The Amazon effect: how smaller brands can harness and mirror Amazon’s success

Amazon ecommerce

With no let-up in Amazon’s run of impressive results, how can other businesses buy in to or look to replicate it’s success asks Sam Counterman, Director of Marketing, Northern Europe & Global Digital Lead at Selligent

Despite a year full of challenges, Amazon’s recent third-quarter results show profits tripled and a 37% increase in earnings.

Amazon has an estimated 38% share of the US e-commerce market, and more product searches start on Amazon than on any other search engine. 

What does this mean for other retailers?

Assessing the pros and cons of selling with Amazon has never been more important. How can brands best navigate a world of commerce giants?

Do they use Amazon to sell their products (knowing they will have to play by Amazon’s rules) or get set to up their game?

The data dilemma

Selling on Amazon means giving away access to customer data that can be integral to personalisation, customer service, product development and so much more.

With data streams diverted to Amazon, relationship marketers find themselves on the sidelines. Their customers are increasingly becoming ‘indirect customers’ whose buying habits exist behind a veil of mystery.

But brands are still under pressure to serve personalised customer experiences and consumer-first marketing, no matter where their customers choose to make their purchases.

Read more: The latest eCommerce news

What can brands do?

It is critical that brands focus on developing direct relationships with customers however they buy. Start by integrating the data you have, building out mailing lists, speaking directly to your customers and using events and giveaways to nurture these relationships.

Social media and other owned channels are a goldmine – they can foster relationships and serve up entertaining, inspirational and educational content. Critically they also feed into social listening – allowing brands to truly understand and cater to what their customers want and need. This is particularly useful as COVID restrictions continue to change and influence the way we shop and interact with brands.

Amazon wins on transactional areas

Owned properties are more fun and offer far more storytelling power than a standardised Amazon product page. With that in mind, while Amazon corners half of the e-commerce market, the main drivers are more transactional than emotional in nature: customers mostly choose Amazon because of free shipping (70%), price (65%), and two-day or next-day shipping (60%) according to Epsilon. Ultimately, an unforgettable customer experience is hard to ship in a cardboard box.

What can brands do?

This leaves a major opportunity for brands to dazzle consumers with engaging stories on their owned platforms. And then use the opportunity to ask for actionable data points in honest, transparent language – perhaps while throwing in a few freebies because data is currency these days.

Personalisation = profit

Amazon is very good at leveraging data into targeted marketing and building out their own, rich consumer profiles. Behind the scenes, Amazon’s online ecosystem not only captures data, it also puts owned customer data to work as a major part of its business model. Using advanced AI functionality, Amazon creates more than 35 percent of its total revenues with personalised shopping recommendations.

What can brands do?

Marketers should take this fact as inspiration rather than discouragement. Because first of all, the AI-powered tech that helps Amazon know exactly which item customers want to purchase next is becoming accessible to all brands, for instance through the Selligent Cortex engine. And second, with the right marketing software, marketers can create some degree of marketing personalisation from very little data, even for anonymous website visitors.

But in order to drive relevant, consumer-first marketing, marketers really need to obtain as much data as possible about their indirect consumers. Even if purchases happen elsewhere, your owned customer data is your most valuable resource in staying close to your customers in the future.

Retailers could start to reframe the relationship from David and Goliath to using Amazon as a trojan horse for building a relationship with customers. Rather than trying to beat Amazon at its own game (which looks unlikely), smaller retailers could consider using it to sell and then ensure they find a way to get customers directly into their own CRM post purchase. This could be via direct promo codes on the box or discount coupons inside – critically to be redeemed on the retailers own website, not via Amazon.

For customers, it’s win-win – an easy, quick and known first-time experience, followed by a discount on a subsequent purchase. And for retailers, repeat custom and data that can be used for personalised offers in the future. The future belongs to brands who can build meaningful relationships with their consumers based on trust and relevance.

Sam Counterman

Director of Marketing, Northern Europe & Global Digital Lead at Selligent

Ab Initio partners with BT Group to deliver big data

Luke Conrad • 24th October 2022

AI is becoming an increasingly important element of the digital transformation of many businesses. As well as introducing new opportunities, it also poses a number of challenges for IT teams and the data teams supporting them. Ab Initio has announced a partnership with BT Group to implement its big data management solutions on BT’s internal...

WAICF – Dive into AI visiting one of the most...

Delia Salinas • 10th March 2022

Every year Cannes held an international technological event called World Artificial Intelligence Cannes Festival, better known by its acronym WAICF. One of the most luxurious cities around the world, located on the French Riviera and host of the annual Cannes Film Festival, Midem, and Cannes Lions International Festival of Creativity. 

Bouncing back from a natural disaster with resilience

Amber Donovan-Stevens • 16th December 2021

In the last decade, we’ve seen some of the most extreme weather events since records began, all driven by our human impact on the plant. Businesses are rapidly trying to implement new green policies to do their part, but climate change has also forced businesses to adapt and redefine their disaster recovery approach. Curtis Preston,...