Special Issue
TECHNOLOGY INTERVIEW
SOLUTIONS
Special Issue
TECHNOLOGY
SOLUTIONS
E-commerce DEEP DIVE
Special Issue
VENDOR SPECIAL
Special Issue Amazon divides opinion in our industry, no
VENDOR doubt. But for brand manufacturers certainly, thereâs plenty to like about this online giant, SPECIAL according to Amazon expert John Ghiorso
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www.opi.net
riend or foe â Amazonâs omnipresence is something all operators in the business supplies industry have to contend with. One person who arguably knows more about the online behemoth than most is John Ghiorso, founder and CEO of Orca Pacific, a full-service agency dedicated to growing the Amazon business of consumer product brands. Ghiorso has been convinced for many years that Amazon will ultimately become the biggest company on the planet, utterly disrupting retail as we know it in the process. An e-commerce thought leader with a reputation for forecasting shifts within the Amazon marketplace, he was a hugely popular keynote interviewee at OPIâs recent Global Forum Online (see Event, OPI May/June 2021, page 50). The core talking points of the conversation are summarised in this OPI interview with Ghiorso.
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OPI: Letâs start with a term weâve been hearing a lot about in recent years â the endless aisle. From your perspective, how does it affect your customers, ie brand manufacturers? John Ghiorso: The endless aisle essentially represents the democratisation of retail. The biggest innovation that Amazon created is access â for brands and consumers. Itâs estimated that today there are about 500 million SKUs on the platform. Amazon has allowed everybody â from big brands and one-man bands to manufacturers selling direct from China, Thailand or India â access to the consumer. This has flipped the dynamics of national organisations and the
traditional status quo, especially the big retailers in the US. They historically had a certain market share. It fluctuated a bit between the biggest operators, but tended to be shared by just a few giants. Amazon has altered that with the access itâs given consumers, meaning those big nationals have to fight much harder for the same share. OPI: Amazon Advertising is a big deal now I believe. What should brands be doing to maximise the opportunities? JG: Amazon Advertising has become non-negotiable in my opinion â itâs pay to play and if youâre not participating, youâre going to fall behind and lose share. Five out of the top ten search results now are paid for. Amazon Advertising can be broken down into two big categories: Search and Display. Search is sponsored ads, display is Amazon DSP which allows brands to leverage valuable data to reach a highly-targeted audience. Most brands have been participating in Search for a couple of years now, but many are still underinvesting in my view. They donât factor in that thereâs the real-time, immediate ROI or ROAS (return on ad spend) and then thereâs a secondary important effect. The latter happens weeks or months down the line and is difficult to measure. I would go as far as to say that one of the biggest trends this year â and this will only continue â is adding budget into the Display side. OPI: How significant are the revenues that Amazon derives from advertising? JG: Advertising is a high margin business. If itâs not its number one profit centre right now, Iâm sure it will be within the next two years. OPI: What other trends do you see emerging as regards the whole Amazon experience?
