The internet has drastically affected the way we research and purchase products, regardless of whether it’s a weekly grocery shop or something a little more special. Before the COVID-19 social distancing rules came into play, 63% of shopper journeys were already beginning online, with nearly 50% of shoppers using mobile to make a purchase rather than visiting a store. Now, we are also faced with many shoppers hunting for online delivery slots from their local supermarkets as consumers only venture to the physical store for essentials. So how do these consumer shifts in behaviour affect brands?
When looking at the online visibility of Amazon against its competitors, everyone else pales in comparison. 90% of UK shoppers used Amazon last year, and a market share of 30.2% puts them first in UK online sales.
When focusing on visibility, it is evident that Amazon shows no signs of slowing its growth. While it is difficult to compete with Amazon in areas like visibility and product range, there are gaps where all sites can challenge the brand’s supremacy.
Now more than ever the consumer is king, and it is imperative to have a presence throughout the purchase funnel. Customers expect to be able to find the information they want and need quickly and easily, and Google, in reaction to this, only want to place content that will resonate with consumers high in the SERP (Search Engine Result Page).
Amazon’s dominance comes from their ability to provide customers with a huge range of products which are relevant to their search query – an ability which most other retailers are unable to compete with them on.
Plus, the current COVID-19 pandemic has only served to cement the dominant position of Amazon and other ecommerce giants. Alongside the hospitality and travel sectors, COVID-19 has dealt a huge blow to the retail industry, with forced store closures for all but those deemed essential. As even more customers than usual make the move online, Amazon is there to meet their needs. Google searches for the brand are almost at holiday season levels, and customer spending has increased by 35% from the same time last year.
It’s clear that Amazon is going to make it through to the other side of the current crisis. Indeed, they are likely to be permanently strengthened as consumers come to view the brand as much more than just a convenient shopping solution during this time. But for many other brands, coronavirus is a very real threat to their continued survival, and this has only been compounded by Amazon’s reinforced dominance.
However, there are ways that brands can begin to fight back against the rise of super-sites such as Amazon. Techniques to gain space and momentum in the digital arena are high on the agendas of top brands across the world – and in the midst of the COVID-19 pandemic and its impending fall-out, their uptake is particularly crucial.
The subscription model is just one example of how brands can compete against the likes of Amazon. The level of convenience offered by the ecommerce giant is undeniable, and this is in part due to their subscription services. For instance, Amazon’s Subscribe and save option gives users an opportunity to automatically receive certain products each month. Other brands are following suit; Tesco now uses a Clubcard Plus subscription scheme, while online beauty brands, such as Birchbox and Beauty Pie, base their entire business model around a tailored monthly subscription service.
Brands that fight back
Amazon is in no way slowing down their growth, with visibility growing exponentially year on year. Leading brands have reacted to this in a number of ways:
Understanding your audience – providing content where Amazon can’t.
A customer-centric approach to marketing allows brands to create content that serves their users’ needs at all stages of the buying funnel. It is imperative to understand your key customer journeys and provide evidence that your brand has the expertise, authority and is trusted in your chosen topic or market area.
A great example here is the relatively small specialist AV retailer, Richer Sounds. They have created in-depth content to target the more discerning HiFi or TV buyers. When attempting to rank for general ‘TV’ terms, they have no presence at the top of the SERP. However, for a longer tail and more specific ‘TV’ terms, Richer Sounds rank well because they have isolated a specific customer who they want to target: a technically savvy user who understands precisely what they are after, rather than someone who is simply looking for a cheap TV.
Owning your own space – reviewing what is important and assigning appropriate resources while having clarity on your brand’s specific competitors.
Google appears to assign more relevance to sites with a wider product range in specific areas. However, in order to compete, brands need to review exactly what they have to offer and tailor their strategy around this.
Working with super-sites and direct to consumer – putting a product where the customers are purchasing.
Brands should review these tactics and use them all as a basis for gaining as much space against these sites as possible. These should be used as part of an integrated marketing approach across all digital channels.
Working with supersites
For brands competing against super-sites, owning your own space may only be half the answer. When it comes to eyes on your products, a solid strategy is to have a presence where the majority of customers are located. Engaging in appropriate channels has always been a vital part of any marketing strategy. Amazon, eBay, and other marketplaces and resellers can now be seen to be just as important as traditional digital marketing channels such as PPC and natural search.
Fast fashion retailer New Look is just one example of a brand adopting this strategy by adding their inventory onto Amazon, but this may not be the only answer. Communication with potential customers should be two way, with brands responding to customers’ wants and needs. However, brands can often struggle to fully represent themselves on the platform, which can lead to difficulties in differentiating your brand from your competitors. Nike severed ties with Amazon in late 2019 for precisely this reason. The deal, which saw the sportswear giant serving as a direct wholesaler to Amazon, failed to give Nike sufficient control over the marketplace or its products.
By using Amazon where appropriate, but also selecting alternative sales channels, brands can be present at many more touchpoints, and at front-of-mind no matter where the customer is in the process of making a purchase.
One way of ensuring visibility on both Amazon and other sites is by using third party tooling. A review of their relationships with third party sites, as well as their own, and the presence of a robust strategy for working with marketplaces, will allow brands to pivot to the most appropriate channel for their customers, ensuring they can be reached on all platforms.
The current coronavirus crisis is having an impact here too, providing added impetus for brands to work with and use super-sites such as Amazon to their advantage – expanding their consumer reach without investing in any of their own infrastructures. For example, both Morrisons and Pret have increased their Amazon presence in the midst of the pandemic.
Coronavirus has brought a brand-new dimension to the Amazon challenge facing brands today. While COVID-19 looks set to strengthen the position of Amazon and other super-sites as convenient online lifelines for consumers both during and after the pandemic, it is also acting as a catalyst for the rise of the direct to consumer model. As supply chain and distribution channels experience disruption, and as consumers come to value an intimate customer experience during a particularly difficult time, demand for direct to consumer is on the up. Brands with an established direct to consumer model experienced up to a 200% increase in their sales during the first week of the COVID-19 lockdown.
Hence, it is crucial not to rely solely on Amazon or any other third party to be the main source of income from online sales. The most successful brands will have an integrated strategy – including multiple platforms plus owned channels – working in partnerships with tool suppliers and agencies to gain as much ground on the super-sites as possible.