Archive for January, 2021

Why Your DTC Brand Should Sell on Amazon

Why Your DTC Brand Should Sell on Amazon

Over the past few years, DTC brands have increasingly found Amazon to be a powerful channel for additional sales. Despite this, many are still hesitant to join the world’s largest online shopping platform due to a misunderstanding about how Amazon can benefit businesses that sell direct-to-consumer.

Today, Amazon is much more than an e-commerce marketplace. It has become the most popular platform for customers to discover new brands. According to reports, 66% of consumers begin their online shopping search on Amazon. With COVID-19 boosting e-commerce to record levels, Amazon has become an effective way for DTC brands to reach new customers. For example, the retail giant now offers an entire suite of tools designed specifically to help brand owners grow their audience base, including:

  • New to Brand Metrics
    New-to-brand metrics determine whether an ad-attributed purchase was made by an existing customer or one buying a brand’s product on Amazon for the first time over the prior year.
  • Brand Stores
    Stores allow you to showcase your brand and products in a multipage, immersive shopping experience on Amazon.
  • A+ Content
    A+ Content enables brand owners to describe their product features in a different way by including a unique brand story, enhanced images, and text placements.
  • Sponsored Brand Ads
    Sponsored Brands are cost-per-click (CPC) ads that feature your brand logo, a custom headline, and multiple products.
  • Amazon Posts (beta)
    Amazon Posts help drive brand and product discovery with curated posts that mimic the social media experience.

As a proven channel management agency that has helped generate more than $250 million in e-commerce sales, Channel Key works every day with DTC brands that want to increase sales. While most understand the popularity of the Amazon platform, many want to know the specific ways that Amazon can benefit their brand without cannibalizing sales from their own website. This is a perfectly fair question. After all, the goal is to grow your business. For this reason, Channel Key has compiled the top three advantages to selling on Amazon for DTC brands.

1. Your Customers Are Shopping on Amazon Right Now

More than one out of three Americans are Amazon Prime members. These 126 million shoppers each pay $119/year for their membership. To get their money’s worth, they shop – a lot. Prime members spend on average over $1,000 each year. Not only that, but Prime members are also loyal. According to Forbes, 89% of consumers are more likely to buy from Amazon than anywhere else, including the most popular DTC brand websites in the world. At this very moment, Prime members are searching for products like yours who will purchase an item by the time you’re done reading this email. Put simply, selling on Amazon will help your DTC brand reach more customers.

2. An Amazon Brand Store Can Boost Sales on Your Website

As noted above, more than half of all product searches begin on Amazon. Even more important, about 95% of customers read reviews before making a purchase. This means shoppers are using Amazon to learn more about products they are interested in purchasing both on and off the platform. Building an Amazon presence for your DTC brand that includes positive reviews can influence customers who are in the research stage of their shopping journey. In short, positive reviews on your Amazon product pages can boost sales on your other channels, including your website.

3. Selling on Amazon Can Lower Your Customer Acquisition Cost

DTC website traffic often comes from paid marketing efforts on Google and social media channels. These campaigns target customers at each stage of the shopping journey. Amazon customers, on the other hand, are much closer to the bottom of the sales funnel. Therefore, your paid campaigns on Amazon will reach customers who are ready to make a purchase. In addition, since Amazon is essentially a massive search engine for shoppers, your brand store will benefit from organic traffic as well, which doesn’t cost you anything. All of this contributes to lower customer acquisition costs.

CHANNEL KEY TAKEAWAY

The number one reason why DTC brands should consider selling on Amazon is because more than 200 million people shop there each month. Not only that, but many customers prefer Amazon. According to the 2020 report from digital commerce platform Scalefast and research firm YouGov, 43% of shoppers would choose Amazon over a DTC website because of the cheaper and/or free shipping options, while 33% would choose Amazon because of Prime membership perks. Instead of viewing Amazon as competition, DTC brands should consider the retail giant as a partner who can help them reach a vastly greater audience. This doesn’t just apply to start-up or small- and medium-sized companies. Powerhouse brands like Apple and Adidas have shifted their focus to DTC sales and currently operate thriving stores on Amazon. Even with an established and loyal base of customers, they understand that the largest e-commerce marketplace in the world can help them reach an even wider audience of shoppers.

