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IMPACT FELT IN TRANSFORMED BY Frequency of Shopping: Non-Prime v Prime Members DIFFERENT SECTORS ’S FOCUS ON CAUSING AMPLIFIED BY Your margin is my opportunity Beautifully, wonderfully dissatisfied B2C CPG Total household spending Brand-owner implications Whole Foods Takeover Electronics & Auto Fashion Moving beyond selling “the Earth’s Biggest Selection”, Amazon is a leader in consumer-facing Daily 2x or more a week There are many ways to center a business. You can be competitor focused, you can be Traditional retail and eCommerce is the growth driver for CPG in Amazon is less concerned with a product or Companies can support Amazon by $13.7bn takeover of multichannel grocery Amazon’s share of the US Computer & U.S. apparel sales climbed 3% in 2017 while AI voice assistants and enterprise cloud services. Its insatiable appetite for new markets product focused, you can be technology focused, you can be business model focused, and eCommerce competition the next 5 years with 9 out of 10 dollars of brand being category leader so long as it is a focusing on total contribution dollars. retail with over 470 stores. Cut prices on Electronics category has declined from 28% Amazon's apparel sales grew 25%. Most 6% retail growth in 2016 being online. sales leader. It is not worried about margins Maximise profitable sales by boosting high volume stables by up to 43%, installed in 2016 to 25.5% despite 60% of customers recently, Amazon announced Prime means competitors must always be on guard against its next moves. As it transforms digital 15% 16% there are more. But in my view, obsessive customer focus is by far the most protective of 31% The Power of Prime Structural change happens when a for individual items. It looks from a volume, concentrate on profitable items Amazon lockers and introduced Prime claiming to have purchased in last year. But Wardrobe, its take on a clothing subscription JD.com and remember that prices will be tested commerce it is not leaving retail behind. Amazon’s Q1’18 financial results reported $4.26b from vitality. Why? There are many advantages to a customer-centric approach, but here’s the big Amazon’s most important product is not a product category goes >20% online, grocery perspective of total household spending. savings and in-store benefits. A new the introduction of “Try now, buy later” 30 service. This disruption is complemented by Flipkart by Amazon’s dynamic pricing algorithm. “Physical Stores” – grocery, book and convenience stores across the US – that make the one: customers are always beautifully, wonderfully dissatisfied, even when they report being but a membership. Prime’s ability to funnel new probably won’t but transformation is being This can be a problem for CPG companies eciency-first ideology means a “culture day trials of electronics over £400 is set to the Echo Look which uses machine learning “destroyer of physical retail” a bigger name in bricks-and-mortar than Sears and JCPenny. happy and business is great. Even when they don’t yet know it, customers want something ideas to >100m loyal members drives growth and Otto Group driven by: who don’t generally operate on those terms. clash”, greater centralization and lay-os. disrupt the market again. In the UK Amazon to act as a “hands-free camera and style subscribers spend $1,300 per year Better Prices is also the 2nd largest supplier of car parts. assistant” to suggest outfits and better, and your desire to delight customers will drive you to invent on their behalf. innovation. 25% of consumers in UK, , Tesco Mobile Commerce Non-Prime spend $700 per year , , 15% . Amazon’s first forays into On-Demand & Subscription Omnichannel Opportunities crowdsourced fashion advice. scalable grocery delivery via AmazonFresh & New Retail Experiences Stronger Health Assortment AmazonPantry are only available to Prime members Targeting Margins as its hyperlocal 1-2 hr delivery service . More Prime Benefits AmazonBasics oers simple consumer Own Brand Leverage Unprecedented growth “Amazon is not a monolithic operation, electronics and accessories. Targeting BEHAVING LIKE Last Mile Delivery Boost After diculties recruiting fashion brands As the 2nd company to reach a $1trn market value, Amazon peripherals that stores and brands made but rather a collection of businesses because of its inability to follow pricing is expected to grow at 16% average compound growth in Avoiding Day 2 FUELLING Competitive Transformation THAT large margins on reinforced low-cost sales through 2025. It accounts for 49% of the US UNITES standards & image concerns, Amazon turned 4.19bn sharing resources, including a channel “Day 2 is stasis. Followed by irrelevance. Amazon describes the environment for its products NEW COMPETITION Brands Competing leadership but also created a better starting eCommerce market and 5% of all retail spend which is to own brands. It is now predicted to be the Followed by excruciating, painful decline. and services as ‘intensely competitive’ and seeks NEW BRAND SELLERS OFTEN USING MADE WORSE BY point for all consumer electronics purchases. predicted to be 10% by 2020. Its strength is in developed Prime Day Sales $ (Amazon.com), logistics, and a common Marketplace Sellers Fulfillment by Amazon with(in) Marketplace largest US seller of apparel in 2018. Followed by death. And that is why it is to change every category it enters. It views its main B2B2C The China Crisis markets with 41% commerce share in Germany, BRANDS PARTNER 2.41bn technological foundation.” Ben Thompson always Day 1.” current and potential competitors as: Marketplace competition Amazon opened up a fixed price Marketplace FBA stores sellers’ products in Amazon's Marketers must decide whether to wholesale Competition is fierce at the bottom of the 27% in UK and 20% in . is an APAC priority due 1.52bn Search eBay in 2004. 