Archive for December, 2020

Amazon Quietly Launches a New Sponsored Product Ad Type

Amazon Quietly Launches a New Sponsored Product Ad Type

Sponsored Products are one of the most popular and effective marketing tools that Amazon provides to help brands reach customers. These cost-per-click ads promote individual product listings by appearing where customers will see them when searching on Amazon, such as the first page of shopping results.

Sponsored Products allow advertisers to choose their budget, bids, and targeting parameters. This helps brands of any size reach a wide variety of goals, including generating awareness of a new product, promoting seasonal items, clearing excess inventory, or showcasing best-selling items.

Amazon has recently begun running a new type of ad set that promotes highly rated Sponsored Products. As you can see in the screenshot below, Amazon will select a group of similar Sponsored Products that have been rated highly by customers. These new ad sets are presumably shown to customers who have shown an interest in these types of items based on Amazon’s vast collection of user search data.

While brands have no control over whether their highly rated Sponsored Products will show up in this new ad format, it underscores the importance of not only promoting products on Amazon that have high ratings, but also generating positive ratings and reviews for your listings. Fortunately, Amazon has a few mechanisms in place to help sellers acquire reviews, including Amazon Vine and the Early Reviewer Program. To learn more about building authentic reviews for your product listings, view our best-practices guide.

About Channel Key

Channel Key is a full-service channel management marketplace consulting agency that has helped generate $250M in Amazon sales for retail brands around the world. Complete 360-degree services include marketplace strategies, content development, marketing and advertising, catalog management, marketplace and fulfillment setup, ongoing consulting, and much more. To learn about how Channel Key can help increase sales for your business, contact us today for a free consultation.

Amazon Pharmacy: The Latest Sign That Online Shopping Is Here to Stay

Amazon Pharmacy: The Latest Sign That Online Shopping Is Here to Stay

Customers can now fill their prescription medication via Amazon as easily as ordering a pair of socks or a smart speaker. Well, almost as easily. In November, the retail giant launched an online and mobile prescription medication ordering and fulfillment service called Amazon Pharmacy. The new store allows customers to complete an entire pharmacy transaction on their desktop or mobile device through the Amazon App. Using a secure pharmacy profile, customers can add their insurance information, manage prescriptions, and choose payment options before checking out.

As a new benefit for those who pay $119/year, Prime members receive unlimited, free two-day delivery on orders from Amazon Pharmacy. The new service also provides savings of up to 80% off generic and 40% off brand name medications for Prime members who are currently uninsured. The discount applies not just to Amazon Pharmacy, but also more than 50,000 participating pharmacies nationwide.

Amazon states its new pharmacy service will make it simpler for customers to compare prices and purchase medications for home delivery. The retail giant emphasizes three key benefits that it hopes will appeal to customers:

  • Medication Research and Confidential Orders: The same browsing experience customers are familiar with from Amazon makes it easy to discover what medications – including branded and generic versions, and different forms or dosages – are available through Amazon Pharmacy. Before checking out customers can compare their insurance co-pay, the price without insurance, or the available savings with the new Prime prescription savings benefit to choose their lowest price option.
  • Seamless Transactions: Customers can add insurance information and ask their prescriber to send new or existing prescriptions directly to Amazon Pharmacy for fulfilment. Purchase is as simple as confirming the request on the Amazon App or website.
  • Access to Fully Digital, Personalized Quality Care: Customers have online self-service help options combined with phone access to customer care at any time. Friendly and knowledgeable pharmacists are available 24/7 to answer questions about medications.

The launch of Amazon Pharmacy comes more than two years after Amazon released an exclusive line of more than 60 over-the-counter healthcare products called Basic Care. The products are produced by private-label manufacturer Perrigo and range from allergy and cold medication to hair regrowth treatment. The move was considered by many as a sure sign that Amazon was interested in disrupting the pharmacy industry.

This speculation was reinforced when Amazon announced in August 2018 that it was acquiring PillPack for what was later revealed to be $753 million. PillPack is a full-service pharmacy that delivers individualized, single-serve packets of daily prescription medication directly to patients. Founded in 2013, PillPack quickly proved to meet an untapped demand in the healthcare market. By 2017, the startup was already forecasting $100 million in annual revenue.

“As more and more people look to complete everyday errands from home, pharmacy is an important and needed addition to the Amazon online store,” said Doug Herrington, Senior Vice President of North American Consumer at Amazon in a press release. “PillPack has provided exceptional pharmacy service for individuals with chronic health conditions for over six years. Now, we’re expanding our pharmacy offering to Amazon.com, which will help more customers save time, save money, simplify their lives, and feel healthier.”

