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Misconceptions About Amazon
Misconceptions About Amazon

Over the years, Amazon has evolved because of advancements in technology and trends in consumer behavior. It's now a destination to discover products, research and make a purchase. A person's perspective on how Amazon can and should be used usually varies based on their industry and level of expertise.

With that said, it's imperative decision-makers and marketers fully understand the marketplace and what it takes to succeed. My goal is to debunk some of the common misconceptions about present-day Amazon and provide brands considerations for when they're ready to revisit their strategies.

Amazon Is More Than A Transaction-Only Marketplace

Many still operate as if Amazon is still a transaction-only e-commerce site. Brands hyperfocused on return often use it only as a bottom-funnel sales channel. And, because of this, those brands can fall behind the competition. On the other hand, savvy brands invest across the ecosystem, including Amazon Advertising. With the appropriate knowledge and support, brands can leverage the power of Amazon's flywheel.

There are many features, opportunities, and insights available across the different facets of Amazon. This can make it difficult or overwhelming to know where to start and how to prioritize. But it's important for brands to identify how and when to adjust strategies as Amazon continues to grow and change. Depending on a brand's unique situation, it may prioritize optimizing product detail pages, invest in advertising or loop in proactive technical support. Remaining agile within each of these areas makes a difference in whether a brand can successfully sell on the channel.

Amazon's Data Is Invaluable

Part of what makes selling on Amazon so popular is the data available. But there are insights available beyond sales and transactional data. Amazon allows brands and advertisers to view attribution, trends in consumer behavior, new-to-brand sales and more. There is also the opportunity for brands to understand the off-Amazon impact of programmatic display campaigns.

So, gaining knowledge through data is key to improving customer experience and presence on the channel. Remember, it's a channel in which brands sell their products, but Amazon doesn't give direct access to customers. Amazon's data is the fuel brands need to meaningfully reform strategies.

Amazon's Reach Is Beyond The Channel

As I alluded to above, off-Amazon data is available to brands that know how to leverage tools, including mobile strategy, Amazon DSP and more. We work with clients to increase off-Amazon sales through media investments and holistic strategies. In doing so, we strongly recommend a cohesive advertising strategy using both search and programmatic advertising. This is because, on average, between 70% and 90% of Amazon DSP ads drive sales to channels other than Amazon.

Beyond advertising, brands can influence off-Amazon success by capitalizing on how Amazon is now used as a product research platform. It's not uncommon for someone purchasing through another online retailer or at a brick-and-mortar location to use Amazon to learn more or compare prices. In fact, Amazon is the first place half of Americans begin their product searches, compared to 34.6% who start on Google. To do this, ensure your entire Amazon presence is optimized, proactive and fully integrated into your overall business strategy.

Proper Measurement Requires Specialized Expertise 

My final thought to leave you with is that brands need to evolve how they measure success on Amazon. If it was still a transaction-only marketplace, measuring sales alone would be enough. But with Amazon's constant development, it requires a deeper dive across a number of measurements to understand performance and remain competitive.

Otherwise, a limited analysis in today's landscape can create tunnel-vision — and, as a result, an over-emphasis on metrics, such as Advertising Cost of Sales (ACoS) and ROI. Brands should also track its Best Seller Rank, Buy Box Percentage, traffic, margins and conversion rates. Amazon-specific measurements, such as Total Advertising Cost of Sales (TACoS) and new-to-brand metrics, should also be included in regular measurements.

Getting Started

  • Do Your Research. Spend the time to get to know your brand's competition on the channel. Research can include evaluating comparable products, pricing and key ad units. Doing so will position your brand to strategize in a meaningful way and (hopefully) surpass the competition.

  • Get to Know Your Audience. Take a look at historical product performance. Trends in this data can provide an idea of what is popular among your brand's shoppers. The products that consistently perform best are worth supporting with advertising.

  • Expand Your Success Measurements. Many brands that sell on Amazon and invest in advertising focus only on RoAS. Consider additional metrics such as new-to-brand, organic ranking, conversion rates, Buy Box percentage and margins. Insight into a variety of metrics can help paint a clearer picture of your brand's overall account health on Amazon.

  • Find a Strategic Partner. A strategic partnership can take your brand to new levels of success on Amazon. There is much to understand about the channel in order to make the best decisions for your business. A strong partner should serve as an extension of your brand's internal team and bring innovative recommendations to the table.

In short, Amazon is no longer limited to buying and selling and it can be a powerful tool. If brands do the research, gain knowledge and are surrounded by a strong team, success will be within reach. Make sure your brand is positioned to evolve with Amazon and tap into its data, tools, and resources.

This post was originally published via Forbes. If your brand could use the support of a strategic partner, schedule a free consultation. And as always, we’re here to answer any questions.


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