3rd-party sellers gain access to fulfillment centers, pick, pack, ship, and directly with Amazon or allow other enterprises to sales funnel - the likes of Samsung or to Amazon’s relative weakness and 1% share in China. True Customer Obsession Online, Oine, & Multichannel Retailers Amazon's customer base, and Amazon provide customer service for these sell their goods, too. Brand Security and Control Unilever are not competing with their 1P Model for Brands 0.9bn Amazon aims to be the start of the path to purchase Alibaba Resist Proxies: Process, Surveys Publishers, Vendors & Distributors expands the oerings on its site without products. It’s estimated that 60% of top are significant challenges within Marketplace. usual foes but 3 week product lifecyle Under Armour’s partnership with Amazon is for all shopping purposes. Already in the US & UK Rakuten Embrace External Trends Brand/Product Manufacturers more than 50% of product searches start on Amazon. having to invest in additional inventory. sellers on Marketplace use FBA to o-load Brands can now ensure that sellers use correct pseudo-brands from China. They can get premised on the “1P” model. “The 1P model is 2015 2016 2017 2018 SUPPORTED Its domain strength, recommendation engine, data inventory to Amazon because it is hard to visual assets but agile sellers can out maneuver a smart watch lookalike turned around in where you have a relationship with Amazon BY High-Velocity Decision Making Media Publishers & Distributors Increased Sales (+53% of units sold) Amazon has separate retail websites for US, UK and IE, France, , compete on price while handling fulfilment big firms: even Nike finally agreed to be a seller to 5 days and using self-serve ad platforms and Amazon is wholesaling with you and Web Search Engines collection and personalisation make the search Profit Cut and Sells B2B Services Sellers quitting Germany, Italy, Spain, the , Australia, Brazil, Japan, China, India process expansive and ecient. plus customers with Prime get to have get Amazon to police 3rd party sales. Brands with agile automation can outspend selling your products…Having the 1P model Three Pillars Amazon Prime and . They provide the entry point to not only Amazon’s oerings INVESTING IN Comparison Shopping Websites Data for Own Retail Business two-day shipping. need to leverage: Unilever x100 at the bottom of the funnel. Amazon’s Seller Forums are a monument helps you establish the new protocol in how Bezos said that Amazon rests on three Oers membership eCommerce including but those of +5m Marketplace sellers. Social Networks & Web Portals “Policing” Power Over Brands Access & Partners to frustration: the top two posts are “Bye you do business on Amazon, how your brand Everyone!” and “I’m leaving too.” The vast shows up.” pillars, of the new pillars in development free one day delivery bundled with exclusive Prime Video Food & Grocery Stable customer needs eCommerce Service Providers THAT Long-term, Detail Thinking he says to “ask him in 10 years”. digital media products. “We want Prime to GENERATES majority of the conversation is about USING “What’s not going to change in the next 10 Seller’s Annual Revenue be such a good value, you’d be irresponsible Beauty & Health Advertising MOMENTUM Digital Content Customer Obsession challenges with the relationship between Amazon Prime years?...you can build a business around the things Enablement Ecosystem Bangladesh click farms not to be a member” Appstore for Android Toys, Kids & Baby Customer Service Providers Media creation and $10m+ $6-10m Distinctive Emotional Propositions Amazon and its third party sellers. Segmented Commerce

Amazon Marketplace that are stable in time...when you know something HARNESSED BY distribution competition A network of third party service has grown $2-6m for product popularity Levi’s drives sales by understanding the Echo & Alexa Clothing, Shoes & Jewelry is true, even over the long term, you can aord to Payment Processing Higher fees = Lower Profitability Apple up to support and profit from sellers. Sellers trick Amazon to boost sales. It’s a “consumer segment who is getting more Fire Tablets Handmade put a lot of energy into it.” Fulfillment & Logistics Services $1-2m Can’t Personalise Marketing ?? Alexa ?? Selection Netflix Advertising & Ranking Services simple scam: somewhere in Bangladesh comfortable” buying clothes via Amazon. But IT Services or Products Can’t Customise Marketing the denim specialist has protected its Fire TV Sports & Outdoors Low Prices Gaining more shoppers means maintaining the Product Content & Photography $500k-$1m Retail arbitrage people spend countless hours clicking on ?? Finance ?? Sky pre-defined, specific links on Amazon. The premium status through being selective Kindle E-readers & Books Automotive & Industrial Fast Delivery On-site or Cloud-based Infrastructure volume of core goods (top 20% of sellers) directly <$250k Stores not only have to compete with Amazon but Amazon Directly Competitive ?? Health ?? A third-party seller platform supported by Disney Reimbursements & Feedback about which products it makes available on and the variety of the long-tail goods (other 80%) also sellers who buy goods in-store, often on deal, business model is simple: they are being A Broken Relationship Amazon’s logistics infrastructure Books & Home Services Vast Selection Consumer electronics the eCommerce site. mainly via third parties (who take the risks Amazon Pricing APIs & Product Research $250k-$500k paid to create a false sense of popularity. Movies, Music & Games Credit & Payment Products Telecommunications and then sell it on Amazon for a profit. Fear of can learn from). More shoppers = More Sellers = Brand Policing & Seller Suspension Amazon prevents stores like Toys R Us (RIP) from Amazon’s algorithm then kicks in and ranks Electronics, Computers & Oce AmazonFresh More shoppers. competing with their own inventory. these products higher. ILLUSTRATED Home, Garden, Pets & Tools Amazon Restaurants LEVERAGING WITH Amazon Web Services ADDRESSED Market leading on-demand cloud BY A Napkin Sketch computing platforms to individuals, TURNS THE It’s a closed loop that uses free cash flow to companies and governments, on a paid LOOP FEEDBACK POSITIVE FLY WHEEL Data Feedback Loop LOCKING IN WITH WITH A FUTURE MOATS? DEVELOPING PRESSURE TO reinvest back into the established business subscription basis. Driven by the API Amazon owns the richest dataset on how Entertainment & Media Shifting Sales Prime Video and cross Wider Content Moat Gaming & eSports YouTube Envy plan of providing low cost leadership. externalisation strategy pushing internal consumers consume, sellers sell and developers Competitive Factors Not only distributing media content but Media was one of Amazon’s first core subsidisation flywheel It is not only and Prime Amazon bought for $970 million. It Amazon has been pursuing exclusive Amazon designed its core value proposition services to the edge of the organisation The Acquisition Store develop. This enables Amazon to optimise the producing it, giving Prime members and competencies and while the market has Video that provide a competitive moat for remains the leading live streaming video livestreaming deals with dozens of popular Amazon believes the main competitive factors Price “Amazon Studios is making original content for around keeping customers happy by for 15 years. Amazon has +100 business entities across the world, many in eCommerce shopping experience, logistics network, pricing Media