Did Amazon Just Patent the Next Big Thing in E-Commerce?

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Amazon user-generated reviews are a popular resource for shoppers looking for more information about particular products, even outdoing Google’s e-commerce search, a primary competitor. But now, Amazon has taken the next step to provide more innovative information sources by inviting merchants to join a test program that includes new forms of video content on the platform.

L2, a business research firm, stated, “This feature is a logical step given how often consumers watch how-to and product review videos before making purchases.”

“By adding the feature, Amazon clearly aims to keep shoppers on its own site, preventing them from migrating to YouTube or social media platforms.”

While the addition of video is likely to benefit customers, they also have more to gain. According to Quartz, Amazon has received a patent for “content-based price reductions and incentives.” Based on the information in the patent, “Customers in an electronic environment can be presented with the option to receive advertising, such as audio, video, or interactive content, in order to receive discounted pricing or similar benefits.”

The potential new paradigm associated with the patent, which Amazon was awarded in October, could allow the online shopping giant to display video ads, including product reviews, on item detail pages. As the customer views the ad, the price of the item could drop.

Whether another retailer could use the system depends on the strength of the patent, though it is possible that no other store outside of the Amazon system could provide this option to buyers.

The move could help Amazon keep their prices low, as online stores can’t effectively use loss-leaders – products sold below their actual cost to the retailer – as a method of drawing in shoppers. In most cases, in-store buyers invest in the shopping experience, choosing to stock up or simply purchase multiple items.

Online sales don’t have this inherent experience, so the presence of the patented videos could allow sellers to provide shoppers with discounts in exchange for a time investment.

Amazon is also making a move against other online platforms, such as YouTube, Facebook, and Instagram, who generate review through digital ads. Additionally, Amazon may be able to provide dynamic pricing based on how valuable that particular shopper’s viewing time is.

The patent on Amazon’s one-click checkout experience expired this year, so the larger question is if the new incentivized video system is the next big thing in online shopping, providing Amazon with a distinct advantage over other e-commerce platforms.

Videos will begin being posted on Amazon in mid-December, so their value will likely soon be better known.