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Why Everyone Now Needs an Amazon Strategy

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Amazon is projected to bring in $4.6 billion in online ad spend this year, making it the third largest online advertising platform, overtaking Oath and Microsoft. But it isn’t just the advertising business that is making headlines. Amazon is disrupting every aspect of commerce, both online and offline, for businesses big and small.

Small Business

One of the “delight” factors of Amazon is the way in which the site surfaces products from small, local sellers via the “Interesting Finds” toolbar. The products aren’t exclusively from SMBs, but many are. On top of that, Amazon just recently launched Storefronts, which showcases SMB products exclusively.

Storefronts is a “curated collection of over one million products, and deals from nearly 20,000 U.S. small and medium-sized businesses.” The site will offer 25 different product categories and will also be promoting these businesses with stories and videos.

In the past, Amazon reported that there are more than 1 million SMB sellers on Amazon. As an example of this, on Prime Day (July 16, 2018) the company reported that globally, SMBs made more than $1 billion in sales within a 24-hour period.

Over the last few years, the company has also introduced a variety of tools for helping SMBs sell through the platform. In many ways, Amazon is the best opportunity for SMBs to DIY ecommerce. While selling directly from a website is more profitable, many SMBs aren’t looking to invest in building e-commerce capabilities, ongoing merchandising, maintenance, handling technical issues, etc.

National Brands

With Amazon improving advertising capabilities, brands selling through Amazon will need to get on board. This means getting to understand search behaviors on the platform.

Fortunately, for experienced search marketers, there should be alignment between Amazon and Google product search behaviors, making familiar keyword targeting and tactics still relevant. However, the actual act of buying advertising, targeting, and executing campaigns on Amazon will present a learning curve for marketers unfamiliar with the platform.

Offline, a controversial partnership helped Kohl’s increase foot traffic by allowing consumers to return items purchased on Amazon. According to GroundTruth data, “Kohl’s locations that offer Amazon returns have seen a +0.8% increase in foot traffic share within the Kohl’s brand.” In addition, the acquisition of Whole Foods, and with plans to open thousands of “cashierless” stores, Amazon is finding more ways to engage with consumers offline.

Finally, while Amazon still dominates ecommerce, new data suggests brands are starting to offer better direct to consumer ecommerce experiences which are chipping away at Amazon’s share across key categories. For example, according to Jumpshot’s “Competitive State of eCommerce Marketplaces Data” report, in women’s clothing, Amazon’s share has decreased by 30% since last year, while H&M’s has grown by 77%.

Amazon’s impact on the way people buy and sell products is far reaching. No matter the size, any business that sells products should have a strategy for working with, competing against or advertising on Amazon. After all, data show that in the second quarter of 2018, 54% of product searches began on Amazon, up from 46% in 2015, overtaking Google for the top site for product searches.

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