Marketplace Strategy planted its flag in Anaheim last week at Expo West, one of the largest natural foods conferences in the world.
Amongst rows and rows of endless kombucha, jerky, cold-pressed coffee, and beef broth brands, we had our fair share of conversations with grocery and personal care companies, and came away with a few standout trends:
Amazon is no longer sneaking up on anyone. Even a year ago, it wasn’t too difficult to find long-standing, sometimes well-known grocery brands doing little to grow – or even monitor – their Amazon presence. These brands were still in ‘let it be and take whatever we happen to get’ mode online, and were doing little to maximize revenue or ensure their brand was well-represented on ecommerce’s biggest channel.
It wasn’t uncommon at that point to ask a brand about their presence on Amazon and get back what sounded more like a mumbling string of buzzwords than real answers as far as any semblance of a coherent strategy.
As we walked the (many) aisles of Expo West’s exhibitor floor, I don’t believe we spoke with a single brand – corporate giant or tiny start-up – that didn’t have a reasonably thorough response as far as their current and future approach to Amazon.com.
More simply, rather than just a source of some extra pocket revenue, Amazon is now a central piece of every grocery and personal care brand’s strategy.
Amazon continues to be the bread & butter of smaller brands. Long the attraction of Amazon for smaller consumer brands has been its ability to erase the long-standing entry and growth barrier of shelf space in the retail world.
For years now, we’ve seen brands – many of whom had never graced a brick-and-mortar shelf -- take off and turn into category leaders on Amazon, fueled by intelligent minds who recognized Amazon’s greater likeness to a marketing platform vs. a traditional retailer.
Amazon has been a boon for brands that have struggled to carve out space in physical stores, as well as those that initially targeted e-commerce as a foundational sales channel.
While larger brands have caught up substantially and are beginning to allocate more of their robust resources towards implementing Amazon-specific strategies, the little guys are still doing their thing and finding success.
Approach a larger organization at Expo West and, while it was almost certain they’d thought extensively about Amazon, many have yet to implement a strong, consistent strategy across their catalog. Others are still navigating through internal bureaucracy to determine who will be responsible for its success.
Speak to smaller brands, however, and across the board we found organizations with a solid understanding of the channel and what drives success. In turn, you see many of these brands experiencing exceptional growth and sales simply through their efforts on Amazon.
More than ever, these brands rely on Amazon as not only their most reliable early stream of revenue, but also as a forum for the proof of concept of their brand and products.
Who’s in charge still varies widely. While the consensus among consumer brands at this point seems to be that Amazon is undoubtedly important, what remains a question -- with an array of answers -- is which area(s) of an organization ought to be in charge of leading and implementing the channel’s strategy and day-to-day operations.
From our interactions, it very much seemed there is still no consistent title or department handling Amazon for brands. In fact, it still ranges pretty consistently between sales, marketing, and e-commerce (for those with dedicated e-commerce departments.)
At its core, Amazon is simply another retailer, which has led to it often being placed initially into the hands of a sales representative, experienced with retailer relationships. And, particularly for Amazon vendors, there still are facets of relationships with buyers and category managers that are best managed by sales.
However, it doesn’t take long to realize that success on Amazon is fueled most dominantly by successful marketing on the channel, mandating a skillset largely alien to typical traditional account manager.
Adding yet another complication are the frequent operational decisions that figure heavily into Amazon strategy and profitability, mandating expertise well outside of most sales or marketing skillsets.
Even for organizations with a defined e-commerce department, there are frequent moments necessitating expertise from other areas of the business.
While the ultimate ownership of the Amazon relationship will continue to be debated and defined at the company level, what’s clear is that Amazon and other e-commerce channels are increasingly demanding a collaborative environment between sales, marketing, and operations.
