With more and more brands selling their products on Amazon.com, there's increasing discussion about the pros and cons of doing so. Selling on Amazon makes sense because that’s where consumers are. However, listing on the marketplace can decrease the number of visitors to a brand's e-commerce site, where they're better able to convert traffic to sales.
The Amazon debate is remarkably similar to the one that simmered over affiliate marketing years ago. At the beginning, retailers didn’t want to list their sites with thousands of affiliates, paying a commission per purchase. They resisted diluting their brand and messaging in favor of owning the purchase experience.
The sheer volume of sales possible at a very profitable cost via affiliate marketing, however, turned it into one of the most valued channels for most retailers. At the end of the day, brands have to go where their customers are. This used to mean the mall. Today, it means Amazon.
The Power of Amazon
Amazon sellers are already impacting in-store traffic and sales. Mall foot traffic is in severe decline, and retailers are closing locations at record rates.
People want shopping to be an experience. If going into one of your stores doesn’t offer anything unique or exciting, consumers would rather shop from the comfort of their own homes.
Amazon’s strength comes from its algorithmic product recommendations, shipping options, customer service, cross-device seamlessness and ease of checkout. It mastered the game of making it easy to shop anytime, anywhere — which means Amazon has also mastered customer relationships.
The Power of Data
Amazon is notoriously guarded about sharing detailed information with its advertisers or merchants, but there are ways to gain access to its data. The good news is that retailers can use existing customer data to their advantage. By tying a campaign to transactions that occurred on Amazon, you can get a better idea of its effectiveness, regardless of where the product is purchased.
Here are four ways you can use Amazon’s data to drive your own sales:
- Campaign effectiveness: You understand how consumers interact on your site, but engagement with ads isn’t always a direct path to purchase. You need to understand your customers’ journeys once they click. Are they comparison shopping? Checking out the competition? Performing multiple Google searches? This information will help you allocate marketing dollars to escort consumers down the sales funnel.
- Market share and demographics: To be truly competitive in online marketplaces, you must understand who your audience is and what they want. What are the differences between millennial women and Gen X men? What about geographic differences? How do Prime members and non-Prime members behave differently? With this data, you can then choose the best categories and types of products and experiences to create.
- Site search: Keywords aren’t just for big search engines. Knowing what people search for on Amazon is powerful for your campaigns. Understanding these terms for your niche will help you optimize a product feed to appear higher in search results.
- Purchase history: You would be surprised by the products that perform well in a marketplace. Analyzing customers’ purchase histories — and which channels or distributors delivered those purchases — is vital. This data can help you know your customers on an individual and aggregate level, which helps you increase sales through targeted programs.
The bottom line is this: You must decide whether short-term sales are valuable enough to risk losing customer relationships. Remember, the best way to mitigate any potential loss is by making the best use of the customer data available.
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