subscribers high-quality exclusives. flocked to streaming it still represents a the Amazon business, increasing ecosystem service for video games. As of May 2018, it media companies and personalities, many in its market segments and the levers it can Lowering prices while improving customer service Prime Video…from a business point of view for constantly oering more selection, better and media aiates. Many are the result of acquisitions and focus on proposition and products it stocks using “A shrinking 20% of Amazon sales. Audible reach and audience lock in. now has 2.2 million broadcasters monthly with large followings on YouTube. Twitch is Struggles in China apply include: has been central to Amazon’s business model since Film & TV us, we get to monetize this content in an convenience, & lower prices. specific categories. It spent $103m on acquisitions in 2017 but $13.7bn on Culture of Metrics” that aspires to measure was the first streaming step and the format and 15 million daily active users. oering minimum guarantees of as much The Chinese eComerce posted a 61% the start. It is THE low price retailer online for many unusual way. Winning a Golden Globe helps us Amazon Studios Whole Foods & $750m on Souq.com in 2018 with $2bn in the first six “customer ecstasy”. Selection Personalized services Music has become the fastest-growing format for as a few million dollars a year, as well as a CAGR over 2011-2016, increasing sales people using price matching algorithms and tax sell more shoes and it does that in a very direct Music Unlimited eSports Sports Tournaments months of 2018 (inc. PillPack and ) Video Games publishing. Now the major focus is Prime share of future advertising sales and by $333bn. This is driven by Alibaba and Price Accessibility benefits to pass saving on to consumers. Even its way.... We’ve monitored that Prime Video Personal Streams Monetise eyeballs own electronic devices are sold virtually at cost to act Video which began in 2006 as subscription revenue. Two of the JD.com. Amazon’s declining 1% share has Global Retailing Whole Foods Gamesparks Availability Customer service Books customers renew [Prime] at higher rates, and Amazon, saw ad sales in 1 Q 2018 exceed $2 USERS as another storefront to the Amazon ecosystem. Unbox in the . Twitch Gaming-related Talk Shows fastest-growing genres on Twitch are been reflected by opening its own store Internet sales have traditionally been Convenience Reliability they convert from free trials at higher rates.” billion mostly by selling “sponsored on Alibaba’s Tmall in 2015. The growth of and Western CONTRIBUTE livestreams of TV shows and “IRL” videos. FACING Cloud9 IDE Information Speed of fulfillment, products” slots during product searches. But JD and its partnership with and focused but now 6 of the top 10 DATA it is becoming a credible contender in online Walmat is a particular threat. companies are Asia Pacific based. Souq.com Harvest.ai Discovery Ease of use Higher Value Content advertising to Google and Facebook. A Questions & Pressures CROSS Audible Music Streaming Wars Can the famously customer-obsessed Amazon 23.9% PillPack Brand recognition Ability to adapt SUBSIDISING Amazon is competing with Netflix, Hulu etc target of $1 billion in ad sales has been set Alibaba Group 13.8% to produce great content but it is increasingly Research firm MIDiA says Music Unlimited is for Twitch alone where a ‘Buy’ button already Amazon successfully transition to a Ring Do.com Product Pages SEO ≠ Endless Aisle the third largest music streaming service conglomerate with stakes in vastly divergent JD.com 6.4% more of a threat to companies like Sky. It has appears on broadcasts of computer games Winning India? Twitch Blink PRODUCT In-page content is based around If similar product content is uploaded to added OTT distribution of Channels like Estimated Content Budgets after and , with around from 20 companies. business models? Some of its newest Amazon is reportedly upping its MORE PEOPLE accurate, standardised information and Marketplace as well as a seller’s own eBay Inc 5.5% Kiva Systems ComiXology VALUE Discovery or and won sports deals Netflix Amazon 16 million subscribers. Echo and Alexa, are Other oerings are in the space of business-to- GETS Content Hulu HBO investment in India by $2 billion having Apple Inc 2.8% LoveFilm IMDb USE SERVICE + attractive pictures. Early innovations in site then the Amazon pages will rank despite its US Open streaming coverage bringing people into premium streaming that 28% business where it can compete with its previously committed $5 billion. Any extra SMARTER CONVENIENCE Content is king and serves to attract eyeballs and this area such as Look Inside for books higher in Google. While 55% of had never used it before, 63% of UK and US being poorly received. Electricals customers – conflicts already playing out in capital would help stave o a threat from Wal-Mart Stores 2.3% Audible = keep them on the page. A/B Testing ensures the best have been overtaken by other reatilers successful product searches start on $6bn $4.5bn $2.5bn $2bn owners are using them for music selection Books, Music US Open 50% the Marketplace Seller community. Walmart, which took a majority stake in Rakuten Inc Quidsi Tenmarks.com POWERING TRUST product information converts to the maximum but Amazon still defines the standard. Amazon this can be a significant margin and streaming ahead of the 32% who use downloads 3% Employment Ethics Indian e-commerce giant Flipkart. The Suning Commerce 1.0% number of sales for physical goods while increasing Brand Stores issue. Investment in additional content, Next Generation ATP Finals them for weather and news updates. Approx Books, Music sales of digital content makes revenue and long-term Hard copy 3% Amazon UK Regulation Constraints company has set up a credit operation for Vipshop Holdings 0.9% A+ Content Pages adjustment and optimisation is vital for NFL & AFL Games 30% of time is spent listening to radio on Indians without bank accounts, and built a The New Own Brand Wars Prime members. brands to compete against themselves. Echo versus 70% on other smart speakers. DIY 4% estimated sales by product Clothing 20 live Premier League Matches 9% Taxation Expectations streamlined mobile app so it doesn’t crash Flipkart 0.7% In 2017 pulled the trigger on its private-label Beauty 1% Food 2% Anti-competitive Practices cheaper phones. business adding 41 brands across apparel, shoes, Expectations Proposition Queens Club and Eastbourne accessories, grocery, household and pharma up Consumers have begun to expect more for less THAT Local Store/Business Crushing BUILDS Counterfit Goods from 12 in 2016. It’s estimated this drove $470m in