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 Posts: A “Free” Way to Generate More Traffic to Your Product Listings

Amazon Posts: A “Free” Way to Generate More Traffic to Your Product Listings

Driving traffic to your Amazon product pages is essential to converting sales. Customers need to find your products before they can add them to their cart. One of the most effective means to generate traffic is through Amazon’s various advertising solutions, but this isn’t the only way. Amazon Posts is a relatively new program designed to help drive brand and product discovery with curated posts that mimic the social media experience.

Currently in beta, Posts delivers your brand story to relevant customers as they browse your categories on Amazon. Shoppers can discover product pages directly from your brand’s feed and click through your Posts to explore your listings. Posts appear on the Amazon app (iOS and Android) and on mobile web via your brand’s feed, on detail pages, in feeds for related products, and in category-based feeds. Unlike Amazon Advertising, Posts are completely free to run. When used correctly, Posts can be a powerful way to:

  • Share inspiring brand content
    Posts help your brand reach in-market shoppers with imagery that highlights your brand story and values to inspire them to browse your content
  • Educate and drive product discovery
    Posts help educate shoppers about different ways to use your products and encourage them to discover more of your offerings
  • Promote brand consistency
    Post help you maintain a consistent brand presence on Amazon by focusing on products, lifestyle content, and your brand’s message

As of January 2021, Posts are available for U.S. sellers who are enrolled in Amazon Brand Registry, vendors, and agencies representing vendors. Brands don’t need to advertise on Amazon to begin using Posts, but you must sell products on Amazon. Amazon DSP customers can also create Posts, but must have an advertising console account in addition to their Amazon DSP account.

In addition to being free, there’s no limit to how often brands can post. In fact, to drive discovery and consideration among relevant audiences, Amazon recommends adding to your content as often as you post on platforms like Facebook and Instagram. One of the easiest and quickest ways to get started with Posts is to repurpose imagery that your brand has previously shared on social media. Creating a post requires just three simple steps (remember – you must first be enrolled in Brand Registry):

  1. Visit posts.amazon.com and sign in using your advertising console or Seller Central credentials
  2. Create your profile by verifying your brand name and uploading your brand’s logo
  3. Start creating posts by uploading images, writing captions, and tagging related products

One of the most appealing aspects of Posts is that they are fully automated. There’s no need to specify where your Posts will be displayed. Amazon will automatically place them in feeds and on detail pages based on relevance and customer engagement.

Like Amazon Advertising, it’s important to review the performance of your Posts to evaluate how well they are working. You will likely find that certain types of images and headlines trigger better engagement than others. This information will help you create more effective Posts over time that will drive more traffic to your product pages.

Amazon provides data for impressions, engagement, clicks to product pages, and engagement rates for each of your Posts. Currently, Amazon doesn’t show sales conversion data for Posts, but this metric may become available after beta testing is complete. To give you a better understanding of what kind of results Posts can yield, we’ve compiled the 60-day performance data from two campaigns for Channel Key clients in two categories.

 Amazon Posts Results for Apparel Brand


Amazon Posts Results for Lawn and Garden Brand

 CHANNEL KEY TAKEAWAY

In our recently released Top Ten E-Commerce Marketplace Predictions for 2021, Channel Key outlines how social media is becoming a more important tool for not only promoting brand awareness, but also converting digital sales. As the most powerful and popular online shopping platform, Amazon leads the world in e-commerce innovation. Posts is a recent change by the retail giant to incorporate elements of social media into the Amazon shopping experience – with more likely to come. It’s important to note that Posts should not be considered an alternative to paid advertising, which is an essential component to a successful Amazon business. Also, Posts are not entirely free. While it won’t cost you anything to run Posts, you will need to spend time building, analyzing, optimizing, and improving them just as you would a paid campaign. That said, when used effectively, Posts can complement your existing marketing strategies by driving more traffic to your product pages, which is the key to higher sales.

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.

