The retail paradigm is rapidly changing.
Retailers traditionally performed a number of functions for consumers that fostered and validated consumers’ purchase decisions, including providing physical access to goods, leveraging economies of scale to drive down costs and curating assortments under their trusted brand as a seal of approval.
Eric Roth, managing director and head of the consumer retail group at investment bank Lazard Middle Market LLC
Now, product information is readily available, pricing information is highly transparent and large retailers are developing supply chains that enable more cost-effective delivery of goods. The commoditization of these traditional retail functions benefits the largest players—retailers such as Amazon.com Inc., Walmart Inc. and Wayfair Inc.—that can leverage their massive infrastructure and significant buying power to offer consumers the lowest prices and fastest delivery times.
While merchants grapple with this changing retail landscape, the highly competitive e-commerce market for paid search has made the situation even more challenging. Specifically, a negative feedback loop enables large online retailers to outbid the competition to acquire traffic, giving them more scale, which contributes further to cost advantages that they pass on to consumers.
In this article, we will address the question of when brands matter to consumers and highlight examples…
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