From bricks to clicks: How brands must adapt in the age of Amazon
If you ran out of toothpaste or deodorant in 2008, you likely stopped by the local drug store or supermarket aisle — to a CVS or a Safeway. Today, shoppers eschew the store and, instead, tap the “buy” button on Amazon. Indeed, almost all sales growth of drug store-centric categories is happening on the digital shelf. Amazon rapidly has expanded sales efforts in vitamins, health and personal care items, cosmetics, packaged foods and OTC medicines. And it appears Amazon is gunning for prescription drugs, scooping up the last remaining magnet of physical drug stores.
For brands, this new reality requires a new digital shelf strategy that is geared towards marketing and selling their products online as e-commerce continues to grow. Here are the key mindset changes and investments they must make this year to survive and thrive on the digital shelf.
Get on page one or die
On Amazon, there is no limit to the number of shelves or items on sale. The only thing close to a physical shelf is a category page on Amazon, and those can have hundreds of products. But most Amazon shoppers find products through search, and they overwhelmingly purchase products on the first page of search results. That page is reserved for two kinds of products: those that pay a ton of money for top placement, and those that design and optimize their product detail pages for Amazon’s search engine. This means your team needs to learn how to think through all the search permutations that might lead a shopper to your category and your products. For example, if you are selling omega-3 capsules, buying the search term “fish oil” or optimizing your content for fish oil may leave out other such closely related terms as “krill oil” and “omega-3.”
From monthly store walks to hourly SKU checks
In stores, the lights go out, and things move at a sleepy pace. Not so at Amazon, where your customers never leave, and the register rings 24/7. This requires a radically different level of vigilance due to three potential scenarios. In the first case, you can get “CRaP-ped out,” an Amazon acronym for “can’t realize a profit” that results in the retailer unilaterally dropping a vendor’s products because it deems them no longer profitable. In the second, your competitors can suddenly mount a sneak attack on your category by buying up a host of keyword search terms. And in the third, your leading product can simply be out of stock over a long weekend, and no one got the email because Amazon never, ever calls you on the phone. This is real, real, real-time retail.
From coupons to subscriptions
Physical stores let you slap coupons on products and offer them in the Sunday circulars of the big chains. But Amazon has a far stickier set of strategies to lock in buyers — its Amazon Prime membership for two-day-or-less home delivery and its “Subscribe and Save” offers for popular CPG products that frequently need to be replenished. With “Subscribe and Save,” Amazon offers discounts to customers who agree to set up auto-purchase agreements of products, converting them from monthly maybes into steady reorders. This is money in the bank for smart brands and their teams that are finding compelling ways to pitch this program in their page copy. Another area to watch is Amazon’s nascent “Dash” program, which mails customers free-standing buy buttons they can push to call for a product refill whenever it runs out — like a panic button for a shopper. Talk about a direct connection.
These are just a handful of ways that Amazon is transforming what had been a relatively predictable and comparatively simple retail game. The days of driving traffic into stores and running smart trade promotions have evolved into an always-on, laser-focused fight for the rarest of all commodities, even on Amazon — the attention of shoppers.
Gary Liu is vice president of marketing at Boomerang Commerce.
For brands, this new reality requires a new digital shelf strategy that is geared towards marketing and selling their products online as e-commerce continues to grow. Here are the key mindset changes and investments they must make this year to survive and thrive on the digital shelf.
Get on page one or die
On Amazon, there is no limit to the number of shelves or items on sale. The only thing close to a physical shelf is a category page on Amazon, and those can have hundreds of products. But most Amazon shoppers find products through search, and they overwhelmingly purchase products on the first page of search results. That page is reserved for two kinds of products: those that pay a ton of money for top placement, and those that design and optimize their product detail pages for Amazon’s search engine. This means your team needs to learn how to think through all the search permutations that might lead a shopper to your category and your products. For example, if you are selling omega-3 capsules, buying the search term “fish oil” or optimizing your content for fish oil may leave out other such closely related terms as “krill oil” and “omega-3.”
From monthly store walks to hourly SKU checks
In stores, the lights go out, and things move at a sleepy pace. Not so at Amazon, where your customers never leave, and the register rings 24/7. This requires a radically different level of vigilance due to three potential scenarios. In the first case, you can get “CRaP-ped out,” an Amazon acronym for “can’t realize a profit” that results in the retailer unilaterally dropping a vendor’s products because it deems them no longer profitable. In the second, your competitors can suddenly mount a sneak attack on your category by buying up a host of keyword search terms. And in the third, your leading product can simply be out of stock over a long weekend, and no one got the email because Amazon never, ever calls you on the phone. This is real, real, real-time retail.
From coupons to subscriptions
Physical stores let you slap coupons on products and offer them in the Sunday circulars of the big chains. But Amazon has a far stickier set of strategies to lock in buyers — its Amazon Prime membership for two-day-or-less home delivery and its “Subscribe and Save” offers for popular CPG products that frequently need to be replenished. With “Subscribe and Save,” Amazon offers discounts to customers who agree to set up auto-purchase agreements of products, converting them from monthly maybes into steady reorders. This is money in the bank for smart brands and their teams that are finding compelling ways to pitch this program in their page copy. Another area to watch is Amazon’s nascent “Dash” program, which mails customers free-standing buy buttons they can push to call for a product refill whenever it runs out — like a panic button for a shopper. Talk about a direct connection.
These are just a handful of ways that Amazon is transforming what had been a relatively predictable and comparatively simple retail game. The days of driving traffic into stores and running smart trade promotions have evolved into an always-on, laser-focused fight for the rarest of all commodities, even on Amazon — the attention of shoppers.
Gary Liu is vice president of marketing at Boomerang Commerce.