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The Marketer's Guide to Amazon

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The Marketer's Guide to Amazon + The Marketer’s Guide to Amazon A report by Sellwin, a dentsu company 03 STATE OF ECOMMERCE The Dominance of Amazon 4 MAXIMIZE REVENUE 05 ON AMAZON Build Foundations 6 Assess Brand Health 7 Activate Advertising 11 Measure & Optimize 17 22 WHAT’S NEXT Commerce Innovation TABLE OF CONTENTS 2 STATE OF ECOMMERCE + 2020 was the biggest year for ecommerce to date In fact, ten years of growth were achieved just in three months. Companies with embedded ecommerce practices were best able to quickly pivot and capitalize on the opportunity. U.S. Ecommerce Penetration, % 33 10 years’ growth in ShawSpring 3 months 16 14.4 13.2 11.8 10.7 8.8 9.7 7.2 8 5.6 6.4 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20-Apr Commerce, of Department U.S. America, of Bank Source: Research, Forrester Analytics, McKinsey Retail Practice U.S. shoppers learned new behaviors and even lagging ecommerce categories saw a boost. Online grocery sales were estimated to grow nearly 53% in 2020 as consumers gravitated to the convenience and safety of online ordering. 43% of consumers tried curbside pickup for the first time, highlighting the evolving role of brick-and-mortar stores in the omnichannel approach to commerce. Back-end ecommerce infrastructure moved to center stage. Retailers will continue to invest in supply chain enhancements, to best fortify their position and protect against future disruption. Online pharmacy is the category to watch. Amazon Pharmacy launched in November 2020, two years after Amazon’s acquisition of PillPack for $753MM. Amazon is jumping into the fray of online and mobile prescription ordering and fulfillment services, a highly competitive space led by traditional brick-and-mortar retailers like CVS, Walgreens, Walmart and Target. 3 STATE OF ECOMMERCE + In a year of economic instability, Amazon cemented its dominance in ecommerce Amazon became the go-to destination for consumers to shop safely and reliably as the pandemic accelerated overall ecommerce growth. Investors noticed as well with the Amazon stock price skyrocketing to $3,275 by year end, up +76% from January. After delivering its largest quarter of all time in Q4 2020 at $125.6B, Amazon continues to project historic 2021 numbers across its retail presence, AWS and Advertising businesses. U.S. Top 10 Retail Ecommerce Sales Share Amazon 39.0% Walmart 5.8% eBay 4.9% Apple 3.5% $386.1B Amazon The Home Depot 2.1% Sales Amazon’s strength is in its infrastructure and logistics network that is constantly improving speed-to-customer delivery and building ever stronger loyalty and dependency. Within the past five years, Amazon has quadrupled its warehouse count, with a 61% year-over-year increase in number of warehouses in 2020 alone. This logistics network will not only improve last-mile functionality but expand product category availability as well. *Amazon Advertising grew 64% YOY in Q4 alone, climbing to $21.5B in ad revenue for FY 2020 and stealing share from the Google/Facebook duopoly. Amazon’s portfolio has grown significantly from on-site sponsored advertising to lucrative media channels like Fire TV, Twitch, Kindle, Alexa/Audio, Display and Video DSP as well as new ad units launching in 2021. Even non-endemic brands are cashing in on Amazon’s rich audience data, proving you don’t have to sell on Amazon to succeed with Amazon. *“Other” Category within earnings, widely perceived as Advertising + Maximize revenue on Amazon: Our approach BUILD SOLID FOUNDATIONS Establish operational best practices to fuel a successful and profitable Amazon business: • Sellwin Ecommerce Audit • Policy & Pricing • Retail Readiness • Brand Stores ACTIVATE ADVERTISING Deploy a full-funnel media strategy: attract, engage, convert and retain • Scalable across diverse portfolio of media channels • Deterministic first party data powers audience- based strategies MEASURE & OPTIMIZE Access and analyze rich data sets: • Amazon Retail Reporting • Advertising Reporting & Insights • Amazon Marketing Cloud + Build Solid Foundations Back-end operational efficacy is foundational for driving long-term success. Amazon is a vast and complicated marketplace and focusing on critical business elements is a worthwhile investment. An audit of your current brand presence is a strong starting point no matter where you are in your Journey: Just starting out, preparing to launch products in a new category or simply wanting a refresh. BUILD SOLID FOUNDATIONS + Success starts with a Sellwin Ecommerce Audit, an actionable report that assesses your brand presence ADVERTISING • Sponsored Ads • Share of Shelf / Share PRODUCT DETAIL of Voice PAGE • Media efficacy • Copy Review • Buy Box Improvement • Reviews & Ratings SUPPLY CHAIN • Inventory