Acquiring PillPack – which came with an established logistics infrastructure and proprietary software platform – provided a perfect foundation for Amazon to build out its own comprehensive pharmacy service. The launching of Amazon Pharmacy in November is particularly well-timed. Citing a study by the National Library of Medicine, Nasdaq recently reported that approximately 25% of older adults on a limited income have either delayed or simply not filled prescriptions due to cost during COVID-19. The savings provided by Amazon Pharmacy will likely appeal to these customers, as well as those who are out of work and now uninsured due to a struggling economy.

“Healthcare and drug distribution is ripe for disruption. Amazon has the infrastructure and the pharmacy know-how through its acquisition of PillPack to make it easier for patients to obtain their prescription medication.” – Dan Brownsher, President and CEO of Channel Key

CHANNEL KEY TAKEAWAY

Amazon’s disruption of the pharmacy industry has been in the works for several years now. With a massive customer base and efficient delivery infrastructure, it seemed inevitable that the retail giant would – at some point – find a way to enter the healthcare arena. In the middle of a pandemic, this could not have happened at a more convenient time. It’s no secret that COVID-19 has become a turning point for e-commerce. More people are shopping online than ever before – some because of convenience; others because of necessity. This year’s holiday shopping season has set just about every record imaginable, with Cyber Week generating $34.4 billion in sales, a 20.7% YoY increase from 2019. Perhaps more significant is what people are purchasing online. It’s not just gadgets and gifts. Online grocery shopping, for example, has exploded during the pandemic. Data from Inmar Intelligence shows that nearly eight out of ten consumers have purchased groceries online this year, a 19% boost from 2019. This spike in e-commerce has translated to a greater demand in the healthcare market as well. With more than 160 million Americans taking prescription drugs, it should be no surprise that people want to get their medication with the same convenience and savings that they do just about everything else – and via the same platform.

About Channel Key

Channel Key is a full-service channel management marketplace consulting agency that has helped generate $250M in Amazon sales for retail brands around the world. Complete 360-degree services include marketplace strategies, content development, marketing and advertising, catalog management, marketplace and fulfillment setup, ongoing consulting, and much more. To learn about how Channel Key can help increase sales for your business, contact us today for a free consultation.


REFERENCES:

https://press.aboutamazon.com/news-releases/news-release-details/introducing-amazon-pharmacy-prescription-medications-delivered

https://www.cnbc.com/2020/11/17/amazon-pharmacy-free-prescription-delivery-for-prime-members.html

https://www.nasdaq.com/articles/why-pharmacy-sales-could-be-amazons-prescription-for-huge-growth-2020-12-15

https://www.uschamber.com/co/good-company/growth-studio/pillpack-pharmacy

https://www.bizjournals.com/boston/news/2017/06/16/pillpack-unveils-new-products-eyes-100m-in-sales.html

Cyber Week Review: Revenue, Trends, & Records

Cyber Week Review: Revenue, Trends, & Records

During what has been a challenging time for most Americans, Cyber Week will be regarded as one of the most positive weeks of 2020 – at least for brands. It’s no secret that small- to medium-sized businesses have spent the better part of the year struggling to survive in the wake of COVID-19’s disruption of life and commerce. For those that adapted to the rise in e-commerce, the five-day stretch between Thanksgiving and Cyber Monday was a much-needed relief.

This year’s Cyber Week broke just about every record possible. Not surprisingly, e-commerce dominated sales. A new report from Adobe Analytics, which analyzed one trillion visits and 100 million SKUs from 80 of the 100 largest retailers in the U.S., found that Cyber Week generated a total of $34.4 billion, a 20.7% YoY increase from 2019. More than a third of this spending took place dying Cyber Monday, making it the largest online shopping day in U.S. history.

From a broader perspective, one of the biggest differences about this year’s Cyber Week was its role in the overall holiday shopping season. Traditionally, Black Friday kicks off holiday spending, but this year’s season began more than a month early. What followed was a November packed with e-commerce deals to harness the purchasing momentum of shoppers who spent an estimated $10.4 billion during Amazon Prime Day – and it worked. “Black November,” as many analysts have called it, generated a whopping $106.5 billion to reach a YoY growth of 27.7%.

