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Amazon Nudges Shoppers to Buy Less Amid Coronavirus Pandemic

Amazon Nudges Shoppers to Buy Less Amid Coronavirus Pandemic
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Friday, 17 April 2020 08:50 AM

The pandemic has many of us acting in unusual ways, and the world’s largest e-commerce company is no exception. In a stunning reprieve from the prerogatives of capitalism, Amazon.com Inc. has begun discouraging users from buying things they don’t need.

Amazon is suppressing extraneous consumption in various ways, according to a report in the Wall Street Journal.

It isn’t planning its normal promotions. It’s not telling you what other customers bought. It has even delayed Prime Day indefinitely. The retail giant is overwhelmed with essential orders. It doesn’t need to convince you to upgrade your TV right now.

Of course, Amazon turning down the dials on its shopping machine is a reminder of how much control it has over the behavior of its users in the first place. The company's algorithms are always nudging customers this way or that. In normal times, it might direct you to a higher-priced product if you seem like the type of person willing to overspend, or it could keep pushing you to pull the trigger on that espresso machine you thought about buying.

It's not just Amazon. Other companies are easing up on that most fundamental form of online manipulation—targeted advertising—as they slash their marketing budgets. Expedia Group Inc. Chairman Barry Diller says the company normally spends $5 billion on advertising in a year but probably won’t even hit $1 billion this year. The overall travel industry has been cutting back sharply on advertising, but the economic trends are similar in other industries. This will make ads cheaper, while also leading to less money flowing through the system. Perhaps the most telling sign of hard it will be for the advertising industry is that Google is going to try to cool it on hiring."

This won’t last forever. Eventually it will be time to turn the economy back on, and the infrastructure of internet-fueled overconsumption will be right there to help. “What is about to be unleashed on American society will be the greatest campaign ever created to get you to feel normal again,” as Julio Vincent Gambuto, a writer and director, wrote on Medium last week. The consumption economy will be counting on you.

Amazon, whose stock price is up over 40% since hitting a low on March 12, may turn the spigots back on earlier than companies facing deeper crises. Once it gets its supply chain back in order, it will return to natural state of being: imploring you to buy things you don’t need.

© Copyright 2020 Bloomberg News. All rights reserved.


   
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2020-50-17
Friday, 17 April 2020 08:50 AM
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