So what’s this 1-click checkout?

Amazon is a massive e-commerce behemoth now, but back when it started in 1997, it was just an online bookstore and competed against popular booksellers like Barnes & Noble.

In 1997, Amazon filed for a patent for a business process called 1-Click. What this essentially does is, that consumers can buy any product in their online store with a single click. So once you enter your shipping address and payment/card details once initially, these get saved on the site. And on every product page, beneath the Add To Cart button, Buy now with 1-Click was added. 

It sounds just a simple idea now in the world of e-commerce, but this was during the height of the dot com boom, where every idea was novel and new. The science of Product Management didn’t even exist, as companies, and even consumers were still figuring out how to even use this online marketplace.

Even the people in charge of reviewing and awarding the patent didn’t have much expertise. This allowed Amazon to get the patent so easily which became very valuable and gave a huge advantage over its competitors.

So how did this help Amazon?

Higher conversion rate

Let’s start with one of the most important metrics that e-commerce companies grapple with, The cart abandonment rate. In simple terms, it’s the percentage of, addition to carts, that never translated into the purchase. And that number on average is as high as 70% even today. It’s like 10 people walked into your store, and spent a decent amount of time in looking at items and choosing the ones they want, but 7 of them just leave without buying them. With 1-Click checkout, it completely eliminated the Add To Cart. It also amplified impulse buying and cut down delayed purchases.

Frictionless purchasing

Let’s look at our experience with e-commerce purchases. We search and browse the products, then we add them to the cart, then we go for checkout and add/select an address, and add/select payment details and make the payment. Only then our ordering is complete. What 1-Click did was, cut these 3-4 steps that resulted in order into just 1 single step. It made it simple and smooth, for users to buy the product.

Large user data of customer base

It nudged customers to allow and trust Amazon to save their personal data, and back then people were afraid to even use their cards online. This meant Amazon has a large database of users to sell to. And they transitioned from an online bookseller to a larger e-commerce platform, by launching the Amazon marketplace, after 1 year of filing the patent. So third-party sellers lined up to join the marketplace, mainly due to the customer base Amazon gives access to.

This data also helped Amazon in the later years to improve product suggestions and increase repeat purchases, by fine-tuning their algorithms.

Licensing the 1-click

This has become a byproduct of the patent. Steve Jobs loved it so much, and he licensed the 1-click to use in iTunes and other Apple services, for a fee of $1M per year. Amazon also sued Barnes&Noble for infringing on its patent through its Express Lane checkout and refrained them from using it.

Future

The patent expired in 2017, which allowed any e-commerce platform to use it. But with the saturation of industry and a lot more advancements, it is not so revolutionary anymore.

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