Today in E-Commerce: Amazon Doesn’t Care About Your Famous Brand Name
No matter what a brand sells, one of the most significant differences between traditional brick-and-mortar and Amazon is the fundamentally different path by which success is attained.
For years, large brands ruled their category thanks simply to long-standing relationships with national retailers, who carefully controlled what they carried and how much of their shelves were devoted to a particular brand.
This handshake economy created an environment where large brands could rest relatively comfortably, provided they remained chummy with their major retail partners. For marketing purposes, the only competition they had to worry about was the handful of other big brands also fighting for shelf space.
Then came Amazon, which wholly reinvented how success would be determined for consumer brand organizations by removing the physical barrier of shelf space from the equation.
Unlimited shelf space essentially meant there was no longer a considerable entry point to a brand’s products being available and visible to a mass audience.
Suddenly, the world’s largest, most dominant brands were on roughly the same footing as those a fraction of their size.
This has proven to be a challenge for larger organizations, which generally didn't (and, in many cases, still do not) have the resources or skillset internally to succeed on the platform.
A Category Upended
This is perhaps no more obvious than with a product regularly consumed by 83 percent of adults in the United States: Coffee.
Overall, the $4.1 billion industry is dominated by a select few brands, led by Folgers, with roughly 30 percent market share of ground coffee sales, according to Statista.
Nearly 75 percent of the market is controlled for by nine brands: Folgers, Maxwell House, Starbucks, Dunkin’ Donuts, Peet’s, Gevalia, Community, Eight O’clock, and Seattle’s Best. Meanwhile, another 9 percent is accounted for by private labelers.
That’s not the story on Amazon, however, where the majority of these national brands hold very little real estate on search results pages and are forced out by small brands that have to succeed by understanding the Amazon marketplace and how success is attained there.
The biggest player in the Amazon coffee category is Death Wish Coffee, a brand started less than a decade ago by a former accountant.
As of May 2017, Death Wish accounted for four of the Top 12 listings on an organic Amazon search for “coffee.”
Another two listings are held by Koffee Kult, a small roaster located in South Florida.
Maxwell House Dunkin’ Donuts, Gevalia, Community, Eight O’clock, and Seattle’s Best – roughly a third of the market overall -- account for no listings in the Top 12 on Amazon.
The lessons to be learned from this example (as well as many others that can be found across an array of categories on Amazon) is clear.
For large, well-known brands, the example clearly shows the name recognition they have rested on for perhaps the better part of a century means very little in the new marketplace, and they have no choice but to accept the challenge of defending their territory in the category.
For small brands, it's precisely the opposite. The immense barrier to nationwide distribution that kept these companies from getting into the game for decades is now leveled. Their reach and success will be defined not by legacy and brand name, but by their ability to implement an intelligent and effective Amazon strategy.
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