We recently published an article at IdeaXchange about the top trends for Amazon in 2020 that brands need to know about. Here in this article, we’ll describe what we’re doing about those trends, and how you can take action.
Trend #1: Amazon Advertising is Forcing Manufacturers to Become Omnichannel Marketers
If you don’t have VP of Omnichannel, a Chief Technology Officer, or an SVP of eCommerce working in your business today, you’re probably thinking, “how do we become Omnichannel Marketers?” And the answer is that there are many ways but it starts with education for executive leadership about how the consumer journey has evolved. One report we’re using to help educate our clients is from a market mix model study that Analytic Partners ran last year. In the study, they show that Amazon Advertising (both sponsored ads and DSP ads) has a significant impact on consumer purchase behavior off-Amazon - oftentimes producing more sales lift off-Amazon than on-Amazon!
This insight, combined with new offerings from Amazon Advertising is literally forcing brands to think and act differently. Beyond education, we’re helping our clients bridge the gap to Omnichannel marketing by rolling out new offerings that will reach their target customers across multiple media formats like Search, Display, Video, and Social. And, we’re expanding reporting capabilities to demonstrate the broader impact by helping implement Amazon Attribution Beta. This platform provides better cross-channel and cross-device insights about how paid media impacts sales on Amazon. We’re also expanding our ad creative capabilities to help brands drive results from their ad spend. The overarching effect will be smarter clients that grow faster.
Trend #2: Brands Are Investing in their eCommerce Stack
Most brands have more than one person or entity helping them sell products online - perhaps an Amazon agency partner like Amplio Digital, and an analytics platform like Profitero, and a Vendor Manager at Amazon. But the leading brands have rapidly accelerated the number of people and/or entities (e.g., tech companies, agencies, brokers, tools, connectors, etc) in their eCommerce effort that we can now officially call it a “stack,” or more specifically, an eCommerce Stack or an Amazon Stack. With the complex set of tasks, functions, integrations, strategies, data points and tactics available nowadays with Amazon, it’s important to have the right solution to get the job done so it can be done efficiently, effectively and integrated with the rest of your business systems and processes.
To help clients build, evolve or implement their Amazon stack, we have invested in technology that we use for all clients including integrated analytics suites. We’re also accelerating the consulting work we do to help brands build their own stack as opposed to just throwing money at people - including professional services like agencies. (We’re owning the fact that we need to provide outsized ROI for every dollar brand manufacturers spend with professional services).
In addition to guiding brands through the stack buildout and implementation, we recognize our role is shifting. Our vantage point across many brands, providers and strategies is now perhaps our greatest asset. Our perspective gives us the ability to serve our clients as a trailblazer of innovation, and we are looking to provide that upside to clients so they can accelerate growth based on their specific needs and a tailored stack.
Trend #3: Brands Must Respond to Macro & Micro Threats to Amazon’s Moat
Have you felt your contribution margins shrinking on Amazon over the past two years? You’re not alone. It’s happening because of the very real competitive pressure that Amazon is fielding at both macro-economic and micro-economic levels. Amazon has grown at an abnormal rate and its shareholders want to see continued growth. As a result, Amazon is stealing market share from competitors and those competitors are in turn applying pressure to protect their market share. Amazon-like most large multi-national corporations with leverage - diverts that pressure to the supply side of the supply-demand equation, which is brands. That means that Amazon is trying to get you, the brand, to pay for Amazon to maintain and grow its market share… and as you can imagine, Amazon will gladly accept as much money as you can possibly afford.
So, to alleviate the risk that brands have of footing the bill for Amazon and Wal-Mart to compete at the Macro level, we are adding support for multi-channel eCommerce for clients. We believe that brands can stay above the fray if they’re set up to win on any of the marketplaces where end-consumers shop. Expanding marketplaces provides a counterweight to Amazon’s leverage and increasing sales at the same time. As you can imagine, we are eager to help our clients with more channels than Amazon to strengthen our vantage points and tap into more sales. We know that Amazon is the dominant player in terms of revenue, but recognize that diversifying sales channels is an important strategic shift we need to make to respond to this trend.
Feel free to share what you’re doing with us on social at Facebook, Twitter or Linkedin. Also, subscribe to our blog so you can learn when we publish our favorite “eCommerce Stacks” of 2020.