While each day during Cyber Week achieved considerable YoY growth, performance was slightly less than anticipated. Adobe projected Cyber Monday sales to grow by 35.5%, but it came in at only 15.1%. This is also less than Cyber Monday’s 2019 YoY growth, which reached 19.7%. The largest increase in spending during Cyber week was neither Black Friday nor Cyber Monday, but rather, Small Business Saturday. This aligns with Amazon’s report that Cyber Week saw a heavy spike in 3rd party sales on the platform. While Amazon hasn’t released total revenue numbers for Thanksgiving through Cyber Monday, it did reveal the following data:

  • Independent businesses selling on Amazon surpassed $4.8 billion in worldwide sales from Black Friday through Cyber Monday, an increase of over 60% from last year.
  • More than 71,000 small- and medium-sized businesses worldwide have surpassed $100,000 in sales this holiday season to date.
  • American small- and medium-sized businesses have sold an average of 9,500 products per minute this holiday season to date.

Another interesting takeaway from this year’s Cyber Week was the role that social media played. According to Adobe, social media drove one out of ten visits to retail websites, a 17% YoY increase. That said, this traffic resulted in only 3% of digital sales, leaving room for improvement next year. As far as sales by device, mobile accounted for 46.5% on Thanksgiving and 40% on Black Friday, an increase of 25.3% for the latter. In total, mobile sales generated 39% of all digital sales in November, reaching $39.6 billion.

One of the most surprising metrics from Cyber Week was which retailer enjoyed the greatest growth in online sales. All eyes were on Amazon – the world’s largest e-commerce platform – and Walmart, which has been aggressively ramping up its online marketplace throughout the year. Surprisingly, neither took the number one spot. Dominating YoY growth this Cyber Week was Etsy, the e-commerce platform specializing in handmade items and craft supplies.

CHANNEL KEY TAKEAWAY

Cyber Week 2020 has come and gone, but it will go down in history as one of the most pivotal – and lucrative – shopping events in history. It marks a milestone in the relatively brief history of e-commerce. Much of this is due to COVID-19, which forced both businesses and customers to shift to online platforms. This change in shopping behavior will likely continue even in a post-pandemic world. In a way, the 2020 holiday shopping season served as a test for the role that e-commerce will play in our daily lives moving forward. The record-breaking sales for not just Cyber Week, but all of November, prove that more and more customers feel comfortable shopping online. For brands that embrace this seismic shift in consumer behavior, the future looks bright.

About Channel Key

Channel Key is a full-service channel management marketplace consulting agency that has helped generate $250M in Amazon sales for retail brands around the world. Complete 360-degree services include marketplace strategies, content development, marketing and advertising, catalog management, marketplace and fulfillment setup, ongoing consulting, and much more. To learn about how Channel Key can help increase sales for your business, contact us today for a free consultation.


REFERENCES:

https://www.adobe.com/special/retail-shopping-insights/?cgen=PC1PQLW6&mv=other

https://blog.adobe.com/en/2020/12/01/cyber-week-online-shopping.html#gs.n0c154

https://www.aboutamazon.com/news/retail/supporting-small-saving-big-and-shopping-early

https://trends.edison.tech/research/black-friday-cyber-monday-sales-2020.html

Should Your Brand Sell on Walmart Marketplace?

Should Your Brand Sell on Walmart Marketplace?

To sell on Walmart Marketplace or not – that is the question for many brands that currently sell on Amazon. Describing itself as the world’s largest omnichannel retailer, Walmart’s online platform has expanded considerably in 2020. According to Marketplace Pulse data, more than 25,000 sellers have joined Walmart Marketplace this year, bringing the total to around 60,000. This is only a fraction of Amazon’s 2.5+ million active sellers, but the recent growth spike along with Walmart’s well-established base of more than 265 million customers give Walmart Marketplace the potential to become a strong competitor. Below Channel Key highlights the key similarities and differences between the two platforms to help you decide whether Walmart Marketplace is a good e-commerce channel for your brand.

Walmart Marketplace Overview

Walmart Marketplace is like Amazon in several ways. Sellers undergo an approval process, onboard their listings, choose a fulfillment option, utilize marketplace marketing and advertising programs, and get paid. Within this basic structure, however, there are several key differences. First, qualifying to become a Walmart Marketplace seller can be challenging. While Amazon allows just about anyone to open a digital storefront, Walmart is selective about the brands they choose to sell under its name. Until 2016, Walmart Marketplace was an invitation-only platform. Today, any brand can apply, but they will need to need to demonstrate a history of e-commerce experience on other platforms, reputable customer service, a compelling product assortment, and competitive pricing before being approved.

