Hey E-commerce Managers, Amazon Loses Their 1-Click Patent This Year

To: Digital Marketing Manager, e-commerce clients

I wanted to make sure that you know that Amazon is losing their patent on 1-Click checkout this year. It’s always been amazing to me that they were granted this patent in the first place, but they were (in the US - the EU took the unsurprising view that it was too obvious to patent).

If you aren’t already, I strongly recommend speaking to counsel and the product team to build in a plan to launch a one-click option as early as you are legally allowed.

Background and legal fights

Not only was Amazon awarded the patent on the 1-Click checkout - they also successfully wielded it. Amazon sued Barnes & Noble in 1999 - a suit that was settled in 2002 - and although terms were not disclosed, it ended with B&N removing its single-click system.

If you feel like you’ve seen one-click checkouts in the intervening period, you’d likely be right; Amazon licensed the “technology” to Apple in 2000 for an undisclosed sum. Despite that, it’s been (in my opinion) a drag on innovation, and conversion rates, across the web now for almost two decades. So it’s great news that the patent is expiring this year.

What is one-click checkout?

Targeted at returning customers, the idea of one-click checkout is that you specify your preferred delivery and payment options. In return, any time you are signed in, you get a checkout button on all product pages that places the order immediately with your default options.

This is what it looks like on the Amazon site:

Obviously, this works best for sites that have a high level of both returning visitors who stay signed-in, and a high level of repeat purchases. If your site meets these criteria, there is likely an immediate conversion rate uplift to be had from implementing a one-click checkout that enables instant gratification and faster decision-making.

Over time, it is the kind of technical change that builds loyalty and makes your store more customers’ default for buying anything in your product category.

How much will this be worth to me?

Most teams will need to make a business case for the engineering work to build this into the product - once legal counsel has signed off. I would approach this with a bottom-up model - starting from repeat customers (if you aren’t already tracking repeat customers, here’s how you can do that in GA).

If you first look at how repeat visitors convert to repeat customers, you can build a model that takes a range of assumptions of the conversion rate improvement and spits out a figure for incremental revenue (which you can turn into gross margin with your own proprietary data).

I imagine that for most sites of a reasonable size, the business case will be quite compelling. It’s perfectly imaginable that you could see as much as a 15-20% uplift in conversion rates among returning visitors.

To see what this could be worth you to, you can find your returning visitor conversion rate in Google Analytics like this:

1. Apply the segment “Returning Users”:

2. Select the goal you are interested in to see the conversion rate of the returning visitors (here’s a screenshot from our analytics - showing a low conversion rate because it’s looking only at SearchLove ticket sales vs. all visits to all sections of the Distilled site):

In addition to the direct benefits of improved conversion rate among existing customers who already have their details saved with you, you might also see:

  • Some customers returning to your site more often - because they feel that it’s the easiest site to order from in your niche (this can happen even if they can’t exactly say why they feel that)

  • PR opportunities if you are one of the first in your space to ship a one-click checkout

As always, if you want to discuss any of this, or have any questions, drop me a line and I’d be happy to help.

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