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Amazon

eCommerce Decision Makers to Invest in Technology and Talent

30 Jun 2021

Amazon Remains A Vital But Increasingly Complex Channel For Brands

Censuswide surveyed 251 ecommerce decision makers – specifically Chief Marketing Officers, Brand Managers and Digital Transformation Managers – their feedback highlights how important it is to partner with a channel expert.

Amazon Dominance

Of those polled, 86% stated that Amazon is crucial to their sales strategy and 75% believe that ambitious brands must have a presence on Amazon in order to engage with customers via their platform of choice.

Competition Intensifies

Online retail accelerated to account for over 35% of total retail, with Amazon being forefront. Reportedly, thousands of new Amazon Seller accounts are register each week globally. Competition for consumer attention and share of spend has increased as more brands adopt an Amazon channel sales strategy.

76% of respondents agree that simply being on Amazon is no longer enough. Instead, brands need the right Amazon strategy to drive growth and sustain profitability.

Standing out and succeeding on Amazon is becoming increasingly difficult. This is true even for the most established brands. The research identified five of the most pressing challenges faced by businesses selling direct to Amazon (Vendor Central); gaining control of their brand (45%); setting a competitive pricing strategy that sustains profitability (42%); navigating the constantly changing ecommerce landscape (40%); pricing products competitively (39%) and advertising products effectively to reach their target customers (39%).

Retaining Price Control

It is reported that many brands are finding themselves under margin pressure when selling to Amazon. Amazon Vendor aggressively competes for the Buy Box and price matches off-Amazon promotions. When doing so, taking into account costs to deliver next-day to consumers, it’s often the case that items become unprofitable.

CRaP (Can’t Realise a Profit) products will be supressed and harder for consumers to find and purchase unless the brand is willing to provide additional funding to Amazon. This in turn drives the Amazon channel into neutral or negative margin for the brand.

Diversifying Risk Via Hybrid Models

Amazon Marketplace via Seller Central sellers now accounts for the majority of items sold on Amazon. Even well-known brands are increasingly employing hybrid models, mitigating price and terms risks with Vendor Central via rolling out Seller Central and/or Amazon Fresh channels. Operating as a Seller enables brands to control selling price and 32% of those surveyed had already started selling both directly to Amazon and as a third party seller.

Via Seller Central APIs, brands have better access to retail and aggregated consumer shopping insights. Brand Analytics, for registered brands via Seller and Vendor, is value-add but time consuming and offers little capability for trend analysis. Integrating via APIs is complex but if done well provides actionable data sets that can address some of the challenges listed above and make a significant difference to performance.

Key Areas For Investment

Brands are also investing in third-party ecommerce solutions. The Censuswide study reported that three quarters (75%) of ecommerce decision makers expect their budget to increase for tools to support their ecommerce strategy, while over three quarters (77%) agree that their company needs to invest more in ecommerce expertise.

From day one, Acorn Intelligence set out to empower brands and sellers. Via providing expertise and leading technology solutions built with and for brands that sell consumer goods we help partners scale and deliver profitable sales. Acting as an extension to client teams or helping in-house strategic Amazon and ecommerce capabilities Acorn-i is well placed to support your brand solve the issues raised above.

Censuswide data reported via IT Reseller.

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