Interviews, insight & analysis on digital media & marketing

The NDA Roundtable: The Dos and Don’ts of Making Friends with Amazon

This is the third in a series of articles sparked by our roundtable produced in partnership with Maze-One UK, the marketplace specialist agency.

Bas Van Kesteren, Reckitt Benkiser?s EU ecommerce director; Remco Evers, HG manager of ecommerce and marketplaces; Gracia Amico, chair of Pet Mate; Remco Schevenhels, ecommerce manager, Signify (formerly Philips Lighting); Roger Morgan-Grenville, MD of Dexam; Jane Savage, head of marketing and channel strategy for Roc Skincare; Tejesh Adavi, Nutravita?s head of marketplace strategy, sales and operations; Jag Lehal, founder of JAG London and Frank Mertens, founder of FM Consulting joined Maze-One London?s co-founders Rupert Staines and Dan Brown at the virtual round table held earlier this month.

It can be hard for brand marketers to understand the intricacies of marketplaces without expert help. The simple message is often to list your goods just because. But marketplaces have the complexity of social and search strategies, encompassing a number of elements that help one brand stand over and above their rivals. 

This could be pay to play elements such as sponsorship or a sophisticated search strategy that points potential customers to your Amazon listing. It cannot be a case of simply listing products. With 3000 new daily entrants on Amazon alone, it will be hard to be seen amongst the competition. 

Though there are alternative marketplaces to consider, in the UK, at least, Amazon is the trailblazer. It launched in 1994 initially as an online bookstore, but now has tentacles across all aspects of commerce and technology, acting as both a first party seller and a distributor. For many brands, it is an important ‘frenemy’. It gives access to valuable new audiences at home and overseas, but you need to invest.

How to negotiate a tech platform

How, then, do you build a sustainable relationship with Amazon? New Digital Age, with our partner Maze-One, brought together a select group of industry luminaries to debate this very topic. The discussion explored the pros and cons of having access to the 86% of the UK population who are Amazon users (with some 16m+ active Prime customers), as well as the opportunities afforded by smaller scale and niche marketplaces.

Executives from companies including Reckitt Benkiser, Pet Mate, Signifiy and Roc Skincare, and marketspace specialist agency Maze-One discussed how brands today can stand out online and reach these valuable new customers. 

A big bugbear for many of them was having a ‘relationship’ with Amazon as they would with other suppliers. Yet a bigger opportunity still was having easier access to international markets, particularly as Amazon’s logistics platform has sustained the increase of orders in the wake of the coronavirus. Marketers, said Staines, should remember that Amazon (and similar marketplaces) was essentially a tech and logistics platform. They needed to find a new way to relate. 

Think Facebook, but with marketplaces in mind

He cautioned that Amazon was the 500 pound gorilla with millions of customers across 14 territories. “It is akin to Facebook,” he said. “With Amazon, purely because of the economies of scale, the cost of acquisition is going to be significantly lower than that of your own site.”

That, alone, was a strategy worth pursuing but he also insisted that rather than cannibalising sales a smart marketplace strategy would actually increase activity on a brand?s own site. Consider that many people begin their search story on Amazon or other marketplaces and end up on a brand?s transactional portal, looking for added extras or exclusive deals. 

“It is very difficult to create a relationship with Amazon,” said Mertens. “You need someone in the team who really knows how to run the system in a way and how to make best use of the algorithms or  the sponsorship. Of course there are tools already there. I’m looking for experts at this point in time that can join us and really fast track this because though it seems straightforward there are other marketplaces that are easier.”

Building a relationship with Amazon should not be the goal, according to Maze-One?s Staines. “At the end of the day, Amazon is a technology platform in the way that Google is, that Facebook is. It can’t possibly build relationships with all the brands operating on their platform especially with over 3000 sellers joining daily.”

For Van Kesteren, Reckitt Benkiser’s EU ecommerce director for hygiene, it’s about the balance. Being on a marketplace such as Amazon or Ocado gives the company more exposure to data than in-store, less than on its own properties, but at a better level of value than either. “What marketplaces offer is something of a middle way, you can get more data than from a supermarket and enjoy more sales than on your own platform,” he said. 

There are some companies out there that can afford to run a DTC programme that might not show returns in five, six or seven years, but they are few and far between. Most others will instead be looking for a hybrid approach that brings in results over the shorter term as well.

In short, a sophisticated and successful marketplace strategy is at least as complicated as a search or social one, but done right, elevates a brand above and ahead of its rivals.

Read the first article in this series here and the second here.

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