Performance FINANCIAL • Demand Forecasting • P&L Assessment • Price Sensitivity • MAP Violations CREATIVE • A+ Content INNOVATION • Brand Stores Maintaining competitive • Image quality and advantages video usage • Driving Incremental commerce opportunity • Testing & betas • Research & Insights Our audit suggests recommendations for improvement, analyzes the level of effort required and anticipates the impact of each change. To request an audit for your brand, contact us at [email protected]. BUILD SOLID FOUNDATIONS + Create strong policies around authorized sellers and pricing Authorized Sellers Who can sell your product? Amazon is a vast marketplace with a large and complex grey market. For that reason, many brands fear brand dilution from resellers and how it can impact customer experience. We suggest implementing authorized seller policies, which include an understanding of possible business names and websites that chosen sellers can operate on. The goal is to limit distribution of your brand’s product and create a legal foundation to protect your brand and clean up the distribution channel. MAP (Minimum Advertised Price) At what price can they sell? A good research starting point will be to assess the competitive landscape to set the optimal MAP policy across retailers and selling partners. While Amazon (as a retailer) does not recognize MAP agreements for most brands, a strong policy to authorized sellers will prevent pricing violations on grey market goods and provide a defensive strategy in case you need to pursue legal action. BUILD SOLID FOUNDATIONS + Perfect your product detail pages As customers on Amazon, we’ve all come across detail pages that offer terrible shopping experiences. Lack of information, misleading or confusing images or out-of-stock items result in customers being unable to complete their purchase. Even among seasoned brands and sellers, there’s a huge opportunity to improve the detail page experience. This concept of digital merchandising is known as Retail Readiness and it’s necessary for any seller or brand on Amazon to launch product and advertising campaigns successfully. Components of Retail Readiness Product Detail Page Content • Relevant titles, SEO-optimized copy and clear product images A+ Content • Enhanced branded content on a PDP, created through self-service tools Inventory • Maintain 95% in-stock rates to win search algorithm and Buy Box Buy Box • “Win the Buy Box” through Prime offering, pricing and inventory Customer Reviews • A PDP must have 15 verified customer reviews to promote products Star Ratings • A 3.5-star rating or above is ideal Click here to see a comprehensive guide to Retail Readiness on our website. BUILD SOLID FOUNDATIONS + Maximize your Amazon Brand Stores Brand stores are an equally important complement to the PDP, representing a virtual, multi-page storefront on the Amazon website. They are created through a free, self- service tool that allows brands to tell a unique, branded story and stand out from competition. Stores allow brands to: Utilize branded rich content to highlight product and collection features Generate new traffic sources for the brand and increase organic ranking Create a multi-device experience across desktop and mobile It’s important to note that stores are only available for vendors and sellers enrolled Amazon’s Brand Registry. This program enables brand owners to control their product listings and content and improve the customer shopping experience. In addition to Brand Stores, Amazon’s Brand Registry unlocks multiple marketing and advertising opportunities like A+ Content, Sponsored Brand tools, Amazon Brand Analytics and more. Click here to see Amazon’s Brand Registry, Explained on our website. + Activate Advertising Amazon is forging aggressively ahead with their plans to dominate digital advertising market share. Ecommerce media spend is one of the fastest growing categories and Amazon is leading the charge. Brands can leverage Amazon’s reach, unique platforms, impactful formats and unmatched shopper audience data in impactful ways both online and offline. ACTIVATE ADVERTISING + A great Amazon strategy covers every step in the consumer journey AWARENESS CONSIDERATION PURCHASE LOYALTY It’s important to develop a full-funnel strategy. Performance works best when supported by branding and every performance ad reinforces and shapes how customers perceive the brand. There is more in-depth information about this on our website. Check out Mastering Your Media Strategy: Why Amazon is So Much More than a Sales Channel ACTIVATE ADVERTISING + Amazon’s predictive data helps brands reach consumers across the funnel AUDIENCES AWARENESS Mass Reach or In-target demographic but not browsing products or category Have browsed category but have not CONSIDERATION browsed or purchased brand products
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