Top Ten E-Commerce Marketplace Predictions for 2021

Top Ten E-Commerce Marketplace Predictions for 2021

The year that changed retail – that’s likely how 2020 will be remembered in the business world. A lot happened, both good and bad. All are in one way or another tied to the most important event of the year: COVID-19. The pandemic impacted just about every aspect of daily life. Healthcare, education, entertainment, and social engagement all look very different today than they did just 12 months ago. Fortunately, each of these is likely to return to at least somewhat normal conditions once COVID-19 is officially behind us. One thing that has changed for good, however, is retail. Over the course of the past year, customers have adopted new ways of shopping, and brands have been forced to change with them to remain competitive. This shift in global commerce is not a one-time event. It’s taking place at this very moment and will continue well into the future. To help brands stay ahead of the curve, Channel Key has compiled the Top Ten E-Commerce Marketplace Predictions for 2021. 

1. Online Shopping Will Become the New Normal

It’s no secret that e-commerce has been on the rise for years, but COVID-19 has further accelerated the shift to online shopping. Stay-at-home mandates, in-store capacity restrictions, and fear of contagion have led to widespread adoption of e-commerce marketplaces like Amazon and Walmart. A recent report by consulting firm McKinsey & Company concluded that a decade of e-commerce adoption was compressed into three months during the pandemic. By all accounts, this trajectory will continue. According to eMarketer, online sales in the U.S. will top $765 billion by the end of 2021. With this kind of growth, brands need to prioritize their digital marketplace strategies to capture the increasing purchasing power of online shoppers.

2. Walmart Marketplace Will Expand Services for Sellers

In 2019, Amazon surpassed Walmart as the world’s largest and most valuable retailer. Since then, Walmart has seemingly acknowledged that online shopping is the future, and has taken aggressive steps to compete in the digital shopping arena. Describing itself as the world’s largest omnichannel retailer, Walmart’s online platform expanded considerably in 2020. According to Marketplace Pulse data, more than 25,000 sellers joined Walmart Marketplace last 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. Channel Key predicts Walmart will continue this e-commerce momentum by expanding services for sellers in 2021. 

3. Online Grocery Shopping Will Continue to Grow

COVID-19 has changed the way many people shop, and that includes groceries. Data from Inmar Intelligence shows that nearly eight out of ten consumers purchased groceries online during the pandemic, a 19% boost from 2019. Mercatus reports that online grocery sales in the U.S. increased from $1.2 billion in August 2019 to $7.2 billion in June 2020. With this surge in supermarket e-commerce, retailers are competing to capture online grocery sales. Amazon, Walmart, Kroger, and Target all introduced new online grocery shopping services in 2020 – and they keep getting more innovative. Smart technology has paved the way for retailers to revolutionize the grocery shopping experience with exciting tools like artificial intelligence and augmented reality. Last year saw a lot of change in how people bring food into their homes, but there’s much more to come in 2021.

4. Same-Day Shipping Will Have Greater Influence

One of the greatest improvements of the online shopping experience in recent years is speedy delivery. Thanks to Amazon, same-day and next-day shipping are now factored into the customer’s purchasing decision. Amazon recently purchased 11 Boeing 767-300 aircraft to expand its logistics operations – a sign that the demand for quicker delivery is growing. Other e-commerce platforms are adapting to this trend. Walmart now offers free next-day and two-day shipping for many items on its digital marketplace. Channel Key predicts that Amazon will continue to raise the shipping standard by making it easier for customers to receive same-day shipping, which will force other online retailers to follow suit by placing a greater emphasis on fulfillment logistics.

5. Innovative Marketing Tools Will Become More Impactful

Technology is the foundation of e-commerce. Selling successfully on digital marketplaces requires a forward-thinking mindset and a willingness to adapt to innovations. As the largest e-commerce platform in the world, Amazon leads the digital commerce experience by continually introducing and improving advanced tools like voice-controlled shopping, predictive analytics, merchandising robots, and anticipatory shipping. These innovations improve not only the customer shopping experience, but also the way brands reach their target audiences. Channel Key predicts advanced technologies like artificial intelligence, augmented reality, and programmatic advertising will continue to revolutionize e-commerce for both customers and brands in 2021.

