Rob Gonzalez, co-founder and vice president of business development
When it comes to Amazon, winning is becoming both more important and more complicated. That was the consensus in mid-October, when I attended an Amazon Hackathon hosted by One Click Retail in Seattle. The hundred or so attendees were tech-savvy e-commerce leaders from a who’s who of the biggest names in B2C brands, as well as several key Amazon employees. I took nearly a whole notebook worth of notes between their and Amazon’s insights from the event.
Brands need more time, resources, and a lot more scrappiness whether they are a multinational or a smaller upstart.
Companies are increasingly treating Amazon as a branding opportunity, and not simply a growing sales channel. A success story from the meetup came from Bai Brands. Within seven years, this beverage maker went from startup to a $1.7 billion acquisition by Dr Pepper Snapple Group. Bai got there by being laser focused on winning on Amazon. That, in itself, wasn’t exactly a unique strategy at the time, but Bai’s willingness to invest in Amazon as a brand-building exercise to help drive wholesale relationships and offline sales was.
Bai approached Amazon as “their website,” going heavy on branding, SEM, and content. Lots of man-hours spent on analysis. Significant investments in Amazon marketing products. This wasn’t cheap, but Bai saw this as their best chance of success, committing to the strategy and looking beyond short-term P&L statements. This unequivocally paid off. Bai not only beat out larger rivals on Amazon, its Amazon-first strategy even improved its offline sales.
Bai’s case really emphasizes the growing power of Amazon as the default search engine and the most important part of the digital shelf. How many brands have spent millions on their own brand.com site, only to let their product detail pages on Amazon language in the B-/C+ realm of “just good enough?” Bai’s—and others—success proves that Amazon now is impacting offline purchases as small as an 18-ounce drink.
There were many brand leaders at the One Click Retail conference that took this necessity of scrappiness to heart. Patrick Miller, co-founder at Flywheel Digital, explained to the crowd: “Amazon is not a game of strategy, it’s a game of tactics. The details and execution of lots of small things matter more than big ideas.”
This “game of tactics” goes beyond marketing. Large brand manufacturers often have to rethink their assortment strategy, sales strategy, or their supply chain. Mondelez famously reinvented their assortment by creating Oreo pack sizes more appropriate for e-commerce, Coke is selling differently with its Click & Collect thought leadership, which is exploring how to bring impulse buying to the digital shelf. Barilla had to reimagine its supply chain in order to meet the requirements for FBA [Fulfillment by Amazon] Prime a few years ago.
In each of these cases, huge, legacy brands had to drastically rethink major aspects of their business and marketing in order to address the new online buyer journey. Brands of this size, even with a sizable majority of their business still in-store, are being jolted into undertaking such monumental changes because they understand how Amazon, and e-commerce more generally, are so critical to their long-term outlook.
This means playing by Amazon’s rules in order to grow sales, while being cognizant that fostering any kind of brand loyalty on retail sites is an exercise in quick marketing execution. It’s now all about the algorithm. Brands that listen to the data and treat the algorithm with respect understand that it’s a brand-building exercise, along with a selling exercise on Amazon.
It’s worth reiterating that Amazon’s goal is to deliver an amazing consumer experience. The more you as a brand can be empathetic and put yourself in the shoes of the consumer, the more you’re going to win. That’s what the algorithm rewards over time, and what Amazon’s going for.
One of the major lessons, and a theme that was clear throughout the day at the hackathon, was that winning on e-commerce requires change throughout an organization. The sooner that brands embrace this, the less risk they have of being left behind by newer, digitally native and nimble competitors.
Favorite