Walmart Marketplace offers several fulfillment options. Like Amazon’s Fulfilled by Merchant (FBM) program, sellers can opt to self-fulfill orders (upon qualification) through its Seller Center platform. Walmart Marketplace FBM sellers can display the “Free Two-Day Delivery” label on their approved listings, which is a core component to the retailer’s strategy against Amazon. Thanks to the latter, one-day and two-day shipping are now factored into the customer’s purchasing decision.

Walmart seems to acknowledge the new standards set by Amazon. In February of 2020, they introduced Walmart Fulfillment Services (WFS). Like Amazon’s Fulfillment by Amazon (FBA) option, WFS sellers store their inventory at Walmart fulfillment centers. When a customer places an order on Walmart.com, WFS picks, packs, and ships the item(s) on the seller’s behalf. WFS also handles all customer support and returns for these orders. The WFS end-to-end fulfillment experience comes with access to Walmart’s omnichannel capabilities such as its Free & Easy Returns program. Approved items will display the Free Two-Day Delivery and Fulfilled by Walmart tags for increased product visibility and improved conversion. Like FBA, the WFS cost structure includes a fixed monthly storage fee and a fulfillment price that is based on the item weight.

Unlike Amazon, Walmart Marketplace has partnered with a 3rd party fulfillment service to provide sellers with another option. Sellers can choose to fulfill orders through Deliverr, an e-commerce logistics service that integrates directly with Walmart Marketplace and provides pre-approved access to Free Two-Day Delivery.

Walmart+ vs. Amazon Prime

Walmart and Amazon both offer subscription-based services that provide various benefits and perks to members. Launched in 2007, Amazon Prime boasts more than 150 million subscribers and is one of the most popular and appealing features of the Amazon platform. To counter, Walmart launched its own membership service called Walmart+ in September of 2020. Still in its infancy, Walmart+ is designed to provide similar benefits to the retail giant’s loyal base of customers that it has been growing for the past half a century. Below are the basic similarities and differences between the two membership programs.

Key Distinctions Between Walmart Marketplace and Amazon

The primary selling point of joining Walmart Marketplace is gaining access to its established network of locations and customers. In addition to 11,500 brick-and-mortar stores frequented by 265 million customers each year, more than 100 million people visit Walmart.com each month (according to their data). This is about half of Amazon’s monthly search traffic. To compensate for this disadvantage, Walmart emphasizes other key distinctions that may be attractive to sellers:

  • LESS COMPETITION With far less seller competition than Amazon, it can be much easier to stand out, gain brand exposure, build trust and authority, gain new leads, and convert sales on Walmart Marketplace.
  • NO INVENTORY LIMITATIONS Unlike Amazon FBA, there are no SKU minimums or maximums with WFS, so you can list your entire catalog of eligible items on Walmart Marketplace or manage limited inventory with a fixed threshold setting.
  • SIMPLE FEE STRUCTURE Walmart Marketplace provides a simpler fee structure than Amazon. The platform simply deducts a referral fee once a sale occurs (no setup, subscription, or monthly fees).
  • EFFICIENT RETURNS AND CUSTOMER SERVICE Nine out of ten Americans live within 15 minutes of a Walmart store, which makes returns and customer service easy by leveraging the retail giant’s existing capabilities in its brick-and-mortar network.

CHANNEL KEY TAKEAWAY

There is no magic formula to determine whether your brand should sell on Walmart Marketplace. While the platform has been around for more than a decade, it is still in its early stages. From a seller’s point-of-view, this provides both advantages and disadvantages when comparing it to Amazon. With only around 60,000 current sellers, it’s much easier to generate traffic to your listings than a platform with 2.5+ million competitors. On the other hand, its marketing and advertising capabilities are quite limited. Amazon has a much larger collection of consumer shopping data that it has used with the help of advanced technology to develop an increasingly expansive arsenal of tools to help sellers target customers. Regardless, one thing is certain: Walmart is aggressively ramping up efforts to compete with Amazon. Channel Key predicts the rivalry between the two online retailers will further intensify as Walmart explores every opportunity to establish itself as a convenient and valuable e-commerce platform for both sellers and customers.


About Channel Key

Channel Key is a full-service channel management marketplace consulting agency that has helped generate $250M in Amazon sales for retail brands around the world. Complete 360-degree services include marketplace strategies, content development, marketing and advertising, catalog management, marketplace and fulfillment setup, ongoing consulting, and much more. To learn about how Channel Key can help increase sales for your business, contact us today for a free consultation.

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