with fixed-price subscription models that unlock sales. By 2018 the number of own brands was +70. access to a large catalogue of curated content. Illegal/Unethical Goods Sales Key features trusted by customers: The Infrastructure Store 65 Clothing, Shoes & Jewelry Brands INCLUDING IN A digital ecosystem MOVING Voice & visual discovery Dash for home, DRS for Hosting Issues Customer Reviews THE REAL WORLD VIA WHILE BUILDING TO PROVIDING POWERED BY ALSO FOUND IN BUT Amazon's cloud is big enough to be the fifth-largest AmazonBasics with +1,000 Products Trac Store Concepts shoppers can’t live without beyond QWERTY Daily Assistance Alexa Abilities devices, Alexa for cars Mixed results? Fulfilment Sta Astroturfing business software company in the world. Amazon Web Wish ists 6 Grocery Brands Amazon does not just rely upon the web, Physical ways to recreate the value As a maker of hardware Amazon is Lab126, Amazon’s secretive R&D lab is Amazon’s most important invention since Echo with Alexa comes with baked in Dash buttons and the Dash Scanning Dash Buttons were seen as an “April Fool” Services exceeded $17 billion in revenue in 2017 with 2nd HQ Competition ne-Click Shopping search and aiates to drive trac. Innovation proposition of Amazon in the real world. unique in that it does not aim to make a behind recent consumer tech hits. Its the Kindle was the Echo, powered by the functionality that places it ahead of many Device enable Prime members to press when launched in 2015 but now account for AWS the leading provider of cloud infrastructure 3 Home & Kitchen Brands From its inception as a Personalised Recommendations in IoT devices like Dash or Echo or even its These include , a store which large profit but further its goal of being current focus is around the use of voice, virtual assistant Alexa. These set down competitiors in the voice and AI space. a button to refill 300 brands or speak to 5,760 orders each day. They have been a technology, chased by Microsoft, Google, IBM and SAP. Multiple Shipping Options original Kindle eReaders show Amazon’s requires no checkout and delivers a “magical” the world’s largest retailer. visual sensors and machine learning to the framework for an IoT future. Alexa embraces open-source to use order items from AmazonFresh. Dash tool to get users to think dierently about Computing willingness to experiment with new ways to experience with “Just Walk Out” shopping. Live & Virtual Assistance get people to products faster and easier. Mayday (Live, Human Screenshare) network eects to make it THE Replacement Service is incorporated commerce. 20-50m Alexa devices have Unlimited 2-day Shipping home-hub. Already there are 30k skills. been sold but internal numbers suggest only Storage reach customers. These digital channels are Book Stores Top Quality Service Kindle (2007) X-Ray directly into manufacturers esp. White -based CAUSING Video and Music Streaming now complemented by physical ones such as Goods to enable devices to re-order 2% of Alexa users have made a purchase internet Databasing Kindle Fire Tablet (2011) Buy Items Photo Storage Book Stores, Amazon Go and Whole Foods. Sold at Margin Alexa + Echo automatically. Alexa is also integrated by with their voice and of people who have Migration Pop-up Stores Fire TV Digital Media Player (2014) Set Reminders 12 of the largest carmakers. Starbucks bought 90% have not done so again. But eBook Borrowing Alexa + Dot Networking & Content Delivery Seller Strife Amazon Go (2014) Alexa + Tap Play Music and Ford used this to enable “Alexa, ask 20% have engaged with shopping through Starbucks to start my order.” asking about deals or checking the status of bookstore with doors for Developer Tools Amazon can take advantage of higher profit margins Echo and beyond (2015) Alexa + Echo Show Order a Cab because it does not need to spend on advertising, Provide Information orders. Other sources claim as many as 5th Management Tools marketing or brand development, but it is not just of Alexa users have made a purchase. Media Services competing with traditional brands. It is also Control Lighting & Temp desks, to its modern day Security, Identity & Compliance competing with the sellers on Marketplace who now From the use of big data to guide fast Analytics shift more than half of Amazon’s units sold and contribute over $135bn globally (est. $259bn 2020) Machine Learning incarnation as a disruptive Mobile Services product management to relying on The way we buy has changed with how fast our fingertips can press the AR & VR Application Integration force across eCommerce, Customer Engagement APIs to govern real-time pricing that Business Productivity checkout button. People can shop on their phones in bed at night and Desktop & App Streaming logisitics, consumer tech, Internet of Things ensures your brand wins the “Buy Game Development A time of incredible technology have their purchases delivered the next day. Technology advancements cloud computing as well as and data has enabled us to gain Now” box, the Amazon approach has have created a “now economy.” Today’s consumers are digitally savvier, media and entertainment, much deeper insights into how transformed the modern marketing less patient, and have near infinite options available to them, all to meet

has become a yardstick by strategies are stacking up and and what is expected of marketers, that are increasing exponentially. That next day delivery now seems slow which all companies are aligning with business goals, but suppliers and agencies. Discovery is when you can get your Whole Foods groceries delivered free in 2 hours. measured. With its new it's also increased the stakes and being disrupted and ‘Fulfilled by “I’m skeptical of any mission that has emphasis on bricks-and- competition marketers face. Amazon’ distribution has introduced Influencer Program Vine Associates Spark Application-based program for quali ed Invite-only program for “trusted” Free-to-join aiate program for Community for quali ed Prime advertisers at its centerpiece.”Bezos social media inuencers to recommend reviewers to post opinions about new members to advertise products to members and inuencers to discover, products. and pre-release items. their audience share and shop ideas from people “Our strategy is to make the customer experience additive by the ad process. We want our mortar retail, AI, finance new competitors, while your own with similar interests. customers to be able to see new brands and have an easier time discovering products that they’re looking for...For brands, we think the value proposition is that we can find ways for them, Amazon Trading Speed of Now especially emerging brands, to reach new customers. We’re working with