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Amazon Sending Product Samples to Boost E-Commerce Growth

Zacks

Amazon AMZN continues to adopt aggressive retail strategies in a bid to strengthen footprint in the global online retail market.

The company has teamed up with few selected product brands, available on its e-commerce platform, to send free product samples to its customers.

With these samples, customers will be able to verify the product before finally purchasing it which will help the company in enhancing shopping experience. This will aid Amazon’s momentum across its massive customer base.

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The latest move of Amazon seems to be a traditional retail strategy of advertising a product.

In fact, free product samples are ramping up the company’s growing advertisement strategies. Notably, the company is leveraging its vast customer shopping and delivery address data for this purpose.

As of now, the company is dropping off sample products which have been purchased several times like consumer staples, dog food, makeup items and toiletries.

Notably, the samples are being sent to selected customers currently.

The recent strategy of Amazon is similar to targeted ads. Moreover, the company is not likely to stop here. Rather, it is likely to strengthen this strategy and expand the accessibility of free samples to other customers as it is aggressively looking into expansion of its targeted sampling team.

Reportedly, the company had posted a job vacancy last year for a senior-level person for the team.

However, leveraging customer data might pose serious data privacy challenges to the company.

Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. Price and Consensus | Amazon.com, Inc. Quote


Social Benefits to Aid Growth

The latest move is not only going to benefit the company but is also likely to bring social benefits.

With free product samples, the company will be able to eliminate the rigidity of the traditional shoppers who still hesitate to opt for online shopping fearing product integrity.

The move will enable the customers to test, try, smell, taste and feel the product before its final purchase. Further, Amazon has kept the strategy shopper friendly as there is no obligation to purchase product after receiving its sample.

Further, the sampling initiative will also help the sellers and brands to improve their sales growth by expanding their customer reach, in turn aiding growth.

All these benefits are likely to expand the company’s customer and seller base. This bodes well for Amazon’s online retail business.

Zacks Rank and Stocks to Consider

Amazon currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the retail-wholesale sector are TripAdvisor TRIP, Expedia Group EXPE and Booking Holdings BKNG. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for TripAdvisor, Expedia Group and Booking Holdings is pegged at 14.05%, 16.42% and 13.54%, respectively.

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