Winning on Amazon isn’t complicated – you just have to understand how the platform ticks
In a webinar hosted by Threepipe Reply and PZ Cussons, three beauty industry specialists that work in Amazon e-commerce discussed the ways in which beauty brands can succeed in selling on Amazon by utilizing several tools that are available from the Amazon Vender Services platform. Emily Bidder, Senior Online Brand Activation Manager for PZ Cussons, Joanna Lambadjieva and Nick Christensen, both Managing Partner at Emergent Retail (part of the Threepipe Reply brand performance group) discussed the ways in which brands can find success, and narrowed the elements of success down to five categories which we’ve outlined below.
“We saw Amazon as a real opportunity to reach our end consumer to fulfill that replenishment because if you buy a product in a salon it’s unlikely you’re going to go back to the salon to replenish it. We needed to find that kind of direct route to market,” Bidder says of how brands like Sanctuary Spa determined the need to begin selling on Amazon.
“There’s four key considerations I find within the product mix. The first one is your portfolio. Amazon always tells us that they are the ‘everything store’ so we work with them on a regular basis to get them all of our products,” she says. The company determined that it was in their best interest to offer a wide range of products, and bundling was an easy way to offer more products without having to create entire new lines of products within the brand. “We multipack [products] together for profitability. Gift sets are an enormous area of success on Amazon. Across the board and across different categories Amazon is really looking to drive gift sets forward and we’re really seeing insane results there,” she says.
Bidder also discussed the ways that launching a product as soon as it hits their warehouse is beneficial on Amazon because the sooner the product can start earning reviews and ratings, the faster it will grow organically within Amazon’s internal search algorithm. Where drawn out product launches to advertise a product long before it hits shelves may have worked in retail commerce, on Amazon it may end up hurting your brand. “You always need to be ten steps ahead in terms of thinking how something is going to impact you in the months to come,” Bidder says.
Using detailed and well-researched data to understand the market before you begin selling on Amazon will be a major element of your success on the platform. Create a market intelligence dashboard to get a full and in-depth understanding of how the market is doing from a data perspective before you begin selling products on Amazon, and use that data to your advantage in anything from product page optimization to advertising strategies.
Market intelligence data can be used in every aspect of selling on Amazon. It helps in account optimization by telling sellers what they need to optimize within their Amazon listings, and how to optimize their own budget for Amazon selling and advertising. “We use this data to understand any consumer behavior trends,” says Nick Christensen. From new products to new product development, market data is one of the greatest tools you can utilize as a seller.
The data also helps with strategy refinement to help brands determine how they can best position themselves on Amazon beyond the traditional Amazon Marketing Services’ sponsored content (AMS) approach. Ordinary sellers might use a strategy that optimizes their listings specifically for Amazon, but thorough market intelligence tells sellers that there are other ways to strategize their brand in order to best take advantage of Amazon beyond those ordinary strategies.
“Within the skincare category we can see that face care is trending,” Christensen says. “With the current environment people are looking for pampering surrounding anything in sleep and relaxation, so we were able to expand our portfolio in sleep related products,” he says. Invaluable market research will help you expand your product mix into areas that consumers are already interested in.
Amazon keyword optimization is very important because the Amazon algorithm prioritizes keyword research and optimization. 80% of traffic in a search result clicks on a product on the first page, and 62% of that traffic goes to the top 3 results on the page. However, catalog optimization on Amazon differs from other search engines in ways that can impact your results if the optimization isn’t done right. Make sure that the people in charge of optimizing your listings are educated and well-versed in how to optimize ASINs (Amazon Standard Identification Number, the number assigned to each individual listing on a product) specifically.
It’s also important to optimize product listings for your customers. The customers are looking to be informed and to have a good understanding of the product. Include any relevant information to the product within the listing, whether it's the different uses for the product or the results that a customer might expect from using the product.
Keywords that a customer might search to find your product should be in the title of the product, and product descriptions should serve as educational tools rather than opportunities for keyword stuffing. Additionally, make sure that your products have plenty of photos to help customers learn the most about your product that they can before making a purchase. Christensen pointed out that many Amazon customers are first time customers, meaning they’re often undecided. Use your product listing pages to your advantage and treat them like a sales deck to convince new customers to try your product.
