The Hidden Causes, & Costs, of Brand Erosion on Ecommerce

Josh Mendenhall

December 9, 2020

Picture this: Your company has curated the perfect design, typography, image stack, and copy to portray your brand to your ideal consumers on ecommerce. You’ve dedicated time, money, and resources to testing your product to make sure it’s high-quality and reliable.

But once you start selling your product to third-party distributors, it’s clear they don’t care about your brand nearly as much as you do. They use subpar photos, sell your product for prices under MAP, and even start selling counterfeit products under your brand’s name. Suddenly, the consumer trust you worked so hard to establish is destroyed and extremely difficult to rebuild.

Sound familiar? Unfortunately, this situation—called brand erosion—is common in ecommerce. If consumer trust is important to you, preventing brand erosion should be one of your top priorities. Here, we’ll discuss what causes brand erosion, its consequences, and what you can do to prevent it.

What is brand erosion?

Before we can talk about brand erosion, we need to be clear on the definition of a brand. A brand isn’t a logo, it isn’t typography, it’s not even the tone in your copy—it’s how consumers perceive your company or product.

Everything your company does factors into this perception, for better or for worse. How your product is marketed, your product listings, your creative strategy, your customer service, and, of course, the quality of the product itself all contribute to how consumers see you. Building a brand, especially one with a positive perception among consumers, takes significant time, effort, and money.

But unless you have a person or team carefully and consistently monitoring how your brand is perceived, it can be easy for this carefully-crafted perception to be eroded by negative consumer experiences and unmet expectations. Brand erosion is the decline in your product’s brand perception in the eyes of consumers.

3 causes of brand erosion

In some cases, brand erosion starts with third-party distributors, many of whom aren’t necessarily invested in maintaining the brand you’ve worked so hard to form. These distributors may be more concerned with selling as much product as possible, sometimes while sacrificing your brand in the process.

1. Price erosion

Price erosion is one form of brand erosion. Third-party distributors start to lower product prices to win the Buy Box, and in response, brands make price concessions over and over to match their sellers’ low prices. This race to the bottom decreases margins for both your company and your sellers, and lower prices devalue your product.

Let’s take, for example, Pattern partner PopSockets, which sells pop-up grips for cell phones. PopSockets sells its own products and also sells them to third-party sellers. If the third-party distributors lower the prices on their PopSockets, PopSockets must lower its prices in response in order to win the Buy Box, and the cheaper prices start to devalue the brand.

Popsockets Listing Brand Equity Example | Pattern

2. Mixed creative strategy

Discrepancies in creative strategy can also lead to brand erosion. Inconsistent design and poor quality photography can make a brand seem sloppy, inconsistent, and untrustworthy. Partners and distributors who don’t understand the importance of maintaining the brand may just shoot photography as quickly as possible without taking care to be consistent with brand photography.

Photographs with poor lighting, low-quality cameras, and unprofessional framing immediately discredit your brand. When the internet is filled with inconsistent photography of your product, the perception of the brand could be inconsistent—and that’s not a value that any brand wants. To learn more about how product photography affects your brand’s image, click here to read our Ecommerce Product Photography Guide to Storytelling Success.

POPSOCKETS

Going back to the previous example, PopSockets’ style guide states that product photographs shouldn’t be taken with two fingers on each side of the grip, but with one finger above the grip and the rest of the fingers below it. Jewelry brand Pandora states that images should show a model’s lips, but not her eyes or much of her nose. Inconsistency in small details like these, which can easily be missed when distributors aren’t focused on maintaining brand integrity, can have negative consequences on your brand’s perception.

3. Unauthorized sellers

Unauthorized sellers can also lead to brand erosion. These distributors may sell your products for ridiculously low prices, completely disregard your style guide, and possibly even sell a counterfeit, low-quality product under your brand’s name. When unauthorized sellers cut your prices and authorized sellers are forced to do the same to compete, Amazon will protect its own margin—which may mean reducing your product’s visibility and, eventually, dropping it altogether.

In the case of counterfeit products, which, along with pirated goods, amount to as much as 3.3% of world trade, your brand’s reputation can be seriously tarnished by sellers who sell low-quality products with your brand’s name on them.

And we know this could never be the case with _your _brand, but some brands cause their own erosion issues because of a lack of internal communication, inconsistent creative elements, weak or rarely-enforced style guides, or the lack of Minimum Advertised Price, or MAP, policies.

What are the other consequences of brand erosion?

We’ve already discussed quite a few of the overarching consequences of brand erosion, including price erosion, consumer distrust, and overall brand inconsistency. But the issues don’t stop there.

As you’re well aware, consumers rarely keep their negative experiences to themselves. Even just one consumer receiving a counterfeit product could cause a ripple effect if they leave a scathing review.

Many negative reviews over time lead to further brand erosion and distrust, less traffic on your product listings, and, ultimately, less conversion, as 85% of customers trust reviews as much as a personal recommendation. Selling or supplying counterfeit products could lead Amazon to suspend or terminate your account, withhold funds, destroy inventory in their fulfillment centers, and impose legal consequences.

Brand erosion is also synonymous with a decline in brand equity, or the perceived worth of a brand—the combination of customer opinion of a brand, their experiences with it, and the products’ value. Without brand equity, your brand loses customer trust and loyalty and the ability to charge more for your products.

It’s extremely challenging to rebuild your brand after it’s been significantly eroded. It takes a lot of dedication, persistence, and consistency to restore a tarnished reputation and lost trust, especially when there are likely countless alternatives to your product available online.

OK, I get it—brand erosion is bad. How can I prevent it?

Since there are several potential causes of brand erosion, there are also many different avenues you need to take to prevent it.

Strong, enforced brand guidelines can also help prevent brand erosion caused by inconsistency. These guidelines may come in the form of a style, photo, or copywriting guide. Before you can implement guidelines, you need to determine your brand’s identity. To help your consumers understand this identity, implement consistent marketing, consistent creative strategy, and consistent copy.

Implementing and enforcing a MAP policy can prevent price erosion and the resulting brand erosion. Joining the Amazon Brand Registry can provide you with support from Amazon and access to the Amazon Buy Box to combat price erosion, and registering your brand with Amazon keeps other sellers from selling your products without your permission.

The most important factor in preventing brand erosion may be to only work with partners who understand the value of your brand and know how to maintain it. At Pattern, one of our core values is that we’re partner obsessed—we’ll do whatever it takes to do what’s right for our partners. When you work with us, we’ll help you both build your brand and maintain it, combat price erosion, eliminate unauthorized sellers, and so much more. Use the contact form below to schedule a free consultation with Pattern’s brand experts.

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Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 26, 2022

Top 5 Ways to Prepare for Peak with Google Ads

Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.

1. Go Early

In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.

From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.

2. Get Ready for Privacy Changes

 According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.

From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.

It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.

3. Ensure Consumers Can Discover your Brand

A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.

Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.

The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)

4. Get Moving with Performance Max

Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.

Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.

5. Flight Budgets Accordingly

Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.

Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.

Sept 20, 2022

4 Ecommerce Marketplace Consultant Must-Haves

Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces. 

Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.

So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.

Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products. 

What is an Ecommerce Consultant?

An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.

An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.

Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.

1. Brand Obsession/Specialization/Passion

At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services. 

2. Proven Results

It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.

3. Wide Range of Marketplace Expertise

It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.

4. Network of Resources

The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.

Achieve Your Ecommerce Goals With Pattern

Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces. 

With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.

Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.