advertisers of all types Convenience for Price and health, Amazon’s A 1 second delay in eCommerce transactions marketing stack may be on AWS or and sizes to help them reach our customer base and the goal of driving brand awareness, reduces customer satisfaction by 16% and Amazon warehouse locations were picked to discovery and better purchase decisions by the customer.” Amazon CFO Brian Olsavsky Walmart found 2% increase in ROI for every select the most favourable tax centres. To one second their speed improved. head o legal & ethical repercussions it has VISIBILITY & threat only increases. Technology performance has a significant CONVERSION MOVING THE traded those locations for ones that give more making use of a Lambda function. BY SHOWING MARKET FROM impact on experience and success. BOOSTS FROM ecient and expansive delivery options. Now Attribution Advantage Duopoly to Triopoly Rapidly Rising Revenue 77.6m Americans live in ZIP codes with Free- Amazon is testing its Amazon Attribution tool, Amazon Advertising generated $1.7bn in In Amazon’s first-quarter 2018 filing “other” Same-Day Delivery. Centres “employ” Search Optimisation which lets advertisers compare whether ads revenue compared with Google's $35bn and revenue — which it said “primarily includes technological progress made possible by the OR HAVE Procure Locally Consolidation Centers Impressions Clicks / CTR Adds to List Purchase Rate Subscribe & Save AMAZON SUCCESS A9 is the name of the algorithm Amazon uses for product on its sites are more eective than those on Facebook's $17.4bn. It is comparatively small sales of advertising services” — grew 132% company’s Kiva acquisition in 2012. Customer Reviews VISIBILITY & search. Brands need to optimise for Visibility, Relevance its rivals. This move will encourage brands to but Amazon has a strategic advantage at “the year on year to reach $2 billion. In the fourth Procurement will have to adjust the way Transportation carriers are likely to see +100,000 Robots Unique reach Search Impression Rank Add to Cart Brand Halo conversions Brand Halo Conversions METRICS ACROSS RELEVANCE and Conversions to rank on the rst page or win the drive more ads to Amazon because they will bottom of the funnel”. quarter of 2017, the ad business grew to about materials are purchased. To respond smaller, but more frequent shipments and Customer Service as Average Ratings BOOSTS FROM important Buy Box. Conversions are vital, A9 is a keyword State-of-the-art Vision Systems Video views Detail Page Views Purchase Assists ROAS Repeat Purchase Rate CUSTOMER JOURNEY see product detail pages convert compared to $1.7 billion, up about 60%. quickly to manufacturing needs, purchase demands for faster deliveries. This, in turn, WITH based algorithm but a product with a strong sales history their own site. Trailers onloaded in 30mins orders will become “blanket orders” with will cause a need for more consolidation Intelligent Assistants Competitive Advantage will rank higher in Amazon’s search results. LOOKING TO Graphical & Audio Sta Systems fast requisition release capability. This may centers in foreign locations to load Intelligent assistants are curently more Human interaction remains critical in providing Keyword Research boost the local sourcing trend. containers and get them moving fast. prevalent in discovery- and search-related services, Mayday, now available just as Sta Monitoring experiences. But they can enable advanced screenshare, proved that remote experts can Optimise Product Listing Dicult Middle New Targets & Customers interactions like processing payments, be integrated into high- priority customer New Customer Discovery Shoppers In-Market Targeting Similarities Product Keyword Conquesting Product/Brand Targeted Keywords CUSTOMER JOURNEY Use Seller Central Backend Search Terms Amazon increasingly works directly with many Amazon’s culture of “unreasonably high MANUFACTURING & TO DEAL WITH obtaining real-time support, or mining data journeys allowing Amazon to optimise service brands for deeper dives on retail analytics, standards” is coming to Ad Sales with even LED BY LOGISTICS FIRMS Acquisition (AAP (AAP + AMG Display) (AAP + AMG Display) Retargeting (AAP) (AMS) Retargeting (AAP) (AMS) ENABLED BY AMAZON Improve CTR & Conversion Rate data like why things may be out of stock and Twitch CEO Emmett Shear setting a target of EXPLORING Yard Management Smaller Lots to respond to complex queries. journeys based on observed results. To keep fast-moving inventory in stock at Manufacturers must produce in smaller lots + AMG Display) SEARCH PRODUCTS Explore A+ Content & Influencer Content how to price products and oers. But Amazon $1 billion in ad sales for Twitch, that’s more is “neither a pure-play competitor nor a than double its current sales. To do this Supply Chain Arms Race the distribution center, more frequent with very fast machine change-overs to Boost Sales with Amazon PPC deliveries must be scheduled and that accommodate a faster demand schedule. Dynamic Pricing pure-play ad platform. It’s in the middle.” Amazon needs to balance dierent customers. Getting that box to a customer’s doorstep is means yard congestion and perhaps a Resellers must build larger warehouses or Broader Keyword Brands far more complex than it was five years ago, need for yard management software with fill orders more quickly and respond to Grow Customer Base Reach Shoppers Targeting (AMS) Convert Potential Customers Reengage Shoppers with Retargeting SEEING MORE and that complexity is growing at a more UNDERPINNED 1st Party Sellers delivery scheduling. vendor-managed inventory (VMI). Build brand awareness & new Convert shoppers into customers Target broader keywords through Capture customers who visited your BY VITAL rapid pace. 3rd Party Sellers Blending Physical & Digital customers with lifestyle and by targeting shoppers to the AMS and ASIN retargeting to detail pages and did not convert. Frenemey Spend In an age of expanding digital commerce, other targeting. category and similar categories. convert potential customers. Headline Search (AMS), Eligibility Issues WPP, Publicis and Omnicom are looking to Agencies successful retailers blur online & physical Eligibility issues apply to all ad types on Amazon, so spend more than $800m on Amazon CAUSING A BUT stores to deliver an omnichannel experience Sponsored Brands being aware of them is critical when building and Advertising in 2018. But as with Google & FB that influences & serves the consumer, Now called Sponsored Brands, Headline Search is a managing your ad campaigns. To run Headline Search the real value to Amazon will be from millions PRESSURE Design a Better COMPANIES independent of channel. keyword