6. Mobile Shopping Will Grow Significantly

Gone are the days when online shopping took place entirely on desktops and laptops. Now customers are increasingly using their phones to purchase products. According to Adobe Analytics, mobile accounted for 46.5% of all online sales during Thanksgiving and 40% during Black Friday, an increase of 25.3% for the latter. In total, mobile sales generated 39% of all digital sales last November, reaching $39.6 billion. This trend is due not just to COVID-19, but technology advances as well. Contactless payment systems, mobile wallets, and mobile POS technology have made it much easier for customers to shop with their phones and tablets. Statista forecasts that by the end of 2021, 72.9% of all retail e-commerce sales will be generated via mobile shopping.

7. Amazon Will Expand into New Industries

In late 2020, Amazon 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 an Amazon App. The pharmacy industry is just one of many that Amazon has disrupted over the past decade. According to Digital Commerce 360, Amazon is currently considering entering the construction industry. Based on Amazon’s history of rapid growth, along with its massive infrastructure and customer base, Channel Key predicts the e-commerce giant will continue to expand into new industries in 2021.

8. Social Media Will Play a Larger Role in Digital Sales

Social media is no longer just for keeping in touch with friends. It’s become a powerful marketing tool for brands to target and convert customers. Buy buttons are now integrated into Facebook and Instagram, which can be easily leveraged with marketing campaigns built within the platforms. With the spike in e-commerce during COVID-19, it’s no surprise that social media commerce has risen along with it. According to Pew Research Center, 72% of all Americans use some type of social media. Adobe Analytics reported that platforms like Facebook and Instagram drove one out of ten visits to retail websites during Cyber Week 2020, a 17% YoY increase from 2019. Channel Key predicts social media will continue to play a more important role in how brands reach customers in 2021.

9. Reviews Will Matter More to Customers

Product reviews are becoming more important to a customer’s purchasing decision than brand influence, according to a recent report by Forbes. Spiegel Research Center found that about 95% of customers read reviews before making a purchase. In fact, upon visiting a product page, many customers will skip immediately to the first few reviews to determine whether they should read more. This allows smaller brands an opportunity to compete with more established brands by leveraging the power of positive reviews. Channel Key predicts that product ratings and reviews will continue to matter more to customers and become a greater factor in conversion rates.

10. The Holiday Shopping Season Will Start in October

Black Friday traditionally begins the day following Thanksgiving and is considered the kickoff to the holiday shopping season. Neither was the case in 2020. Amazon Prime Day took place in October, generating more than $10 billion and effectively jump-starting holiday shopping. Amazon continued this momentum by offering Black Friday-esque sales through most of November. Other major retailers followed suit by not only launching holiday sales much earlier, but by shifting many of them online – and it worked. According to reports, online holiday sales jumped nearly 50% in 2020 compared to 2019. Amazon reported that the recent holiday shopping season was its most successful to date, with 71,000 small- and medium-sized businesses worldwide surpassing $100,000 in sales. Regardless of how COVID-19 impacts life this year or when Amazon Prime Day takes place, Channel Key predicts that October will be the official start of the holiday shopping season moving forward.

CHANNEL KEY TAKEAWAY

There’s no denying that COVID-19 was the most influential event of 2020. While the immediate and short-term effects of the pandemic are evident in the way our everyday lives have changed, its long-term effects are still unknown. That said, troubling times can lead to positive change. The great business magnate Henry Ford once said, “When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.” It’s with this optimism that Channel Key forecasts a bright year for e-commerce. People are changing the way they shop in virtually every way imaginable. Embracing these shifts in customer behavior is the key to unlocking powerful business momentum for your brand in 2021.

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

https://modernretail.co.uk/the-future-of-ecommerce-9-trends-to-watch-out-for-in-2021/

https://www.forbes.com/sites/theyec/2021/01/04/whats-next-for-amazon-11-predictions-for-2021/?sh=3734b51e1298

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://financesonline.com/ecommerce-trends/

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