The biggest shift on Amazon in the last year is that it’s integrated more utilities into the brand store feature, enabling customers to shop for products on a brand store’s page rather than searching individually through Amazon. This has enabled bigger brands, particularly brands with a larger catalog of products, to be able to cross promote and sell their entire catalog on Amazon while maintaining similarities to a traditional e-commerce platform.
Successful data-driven brand stores will:
Brands should treat the brand store as an evolving asset that is key to their success on Amazon.
80% of shoppers use Amazon to discover new brands, and brands should question how Amazon can be used to earn new customers while providing easy access to their products for their existing customer base. This data suggests that consumers on Amazon are undecided and can be convinced to make a purchase using the tools Amazon sellers are given. Amazon has also expanded its reach in the beauty industry in recent years, attempting to dominate as one of the premiere online beauty sellers.
Amazon targeting is quite similar to other platforms, but there are elements of it that are more unique—particularly in targeting. Product and category targeting is unique to Amazon in that you can target competitors specifically, enabling you to acquire new customers based on searches for competing products.
The most important thing to understand about advertising on Amazon is that the platform is inherently different from other e-commerce platforms or indexing sites. Differences in the Amazon algorithm mean that your approach to advertising might be a bit different, as will your strategy. Christensen suggested that brands focus on driving traffic onto Amazon from other websites, as it will help with their organic ranking if the algorithm thinks that product is in high demand from external traffic sources.
Bidder suggests hiring an AVS (Amazon Vender Services) brand specialist to help your brand access and utilize features that are unavailable to those working with Amazon on their own. The benefits that come with an AVS brand specialist often include things like direct contacts with Amazon, trend forecasting and data points that are often unavailable to the general public. Consider these specialists to be people from within the company that can advocate on your behalf and help you find success on the platform, taking away a lot of work that you’d need to do just to get where they are. “It’s very expensive, which can be quite off-putting, but for me I consider it a cost to serve,” Bidder says of the benefits to hiring an AVS brand specialist.
The flywheel
Bidder emphasizes the importance of understanding the flywheel in relation to how Amazon and its algorithmic search and suggestions platform impacts sales. “One of the biggest things that impacts the flywheel is stock availability,” she says, clarifying that the flywheel concept is uniquely important to the success of a product on Amazon. Week over week, Bidder points out that one of their ASIN’s saw exponential growth up until the listed stock on the product got to a low enough level that the algorithm stopped recommending the product.
“In a normal retail environment, meaning like a physical store, when you go out of stock the product is no longer on the shelf so the consumers are not able to buy it so you’re losing sales,” Bidder says. “But as soon as you refill the shelf, then people start buying again. That’s the real difference on Amazon is that when you go out of stock, you lose [the advantage] of that algorithm and your reputation with it is almost tarnished because they think you’re unreliable,” she says. “Your ASIN’s have likely been suppressed, and once you go back into stock you have to start building that reputation again,” says Bidder of the importance of keeping products in stock on Amazon’s website. “It is very detrimental and it’s something we manage really closely.”
Bidder suggests that when you anticipate that you may go out of stock on a product, as it is often inevitable, that you could start pulling back on investing in advertising to sort of force that algorithmic advantage to slow itself down in order to avoid having it happen unintentionally.
In short, all three speakers emphasized the importance of three major aspects to winning on Amazon: never go out of stock, have an AVS specialist, and have a good product mix to diversify your listings and boost your organic ranking. While something like an AVS specialist might be a big expense, the benefits that come with it could mean that much of the work in succeeding on Amazon is optimized, and that you have someone at the company working on your behalf.
We'd love to make this blog more relevant for you! Email us with topic suggestions: social@covalo.com
Disclaimer: The information provided (on our blog) is accurate to the best of our knowledge, however, there may be errors. As a neutral organization, we at Covalo do not advocate or promote certain products or ingredients on our platform as better than others. The Site may contain (or you may be sent through the Site) links to other websites or content belonging to or originating from third parties or links to websites and features in banners or other advertising. Such external links are not investigated, monitored, or checked for accuracy, adequacy, validity, reliability, availability or completeness by us. For more information on our blog, contact social@covalo.com