we focus on targeting customers based on their historical purchases and their propensity to opt into the Instant Payment program. This decision resulted in saving engineering efforts by at least three months and targeting the right customers.
Finally, I also had to set up an A/B testing experiment where I added personalized total trade-in value by pulling customers’ historical purchase, calculating all eligible items, and offering that total amount as a promotion. I selected a random distribution of targeted customers with two design variations and was responsible for setting up the tool (Weblab), defining the success criteria, analyzing and interpreting the results.
Results
After four weeks of running the experiment, we hit statistical significance and decided to dial-up the program. This drove an additional 1.1M customers' engagement and distributed $30M+ in Gift Cards, all while delivering an OP Profit of $1M during that quarter. Of this, 58.8% of the Amazon Gift Card issued were spent immediately towards a new purchase within 2 days.
While the program was successful, there are some key learnings along the way. First, I could have executed faster by simplifying the solution earlier in the process, instead of trying to build a perfect product. Second, I learned that involving the UX team and the Engineering team during the inception and prototyping stage could have exposed key risks that were proven to be blockers later on. Third, understanding other teams' priorities were vital to speed up the review and approval processes, thereby removing bottlenecks and improving project implementation. Finally, to successfully drive awareness and launch marketing campaigns, it is important to have a ubiquitous customer experience across desktop, mobile web, and app experiences to avoid blocking Marketing teams from launching cross-platform promotional campaigns.
Today, the program has evolved to target customers who own Amazon devices. The solution has also been reused to enable trade-in of old generation Amazon Echo devices for newer ones.