targeted banner ad that appear in a banner activity you needs to display up to three eligible of smaller self-serve customers. Demand Meets Complexity TO LOOKING AT sized placement right at the top of the search results on products within the ad unit. If Amazon deems any one The Age of Amazon research has found that almost Fulfilment Expectations Customer Experience Amazon. These banners can be targeted against the best Omnichannel Obsession of those products to be ineligible then your campaign two-thirds (63%) of companies advertising on Amazon performing keywords selected by Amazon’s Machine Customer expectations of multiple, quick, Consumers are now shopping across many Experiences straddle the gap between will be paused. Ineligibility can include out of stocks are planning to increase their budget over the next 12 Learning “Auto” settings but then optimised manually. convenient and often free fulfilment options dierent platforms, retailers will need to be products and promises. This gap gets ever but also low pro tability. Have backup Amazon months, vs 54% for Google, 53% for Facebook. However, are on the rise. vigilant to remain consistent in their branding wider due to the rise of the ‘Unreasonable Standard Identi cation Number (ASINs) that can be the research has also found that only 15% of marketers Traditional Brick Smart Bricks displayed in ads in case one of your rst choice and marketing eorts, as well as the Consumer’, who cannot understand why all agree they are using Amazon Marketing Services (AMS) Hourly Delivery products becomes ineligible. application of their logistics. The ultimate aim companies she deals with can’t be as simple And Mortar Digital Commerce & Mortar to its full potential, while only 17% say they have a fully Buy Online, Ship to Store KEY FORMAT de ned AMS strategy. is to provide and consistent to use as Amazon, and due to the increased 89.8% of Retail sales 10.2% of Retail Sales Smart brick-and-mortar stores will Same Day Delivery shopping experiences at any time, anywhere, aversion to digital advertising. Trials & Demo Price/information activate rich experiences to Buy Online, Ship From Store complement the strengths of their ACRONYM Instant Gratification Transparency online channels (price comparison, OVERDOSE Buy Online, Pick Up In-store CUSTOMER DRIVING Personalized product reviews, etc.) as well as oer PASSIVE NEED WANT FIND BUY GET RETAIN RE-ENGAGE MARKETING’S Community & Reviews unique in-store experiences that cannot JOURNEY Amazon Advertising Amazon Marketing be oered by online channels (such as Pre-category Triggers & In-category & Product Purchase & Fulfiment Repurchase Recover Inactives trials and demos and in-store pickup). PHASES Campaign Landing Pages Platform (AAP) Services (AMS) Amazon Media Group (AMG) Potential Customers Awareness Brand Consideration Orientation Confirm & Usage & Evangelise & Lapsed Showcase your products or oers with cross-platform FORMATS AAP is a programmatic solution, or Amazon’s DSP. AAP is AMS is a self-serve pay-per-click performance marketing A team not a product. AMG sells Amazon’s ad products 5Cs of Service Convenience Service Evaluation Hyper-personalisation landing pages on Amazon’s website & mobile apps. AVAILABLE the only way advertisers can reach Amazon’s audience suite that oers three search ad formats — sponsored and works closely with agencies and brands to help them Templated Landing Pages segments o of Amazon owned-and-operated products, headline search ads and product display ads — better use those ad formats, including direct display, Consumer’s time and eort perceptions that How a customer judges the Customers no longer want cookie-cutter properties. It is accessed via an AMS login. as well as Amazon Stores. video ads and custom ad units, across Amazon encourage action. Tailored Landing Pages performance and outcomes of a products and experiences. Use data and Desktop & Mobile Web Display Ads Sponsored Products owned-and-operated properties like Amazon.com, IMDb, Attributions of transaction/interaction insights to deliver personalized customer Custom Landing Pages Digital Photography Review and Kindle. Decision Convenience Mobile App Banner Ads Headline Search Ads Access Convenience Firm Controllability Satisfaction interactions. Incorporate customer responses in future experiences, often in real time. Mobile Interstitial Ads Product Display Ads Transaction Convenience To what extent is the experience and any Service Quality unsatisfying elements seen to be under a Individualized Services In-stream Video Ads Amazon Stores A9 Ad Network (AMG) Benefit Convenience Fairness Non-Standard Media company’s control? Highly influenced by Proactive experiences Unique Amazon ad units that are closely integrated Also has the broader A9 ad network that goes out and Post-Benefit Convenience competitor set and especially Amazon. Real-time adjustments with the shopping experience. header bids against companies like Google for the top Finance & Fintech comScore 1,000-plus site inventory. Dierent to AAP. CUSTOMER JOURNEYS Expert Insight Amazon Video Ads Amazon has aggressively invested ARE GOVERNED BY Moving beyond functional Billboard Below The Fold in payments infrastructure and Home Reassurance product descriptions with CONSOLIDATING AS services over the last few years. Through new Home Services, Daily Deals Site third-party and original content. Social Proof + Charity Amazon Cash customers can book +700 services Marquee Ads Beyond Omnichannel Amazon then Google Wirecutter linked to purchased products, from The goal of Spark isn’t to connect you with Seasonal Events Amazon Advertising Individual Customer Changing Role of Oer Listings Stripe Amazon is working on a consolidated platform that will fold Increasing Bricks and Mortar to connect Amazon customers (75%) start their Luxury Editorial Amazon Allowance installing a new toilet to removing people you know. It’s to expose you to , Cyber Monday and Prime Video + TV + Cable all campaign reporting and advertising products into one Service Characteristics Firm-related Factors Dierences Resist proxies Customer Journeys more frequently & visibily – bookstores, shopping journey with the Amazon Greenlight Financial spyware. They oer vetting, speed & new, relevant products that Amazon thinks Day are enormously popular shopping Seller Central Ads Prime Video places Amazon into homes and place. AAP becomes Amazon DSP. Beyond solving confusion The aspects that contribute to convenience. “Market research and customer surveys can Consumer Journeys are not linear, despite Kohl’s integration, Whole Foods, Pickup search box, and nearly half (44%) transparency in booking, which takes you may purchase. Coupled