If you could create your own fantasy Board of Directors, who would be on it? CO— connects you with thought leaders from across the business spectrum and asks them to help solve your biggest business challenges. In this edition, a CO— reader asks about the optimum growth levers to pull on Amazon.
John Ghiorso, CEO of Orca Pacific, a marketing agency exclusively focused on Amazon, answers…
Amazon is fundamentally changing the way we all do business. And it’s no big secret. Consumers are increasingly expecting the convenience of an online shopping experience where any and all products can be purchased with a click and delivered within days. Businesses have seen this retail shift unfold and know that the changes are here to stay.
What’s far less obvious, however, is how businesses should be reacting to the changes. Even as capability evolves, distinguishing which levers to pull is not always clear-cut. In fact, I receive questions every day from businesses that are experiencing mounting pressure to respond meaningfully but are unsure about what’s worth their attention.
My usual response is that there is no silver bullet to success on the Amazon platform. I firmly believe that each business should carefully consider their needs and build a holistic strategy that fits. I do, however, like to point brands to a few widely applicable opportunities which present massive upside and happen to be largely underutilized: programmatic advertising with Amazon Demand Side Platform (DSP), Amazon Business,
and Amazon private label brands.
Consumer habits are transferring to the B2B marketplace, meaning the same shoppers are looking for a convenient online experience when buying products for their businesses.
Programmatic Advertising with Amazon DSP: Turning shopper data into sales
Amazon is more than a retailer; it’s also an advertising platform.
With more product searches now starting on Amazon rather than Google, advertisers are projected to spend over $11.5 billion on the platform in 2019, a growth of 53% from the previous year.
But meeting customers in the buying journey is only one perk of Amazon advertising. Another is the ability to retarget those customers when they decide not to purchase, something made possible by an underutilized program: Amazon DSP.
With Amazon DSP, brands can deliver customizable display ads, those with images and videos, to targeted customers across most leading websites and apps. By utilizing Amazon’s real-time data on purchase and search history, page views, demographics and more, brands have the opportunity to get in front of those who have shown the most intent on purchasing and re-engage them with products and/or promotions.
Not only can businesses make use of Amazon’s rich shopper data when targeting ads, they can also use it to track what happens after a DSP campaign has been launched. Businesses can know if targeted customers searched for their product, added it to cart, purchased it, or even purchased other products in their catalog.
[These] features [generate] 10-times the reach of traditional search ads.
Take our partner Reebok, for example. We ran a DSP campaign to put a promotional discount in front of an audience who was, at one time, considering the promoted products or searching for similar items on Amazon. The results ... garnered positive effects across their entire catalog that the promotional discount alone would not have offered.
Amazon Business: Monetizing the B2B marketplace
I often find myself being approached at industry events by brands that want to know what the next big thing at Amazon will be. They like to make their wild guesses and look to me for confirmation, to which I always shake my head, nope.
For over a year, I have considered Amazon Business, Amazon’s B2B marketplace, to be the best growth opportunity available for brands selling on Amazon, hands down. And yet, many businesses are shocked just to hear of its existence, [saying], “You mean there is a whole other platform?”
Not exactly. Amazon Business is the same marketplace we are all accustomed to, but with a separate entry and additional business-friendly features and products. It’s a space specifically for businesses to buy products, from office supplies to heavy duty equipment and industrial materials.
Features include discounts on bulk quantities, fast and reliable shipping, tools for managing accounts and tracking spending, and various payment options, including requests for quotes.
Though what makes Amazon Business so promising and widely applicable isn’t just the bells and whistles; it’s the reason behind its astronomical growth.
From 2016 to 2018, Amazon Business grew from $1 billion in sales to over $10 billion in sales. Consumer habits are transferring to the B2B marketplace, meaning the same shoppers are looking for a convenient online experience when buying products for their businesses.
And here’s the best part: You don’t need to be a traditional commercial supplier to have worthwhile success on Amazon Business. Many brands have some level of commercial applicability whether they know it or not. By investing in bulk discounts and intentional advertising, they can appeal to business customers and grow their sales on the business side of the Amazon platform. The key is making it happen while the first-mover advantages are still in place.
Getting involved while the competition is still relatively low means coming out ahead of the curve a couple of years down the road, when Amazon Business becomes the leader in B2B online sales.
That’s why we are working to introduce Amazon Business strategies to a number of our clients. We work with a leading manufacturer of first aid kits that was initially focusing on selling personal first aid kits on Amazon retail. However, they also had a line of kits that follows compliance standards for a number of workplaces that wasn’t being sold on Amazon. We put together a launch strategy to introduce these kits on Amazon Business and we’re now seeing new growth potential for them through B2B sales on Amazon.
Private label brands and ‘Amazon Exclusives’: A springboard for startups
Amazon’s private label program is all about playing to the strengths of your business. Those with strong manufacturing and product development capabilities can provide products to Amazon, which they bring to their consumer or business marketplace. Manufacturers focus on what they do best while Amazon does all of the heavy lifting involved with branding, inventory, and advertising.
Many retailers have their own private label brands. The difference with Amazon is that they have opened up their private label manufacturing as an opportunity to bring on board businesses looking to grow their impact on the platform. For some startups, the program even acts to bring a new innovative product to market quickly, skipping over the challenge of building brand awareness.
Amazon is constantly looking for new opportunities to team up with businesses from most categories.
For those businesses with strengths in branding, there are similar programs such as Amazon Exclusives, which leave brand ownership to the business but require a commitment to only sell on the Amazon platform. In return, brand exclusives receive access to the very best Amazon has to offer in advertising and data features. For many of our clients, this tradeoff has proved extremely profitable. And Amazon continues to sweeten the deal with an ever-improving toolbox for those involved in the program.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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