e-Commerce ETOPIA
The Evolution of Amazon
and the Challenges it Faces and Poses Today Over the past decade, the internet has advanced into the desired medium for marketing, advertising, and purchasing of products, goods, and services; e-Commerce has grown to rival traditional shopping in many ways. The retail landscape has evolved dramatically, accelerated by COVID-19, which has thrust us into virtual cocoons and intensified our reliance on digital infrastructure and delivery services.
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Etopia’s Managing Director, Asha Bhalsod
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nursery today
receded by tech giants like Amazon, who joined the space in 1995, and later Google and Paypal who launched their e-Commerce initiatives in 1998, the overall journey of online shopping is far from finished. COVID-19 has been quite impactful in the e-Commerce realm. Pre-COVID, Amazon was treated like a 2nd tier account. However, Amazon is not just another sales account. It’s a formidable marketplace with extensive marketing power. Brands should treat it as a Tier 1 account, and your e-Commerce strategy should reflect that. COVID highlighted how many businesses were not set up correctly on Amazon and how brands did not fully capitalise on all the benefits this marketplace offers. Those brands with an entrenched Amazon mindset were able to meet the demand of a customer base desperate to get first-hand access to staple products. And they have their 2019/2020 profit margins to show for it! Post-COVID, it has become evident how an Amazon mindset will lead to a sustainable, robust business with them, driving profitability for both the brand and Amazon. So, what does all of this mean for e-Commerce and Amazon? Simply that brands will have to remain in tune with the impact Amazon has on the e-Commerce landscape and embrace this marketplace as
a Tier 1 account. It doesn’t make sense to expect success on Amazon when your e-Commerce strategy does not line up with the landscape changes. The Q1 period is always stressful. There is no way of getting around the Amazon reviews and vendor agreement negotiations. Amazon will always push for accruals and allowances in addition to the cost of the goods sold on Amazon. Always remember that your revised agreement is not a list of demands, but a negotiation that you can impact. Go in prepared and find the compromise that benefits both parties. Brands must advertise to stand out in a competitive market. More product views than ever are coming from paid placements on Amazon. When you pay-to-play, you need to optimise every penny spent. And Amazon PPC is not a short-term strategy. A long-term approach will win more clicks and sales from other retailers, boosting your organic placements to boot. Amazon’s advertising business has become the number 3 player in digital advertising and has grown larger than YouTube’s advertising business! They also make more money than Microsoft, Twitter, and Snapchat combined on advertising. Advertising generated $31.2 billion last year and about the same annual revenue as their Prime and subscription services this year. Amazon advertising is certainly a force to
be reckoned with and needs more consideration from a business perspective. Any winning Amazon strategy should focus on listing optimisation. You cannot increase ad spend, run promotions and still expect your listings to convert well. One of the most important levers you can pull to boost sales and increase organic rankings is by creating clear titles and brilliant bullet points to educate, persuade and convert your audience. Think about your holistic approach. Do you have a trader mentality by just selling products? Or are you building a brand on Amazon by capitalising on all its marketing capabilities? Brand Stores offer brands the opportunity to showcase their extensive range of products in a cohesive and personalised way. Brands have more control over how to present products to customers and the type of information published. A+ content allows you to showcase the value of your products by incorporating multimedia content to make your product page more attractive to customers. Don’t forget that Amazon account managers have different skills than national or key account managers. You will have to recruit differently for Amazon. Alternatively, you can appoint an agency as an extension of your in-house team, working in parallel with your brand to achieve your Amazon goal. And it’s no secret that forecasting has