with Amazon events. On Prime Day 2018 Amazon sold Video in Search (Beta) The aspects that constrain a company’s ability The aspects that define a consumer’s leisure time outside of the transaction funnel. NOW Amazon Lending issues this will stop paid search programs on both sides of Consequentiality become proxies for customers...Good how they are often laid out. In a connected centers – they are creating high say they always check prices on EXPLORING 60s with costs finalized up front. Smile’s charitable donation scheme creates over 100m products and over 1m smart Amazon’s marketplaces competing to arti cially increase to deliver a convenient service. experience of a service. Fire TV enables more TVs to be “Smart” and Amazon SMB Lending inventors and designers deeply understand world they can also be more complex with consumer touch in more categories. Amazon before purchasing on strong social commerce incentives. home devices - despite technical issues. bids. A uni ed data set will help brands avoid this issue. Inseparability Service Environment Time Orientation windows to shop from. The 'Amazon Cable Mayday Screenshare their customer. They spend tremendous many more touch-points, or far simpler with another site. Shoppers will also Reviews Amazon Cards EMOTIONAL ROLE Amazon Mobile Shopping Supply Constraints Store,' oers Comcast products including TO MAKE USE Consumer Information Time Pressure energy developing that intuition. They study a single click from Need to Get. “often” or “always” check Amazon’s Alexa Order Tracking Internet service, Internet and TV bundles. THAT IS MOVING A product with just one review Checking & Insurance? Sports Rights Banner ad placements on Amazon’s Shopping Apps and OF AMAZON’S Labour Intensiveness Company Brand Empathy and understand many anecdotes rather than prices against a dierent brand or is 65% more likely to be MAKING ITS OWN the mobile version of Amazon.com. retailer site with a Google search. Amazon & Netflix are additive. To be a real Hedonic Value Service System Design Experience only the averages you’ll find on surveys. They purchased than a product that EXPANDING ROLE PRODUCTISED WITH POTENTIAL NEW PILLAR substitute for pay/traditional TV in the Rich Segmentation & Demographic live with the design....A remarkable customer DATA+BRAND+TECH has none. Amazon is finally mainstream you need sport & news. US experience starts with heart, intuition, The Starting Point cracking down on paid reviews. Flash Sales Fire Tablet with Behaviourial Shopper Funnel Data & Geographic curiosity, play, guts, taste. You won’t find any ON & OFF-SITE Open Rights & 300k streams for NFL Segments based on historical search, browsing Billions of observed shopping and media consumption Segments to reach a speci c audience type. CUSTOMER JOURNEYS = SERVICE CONVENIENCE Echo + Alexa Over half of UK online shoppers start On-site Pages Magic Unconstrained delivery Flash sales and lightning deals with time of it in a survey.” Wonderful (Digital) games are the first step. Special Oers and purchase history. patterns through all stages of the purchase funnel across Amazon’s voice assistant integrates into their journey on Amazon, and they Invisible, biometrics payments Free 2-day shipping is a staple, but and stock limited discounts entice non- Gender E-mail Campaigns Fire Tablets with Special Oers provide a unique ad hundreds of retail categories. Experiences homes and other manufacturer’s devices. Its consider brands less important than technology piloted within the Amazon is looking to move items even CULTURAL ROLE regulars or lapsed customers back into Lifestyle Location factors like price & free delivery which Making In-dynamic ads Amazon Go . experience customers and subsidise costs. Single Login Rather than merely reacting to the journeys precence is a strategic advantage moving faster. New shipping centres enable the Amazon habit via e-mail. In-Market Time of day Rising Quality Purpose vs JTBD Tension Personal Relevance Amazon from “just” dominating the sales are highly associated with Amazon. Comparisons free 2-hour delivery while high profile Security Same Audiences Consumers expect the best. They see right Brand actions and interactions with society Consumers are prioritising progress and that custoemrs themselves devise, marketers Custom Browser increasingly seek to manage journeys as they funnel to a role in lives and culture. Customers’ top reason for visiting EVEN drone experiments and 11 Prime Air Amazon strengthened its smart security Cross-Device Attribution through products and services that are rushed face unavoidable awareness. Brands are personal expression through the products, FROM REAL PEOPLE would any product. Amazon is to compare prices for Fleet planes show it does not want to oering with the purchase of Ring and TV as Storefront to market. Brands that deliver anything but judged based on the impact they leave with services, and brands they align with. Brands EXPLOITING Engage customers with brand through a featured banner EXTENDED BY MAKING IT items they intended to purchase be constrained by logistical limits on Blink. They oer additional consumer their best will die a rapid death. the environment, health and social issues. must create useful, useable, personalised & on the home screen of the Fire TV experience. Promote (51%). Only about one-third of the ground. lock-in but also temporary access to Despite this consumer behaviour often leans relevant experiences for consumers. Frictionless products or oers with simple to navigate pages, built for Amazon users come to the site Recommendations homes for easier logistics and delivery. towards brands “delivering on the Job to be Brand Value Making payments more cash Amazon Lockers TV. Simple decision tree interactions are possible, these Postive Positioning ready to buy. 35% of Amazon.com’s revenue “Pick up where can also be used on Amazon.com. They have achieved x3 Done for the right price”. In 2018, the brand value amounted to 207.6 ecient for Amazon and TRUST BUILDING “Our vision is to be earth's most is generated by its Amazon Logistics sell through rates. Advertiser Audiences Lookalike Audiences Remarketing billion USD, while the company's 2017 global Amazon Assistant frictionless for customers is a key you left o” recommendation engine. Custom segments created uniquely Segments to extend campaign reach. Segments to engage lost customers. customer-centric company; to build a priority. has evolved In Trunk Fire TV revenue stood at 177.87 billion USD. AWS Dash Amazon’s UX makes it easy to return to for an advertiser. place where people can come to find to include a and a Prime Now Fire TV Landing Pages Pixel-based Pixel-based