Selling on Amazon has been, in recent history, a controversial question for many brand owners and managers who have concerns about Amazon's size and control and a brand's perceived inability to control the customer experience on the Amazon site. Now the answer to “should this brand be on Amazon?” is unequivocally “yes” given that nearly $4 in every $10 in ecommerce sales occur on Amazon. More and more retail dollars are spent there and more and more brands are making their way there - requiring a proactive stance to stand out and succeed.
Big and getting bigger…
With some 300 million users and climbing and in excess of 3 million sellers, Amazon is massive.
55% of users BEGIN THEIR SEARCH on Amazon when shopping online. And even when a shopper has found the product on an individual retailer’s site, 9 out of 10 will go to check availability and pricing on Amazon.
The recent acquisition of Whole Foods illustrates Amazon’s trend of pushing downstream toward the customer to provide quality products they want, and get them to their customers faster. For example in the near future - Prime members will get access to special incentives in-store and be able to use Whole Foods as a pick up location for deliveries. For sellers this simply means more ways to differentiate your brand and get in front of motivated customers - that can and must be managed to succeed.
Consumer Sentiment….Bargain Hunters vs Luxury Brand Buyers
Gone are the days of the excuses such as “my brand’s value will be eroded by Amazon” and “my buyers do not shop there,” or “my brand doesn’t fit with the Amazon marketplace ethos”. ALL brands, luxury included, need to embrace the Amazon marketplace and be proactive about crafting and controlling their presence there as it will be a crucial component of brand strategy. Adoption among luxury brands is happening, and accelerating. Underscoring this trend is the fact that Amazon is about to become the largest retailer of clothing and apparel - its fastest growing sales category on the marketplace. Brands that hold out risk the damage done by resellers and unauthorized sellers, or possibly worse - absence in front of a motivated buyer - or loss of the motivated buyer due to a substandard experience.
Although there are many considerations to take into account in terms of how a brand sells (to Amazon vs on Amazon for example) and how it integrates the Amazon marketplace into its selling strategy (such that the brand continues to sell profitably while not cannibalizing their efforts in other channels) your customers DO shop there and at an increasing rate. Be where your customer is.
Control over your Brand and Products
Take control of selling on Amazon, instead of letting others resell your products, including fraudulent knockoffs and unauthorized resellers. Both large and small brands, should be concerned about controlling who sells their products on Amazon (and other channels) and how their products are described and their customers communicated with. This control is really about four key areas:
- Control your brand and product message, including tone and accuracy
- Control your sellers/distribution
- Control and protect your brand’s integrity
- Control your pricing/margins to ensure sellers are respecting MAP (pricing)
The ability to showcase your brand on Amazon is getting better and better with, for example, the ability to provide more detailed product descriptions and have dedicated seller/brand pages via Amazon’s brand registry. And while protection of brand integrity is crucial, the Amazon marketplace will also become an extension of a brand's ability to communicate it's experience to the customer with these new tools.
The decision to sell on Amazon should be clear given that Amazon represents not only a significant sales opportunity that cannot be ignored, but also an important component of brand protection, promotion, and customer interaction. Brands need to take control of and manage their presence here. Customers are shopping on Amazon and a successful e-commerce strategy in today's retail marketplace requires a strong Amazon presence. Amazon has created unprecedented consumer trust, has the customers to prove it, and if the marketplace is approached correctly - brands can leverage this moment to succeed on Amazon.
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