Commentary

Is Amazon Your Frenemy? Our Panel Calls The Retail Giant A Partner

“Facing Amazonification”

Moderator Will Margaritis, VP, eCommerce, 360i

Panelists
Doug Chavez, SVP, digital commerce, North America, Geometry
Kristen Rumfola, director of marketing and ecommerce, Happy Family Brands (organic baby food)
Kenneth Tan, head of ecommerce, Premier Nutrition

Will: Amazon is entirely unavoidable. Tentacles are everywhere. May be working on a private label competitor to you but you need them. Amazon as a frenemy. What’s your relationship with Amazon?

Kenneth: Partner. They help us drive our penetration. They could grow our business by quadrupling, 20 times our business. In terms of how they do it, personalization; I’m leveraging their algorithm. We can’t manage all the data. Advertising, because of data they sit on, you need to be okay to get enough data to feel good. They do well in terms of in market and lifestyle marketing. I’m focused on low funnel, which products are they buying.

Doug: You’re right, they are partner but you really need to understand the data. Data is the lubricant that runs that platform. As a seller, you have to know your data as well or better than Amazon on a daily basis. Vast majority of searches start on their platform. Getting data on purchase journey helps update product. But if you have a product they can encroach on, how to make your product, positioning much better.

Kristen: With us sharing our media plans, strategies, pushes them to offer more. Biggest thing is you have to be on Amazon. Just accept it, figure out ways to leverage their data, partnerships.

Kenneth: They don’t care about you. They are not symbiotic. What you need to learn is how do I leverage those things that will work for my benefit. Content marketing, when you put product on line, reviews will come in. True content marketing. UGC people love it. They want to look at what you feel about a product. You can’t buy those things. 

Kristen: Search results on Amazon, can see ratings, at POP, very powerful.

Doug: you think differently about content marketing, search from retail perspective, made everyone better and more critical of what you’re doing. Created a whole world of digitally native brands. Yes, has disrupted but created opportunity. You’ve got to become an expert at data, hire some good analysts. 

Kristen: Amazon is very thorough, when they tell us it’s first party data, I believe it. Another way to have access without having to be a huge investor. Also in market data, you can leverage that data to have more confidence behind your media, advertising. If we put an ad in front of that person, makes media/advertising a little more legitimate.

Kenneth: When we launch a new product, you can see what people are buying. Test your hypothesis.

Doug: a bit of ad stuffing going on (Will: more than a little bit). Yeah, a ton of it. Amazon puts consumer at center. We have more visceral reaction to it that typical consumer. Ad stuffing, where’s the tipping point. How to combat that?

Will: Amazon launched placements for search, sponsored products, headline search ads bottom and top, sponsored brands, in line video ads in app. Does this devalue your placements? 

Kristen: Look at performance, test results. I do thank Amazon for giving another channel out side AdWords.

Kenneth: if it’s all about optimizing for sales, no matter how much ad unit is out there, it’s all good. Not a foolproof thing. Do I have a clear strategy and then going into details on what’s working. Cost is increasing.

Doug: ROAS will reach an apex at some point.

Kenneth: No CPG company has more than 10% presence on Amazon.

Kristen: Amazon’s a great way to have brand, product awareness. Depending on your budget, margins, you can use it to grow awareness. 

Will: Helping your website flourish, how can brand.com is surviving in face of Amazon but getting attention internally and externally?

Kristen: The best thing to do is evaluate what Amazon offers, low prices, fast shipping. Looking for, say, cellphone accessories, you get a ton of option. But you can offer smaller number, tailored. At Happy Family, baby food space very competitive. You can order pouch on our website, what does Amazon offer vs what customers want. Customization. Launched subscription program that ties in child’s age to meals, snacks, fun box. Amazon’s never going to do this. We listened to what our customers wanted And gave it to them.

Kenneth: We have opposite strategy. Products you can buy anywhere so what is ecommerce for us. It’s about driving first time usage, conversion, the trial. When people thinking about our product, we give them a plethora of solutions. More leveraging what you prefer. We also sell D2C but if they want to buy it elsewhere, the price will never match up. 

Kristen: We’re going to put an Amazon button on our website as well.

Doug: How you want to get people to buy more products across the portfolio, from a brand site you have reasons to send them back to Amazon for certain things. 

Will: Amazon’s been great at lowering the barriers to entry. But some putting product bought on Alibaba, putting it on Amazon. White labeling, small brand.

Doug: Head phone space, Bose, Anker, I will freak out if I lose my Bose headphone on a plane. $300. Anker comes out with head phones equal in quality but $100. If I lost, less freaked out about that. Anker puts all attributes right up in the search results. Very disruptive. Such brands disrupting the space.

Kenneth: Amazon is a tool that, if used, correctly can actually build a brand. Launched Amazon Aspirater program, selling only on Amazon, will be branded as Amazon-owned on widget. Placement is on search. And buy bots. Truly starting to overuse their data, cannibalize. Dangerous step. 

Video of this session will be available here tomorrow.

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