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Amazon’s Market Share: Why Brand Marketing Still Matters to Retailers

Amazon’s Market Share: Why Brand Marketing Still Matters to Retailers

Brands Still Matter

Photo credit: Jeramey Lende / Shutterstock.com

With Amazon credited with about a third of U.S. online retail sales and estimated to contribute .51 cents of every dollar in U.S. e-commerce growth, (source: Internet Retailer) the relevance of brand – apart from the mighty Amazon® brand – may seem to be eroding. However, considering Amazon’s huge market share, the differentiating value of brand is more important than ever.

To a small retailer, Amazon can be both a friend and a foe. Building a brand is one of the best strategies for concurrently competing with Amazon as a retailer and partnering with Amazon as a seller. A brand name separates a product from the pack and helps a product get found. According to a Forrester Research study, about one third of all online product searches in the U.S. start at Amazon. Brand names have the distinct advantage of showing up in search results, based on the search terms shoppers use.

What Does Brand Mean?

Brand is not just a catchy name or cool logo; it’s the association of good feelings with the name that makes shoppers choose a particular product or service. A common marketing adage is shoppers buy on emotion and justify a purchase with logic. We choose one brand over another because the product looks better, feels better, smells better, tastes better or promises to make us better. We choose a brand because of this personal connection formed by our own senses, a feeling of “it’s right for me.”

Brand is just as important for the shoppers who are less swayed by emotion and more influenced by price. To many shoppers, the Amazon brand is associated with reliable service, value and selection. Value-seeking shoppers don’t always buy the cheapest offerings on Amazon. Instead, they use emotions to sort through the products, looking at reseller ratings, brands they trust and product reviews at a site where they feel they belong. The feeling of brand as a shared community is especially true for the millions of Amazon Prime members who subscribe to brand loyalty with an annual fee.

How Do You Get People to Pay More For a Name?

As a marketing professional, I know brand building strategies. As a shopper, I fall for them every time. Recently, I stood in the grocery store condiments aisle, weighing the pros and cons of which bottle of Worcestershire sauce to buy. The Lea & Perrins® bottle caught my eye, as its iconic paper wrap reminded me of my mom. It’s the brand my mother always bought to make her delicious grilled hamburgers. This bottle costs 50% more than the other Worcestershire sauce brands, but emotion and brand beat budget.

Lea & Perrins sets a great example of effective brand building.

An example of brand building

The iconic Lea & Perrins® paper-wrapped bottle.

Perceived Value

The Lea & Perrins unique packaging adds perceived value and sends the right message of quality: this brand has put a lot of thought and care into their product. Plus, the product looks better than the other brands on the grocery store shelf (or Amazon search results), so it’s easy to assume it will taste better too.

Unique Story

“The Famous Paper Wrap” story is printed on the Lea & Perrins packaging, inviting the consumer to be part of the rich heritage of this brand, which dates back to 1837. This feeling of shared history strengthens brand loyalty. Not only is this the brand my mother used, but it’s also the brand my grandmother and generations before her used. I must continue the tradition.

Consistent Messaging

Lea & Perrins conveys the premium packaging = quality message on all their marketing channels, making good use of the clever tag line “Unwrap the Flavor.” The same messages of quality and tradition (plus the same recipe my mother used) are easy to find on the official Lea & Perrins website – as well as their brand page at Amazon.

Make a Name For Yourself

For a new business that hasn’t been around since 1837, the same principles apply:

  • Make your name synonymous with the value your products offer.
  • Tell a unique story to differentiate your product from the others.
  • Consistently reflect these values and narrative in every detail of your business – your customer service team, your packaging, your emails, your website and your social media channels.

Building a Brand on Amazon

It may seem counterintuitive for new or smaller businesses to gain brand awareness in Amazon’s massive marketplace, but with the right product ads, product listings and messaging, it can be a very lucrative way to grow a business.

With over 24 years of experience, Cajam Marketing can help you develop and nurture your brand. Our online marketplace specialists can guide you through selling and advertising on Amazon, Houzz, Jet and other digital marketplaces. Learn more.

Will Amazon Pay Per Click Ad Changes Affect Your eCommerce Holiday Plans?

Will Amazon Pay Per Click Ad Changes Affect Your eCommerce Holiday Plans?

Amazon Product Ad and Text Ad changes can affect your ad campaigns. For many diligent e-tailers who started preparing for the 2015 holiday shopping season before their 2014 holiday shipments left the warehouse, Amazon’s upcoming pay per click ad changes have derailed some planned holiday ad campaigns. Luckily, there’s still time for nimble, adaptable online businesses to switch gears and take advantage of new Amazon ad opportunities for the 2015 retail holiday season.

Amazon recently announced they are discontinuing Amazon Product Ads and Text Ads effective October 31, 2015. For many companies, Amazon Product Ads provide an opportunity to have visibility on Amazon without selling in the Amazon marketplace. The Amazon pay-per-click product ad displays a relevant product from the online retailer’s product feed to an Amazon shopper. When the shopper clicks on the ad, the shopper is taken to the merchant’s website to order. For some merchants, this is a significant source of revenue that will no longer be available.

Are You Prepared For Amazon Product Ad Changes?

Here are some questions for you to assess how this change will affect your bottom line and determine your next steps.

How Much Revenue Do Amazon Product Ads Drive For Your Site?

Many smaller retailers have had great success and increased revenue from Amazon Product Ads. Take a look at your revenue sources and determine the percentage of your sales attributed to Amazon Product Ads.

Can You Replace This Revenue With Other Amazon Advertising?

Amazon briefly had a text ad program in beta. These ads were going to replace some of the ads Google was providing on Amazon. After a very short testing period, Amazon announced the program will also be discontinued on October 31, 2015. At this time, ads from third party such as Google Adwords and Bing will continue to show.

If you are opted into Google search partners, your ads will automatically appear on Amazon when it wins the bid/relevance. Since Google does not provide insight into their partners, the only optimization you can do is opt in or out. For Bing, you can optimize based on the site. We recommend reviewing Bing’s search partners in the coming months to see how Amazon changes affect results.

Amazon Sponsored Ads

The Amazon Sponsored Ad program for merchants who sell on the Amazon marketplace will continue. These sponsored ads will have a stronger visibility when the product ads are discontinued. The pay per click sponsored ad takes a shopper to the Amazon marketplace listing rather than the merchant’s website. For online merchants who sell on Amazon, these ads help shoppers find your product, giving you the advantage over your competitors in the marketplace.

Are You Utilizing All Profitable Amazon Opportunities?

Your visibility on Amazon is an important point to consider. In a recent study, it was found that 39% of consumers start a search on Amazon, while only 11% start on Google. Questions to consider if you haven’t already:

  • Should you sell directly on Amazon?
  • Is it profitable to participate in sponsored ads to drive more volume on Amazon?
  • Have you planned for the decline of sales from Amazon product ads?
  • Are you opted into search partners for Google and Bing to have visibility on Amazon with text ads?
  • Have you looked at Bing’s performance on Amazon within their search partners?

Need help answering these questions? Cajam Marketing paid search specialists can help you sift through your sales data and come up with the most profitable plan for your holiday season and beyond.

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