Why Brands Need To Go All-In With Amazon
Could you imagine life today without the internet? Probably not. We live in a society that is always connected and has access to more information at a faster rate than ever before. It’s hard to think back to when that wasn’t the case, but it really wasn’t that long ago. In 1998, the internet was only used by 41% of adults and most didn’t worry about what they were missing out on by not going online. A vast difference from our world today.
Today, many view Amazon as the internet of 20 years ago. And although some fought to get on the internet bandwagon, eventually everyone did. Fast forward to today, and some brands are now struggling to understand how Amazon fits into their ecosystem. Does this behemoth have limitations? Sure. Is Amazon still working to improve capabilities? Of course. But, just like with the internet, the time has come for retailers across all industries to get on board or get left behind.
So why should marketers not ignore Amazon? For starters, consumers are no longer only utilizing search engines for product research. In fact, nearly 55% of consumers start their ecommerce searches on Amazon. That means not only are they using Amazon for purchasing products, but also the platform has changed the buyer journey from the beginning. Since search volume is growing in nearly every category on Amazon, the same categories are seeing traditional search volume decline with consumers now beginning their searches on Amazon.
With the expansion of Prime Pantry, Amazon Fresh, and the acquisition of Whole Foods, the opportunities to sell product on Amazon are also expanding. With these additional outlets, and Amazon having over 100 million paid prime members globally, brands who have learned to utilize this marketplace are seeing success.
However, even with all the power behind the platform, many brands are still hesitant to consider Amazon as a viable distribution channel. One reason is because some are concerned with the loss of margin. Yes, Amazon may impact your margin, but brands can counteract the margin loss with increased sales opportunities. Although a product may sell at a lower margin, the amount of product you can move through Amazon will offset the numbers. There also may be some products that work better on Amazon. Tracking inventory, and knowing what is or isn’t selling, can help improve profit margins.
Another factor is the amount of competition on Amazon. It is understandable that a brand may wonder how best to stand out in such a crowded space, but brands that incorporate a proper AMS and organic Amazon strategy can be successful. However, to do this they must have a robust AMS marketing plan and optimize their product pages and storefront pages in order to improve organic performance.
Every sales channel requires a different approach from brands, and Amazon is no different. Companies that are leaning into Amazon, specifically AMS, are seeing exceptional growth and performance in the space. Although Amazon is still in its infancy, the power of its consumer database is something marketers cannot ignore anymore. People want to shop on Amazon, so brands need to get on board.
To learn more about our Amazon service offerings, reach out to Rise.