Meaningful and discover anything they might want Amazon is selling AWS IoT Buttons, purchases or get back into your basket Pixel-based DRIVING AN DRIVING BEHAVIOUR payments network for online and customisable versions of its Amazon flow whether on or o site. Anonymized Customer Match Amazon First-Party Data Distinctive to buy online.” SUPPORTED BY DATA EXPECTATION brick-and-mortar merchants. Dash buttons. While Dash enables easy DMP Amazon First-Party Data ECONOMY Experience re-ordering, AWS versions extend Anonymized Customer Match NEW TECH & POWERS TECH TO TARGETING CAPABILITIES What Gets Bought Amazon’s role as home infrastructure. CULTURE MEANS LEADING TO CHANGING UNDERPINNED BY MAKING PAYMENTS MORE + FASTER WIN BACK LAPSED Changing expectations New Purchase Journeys New Kinds of Decisions BUILDING One Stop Shop OPTIONS & How it is Sold EFFORTLESS CUSTOMERS Customers take advantage of the Sets the UX Bar ENABLES UNIQUE ACTIVATIONS “One thing I love about customers is that they are divinely 55% of US consumers start online product People using voice are searching by Own-label’s online share is expected to REORDERING ALONG THE CUSTOMER JOURNEY “Floating all boats” platform for browsing products, Amazon’s design is criticised 1-Click Buying discontent. Their expectations are never static – they go searches on Amazon. Mobile earned 44% of catgegory more than brand and reach 25% by 2020 while automation & Amazon sets the pace for US ecommerce High Awareness deals, comparing prices and but 58% of consumers have left Amazon’s controversial patent Beyond Prime Data + CRM up. It’s human nature....People have a voracious appetite retailers’ online trac totaling 31% of sales non-branded terms in categories like beauty subscription threaten the $1trn annual accounting for +80% of growth in 2018 with a 96% of consumers in the UK and checking availability and delivery a retailer’s site for Amazon after expired in September 2017 but the Simplicity + Choice Prime is the key engine for customer 64.5% of US & UK internet users claim to for a better way, and yesterday’s ‘wow’ quickly becomes in 2016 and increasing year on year. & skin care are increasing 24% annually. global marketing spend. today’s ‘ordinary’. I see that cycle of improvement global share of 23.9% & 44% share in the US. Germany know of Amazon. Even in speed. Amazon is used for these having a poor site experience. method allows customers to make Multi-shopping options allow customers retention but Amazon’s tactics for “lock have shopped on Amazon in the last 3 Branding Strategy Programmatic Sampling Dynamic eCommerce Ads Amazon Brand Stores Remarketing happening at a faster rate than ever before....How do you +310m active customers in 2016. It has helped a weak market like the Netherlands purposes (82%) much more than >50% distinguish its site search online purchases without having to to create the experience most in” through adding value to the months. This enviably high number Optimising Creative and Media strategy to achieve Amazon’s Targeted Sampling Product enables These introduce Amazon features like Add to Cart and Brand Stores enable brands to create pages at Rengaging shoppers with a variety of remarketing stay ahead of ever-rising customer expectations?” build the category & consumer behaviour. it has awareness at 63%. Walmart (18%), eBay, Alibaba & Jet. & filtering as superior. use the shopping cart process. convenient & comfortable for them. customer experience are extensive. Amazon is maintained by data & CRM. brand awareness and engagement goals beyond targeting a precise audience with a free sample and Customer Reviews into display ad units. These can Amazon.com/brandname and own more of a branded tactics including shoppers who have visited your site. Direct Response and eCommerce Sales. following-up with automated remarketing that drives result in +23% lift in purchase rate vs. standard image experience, but they need consistent, strong use of AAP dynamically retargets when the segment visits Early Journey Activation conversion. A programmatic approach to sampling ads by leveraging the trust of third party endorsement Amazon search and media to ensure consumers nd third party sites with a tailored message. where a “banner ad can come through the front door” and integrating the ability to add to a basket for later. them and then for the Amazon algorithm to favour the Pixel-based Targeting Beyond Demographics with a 15% conversion to sale. products. Best used as campaign landing pages. Promoted Product Targeting Transaction Access Benefit Post-Benefit Premium Inventory CORE CUSTOMER Brand Halo Targeting Transforming customer journey expectations “We see our customers as invited guests Decision Convenience Convenience Convenience Convenience Convenience Private Marketplace Deals “We start with the customer and work backwards.” Bezos frames a successful Amazon Similar Product Retargeting to a party, and we are the hosts. It’s our JOURNEY PRINCIPLES Making it fast and easy to choose. Making it fast and Making it fast and easy Making it fast and easy Making it fast and easy Pre-bid Viewability Targeting customer journey goal as "providing the best information to give customers the right answer". easy to pay. to acquire. to enjoy/use. to re-purchase. Amazon's approach does not frame a product sale as the purpose of the customer journey. job every day to make every important aspect of the customer experience a GROWN BY Instead, Bezos realised that the success end-point for the customer could be a whole range of Higher Impact Creative Created by the Digitas Strategy Team things – perhaps a realisation that they did not need a certain item after all, or that they would little bit better.” Total Addressable Market Mental Availability Salience Physical Availability Experience Share more information, entertain and engage. Amazon & Marketing If you have any questions or feedback on how to improve this we would love to hear from you. WELCOME TO THE PARTY (JOURNEY) be better o buying from an Amazon marketplace vendor than from Amazon itself. The market you are serving, the extent of Being the brand people think of The quantity & quality (how fresh The breadth and depth of your The product of an interaction between an Video & Billboards Context Map [email protected] product-market-fit & potential to grow. first in your category (especially & relevant) of brand information distribution in time and space. organization and a customer over the TV Ads as Storefronts For sources, background and an explanation: among light buyers). in memory. duration of their relationship. Free Dive Video Ads? v1.1 05/09/18 https://medium.com/@djc1805/a-map-of-amazon-and-modern-marketing-372e1590b564