A typical retail strategy is to go wide–get your product in as many locations as possible and leverage wholesale, big box, distributors, specialty stores, and more. But did you know your winning retail strategy may not work on Amazon?
Following a wide retail strategy on marketplaces means there will be tons of sellers at a price below what you want. So you think, “Well how did so much product and so many sellers get on Amazon anyhow?” With offline seller competition heating up, the brick and mortar retail channels simply want to move product so they become “leaky” and start to offload inventory on online marketplaces like Amazon.
Pattern is the world’s top ecommerce accelerator that helps brands create and execute a narrow distribution strategy on Amazon to regain control of all channels and grow profitability.
Overall, narrow distribution allows for price control. By creating a narrow distribution strategy on Amazon and other marketplaces, you create and monitor adherence to a pricing strategy. A pricing strategy defines how sellers can price, who they can sell to, and how they can deal with extra inventory. It also sets up and allows a brand to enforce MAP Policies.
It also creates seller control. Price erosion starts with wide distribution and a high number of online sellers. So, the first step in stopping price erosion is narrowing your distribution and controlling the number of sellers who list your product online and on marketplaces like Amazon, Walmart, Target, etc. By removing unauthorized sellers you will stay out of the Death Spiral.
Pattern’s proprietary software and technologies can help you narrow your seller list in a more manageable and faster way. With a partner eControl law firm, our process of identifying unauthorized sellers, issuing takedowns, and enforcing MAP policies, gives you back brand control more efficiently than you can do alone.
By limiting the number of sellers, you also regain control of your brand image on marketplaces. Which includes product and brand photos, copy, video, SEO, advertising, reviews, and more. Using only brand-approved assets, all created in the same vision and aligned on message, re-establishes control over the customer experience, which will hold value over time and maintain brand loyalty.
In a narrow distribution model, you control your pricing, sellers, and brand value online and beyond. Together with Pattern’s expertise and technology, you can strategize and execute a narrow distribution model on Amazon so you will be able to take back control on Amazon and accelerate your profitability.
Win with Pattern–contact us today.
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Developing your ecommerce strategy for digital marketplaces like Amazon, Walmart, Tmall, and Alibaba gets complicated fast—there’s a lot to think about, including marketplace SEO, product photography, advertising tactics, disjointed sellers, distribution logistics, managing ratings and reviews, and more. It can be overwhelming for brands, especially those with small teams, to know which behaviors to optimize for for the highest gains in profitability.
The good news? Revenue performance all comes down to data. Pattern was built on a data science approach to ecommerce success. We find the patterns that drive profitability, then apply them to boost our brand partners’ revenue on ecommerce channels.
And a key pattern we follow for all brands on digital marketplaces is the ecommerce equation: revenue = traffic x conversions x price x availability. As brands zero in on these four pieces of the equation, they can simplify and focus their efforts to reach truly profitable ecommerce growth.
The first part of the equation is traffic—you need to get people to see your listings if you want to generate sales. There are two ways to drive traffic to your products: through organic search and paid search. Striking the right balance between both for your brands is crucial to driving enough of the right traffic to your products, ultimately increasing your ecommerce revenue.
Knowing this, Pattern provides the resources and technology needed to drive traffic to your product listings. Our brand management team, advertising specialists, and SEO technicians work in harmony to create a unified strategy to boost your brand’s organic profile and balance that with a paid advertising approach that works for your brand and listings.
Using this method, we took Feetures socks from ranking on longer-tail terms like “no show athletic socks black” to driving traffic on parent keywords like “no show socks.”
Getting customers to your product listing is only half the battle. Once on your listing, you need customers to convert. Conversion is key to the ecommerce equation because it leads to real product purchases and revenue. Traffic without conversion leads to more time and ad spend without the ROI.
Optimizing your images, product description, bulleted details, customer reviews, and buy box performance is key to successful conversion. If you’re going to spend time and effort driving traffic, you should make sure customers can easily and clearly find what they’re looking for when they arrive at your listing.
While your imagery and descriptions are important, you also need to build customer trust to drive conversions. Studies show that your customer service efforts matter too—84% of people trust online reviews as much as friends, making strong reviews an important factor of conversion on marketplaces.
The good news is as you provide a quality product and a great marketplace experience, you’ll build brand equity, increasing your customer loyalty. Then, as your reputation, reviews, and traffic grow positively, marketplace algorithms will recognize your popularity and improve your rank accordingly. Rank drives both traffic and conversions, helping you to optimize your performance further. As your brand equity grows, your conversions will continue to grow with it.
While setting a strategic price is an important step in your ecommerce strategy, it takes more than that to truly control your price on marketplaces.
Without proper control and with wide distribution, your product could end up in the hands of disjointed sellers who lower your marketplace price to sell their inventory and make quick profits. With one seller lowering price online, other authorized sellers and retail partners are forced to lower their price to compete, creating price erosion and sending your brand down the profitability death spiral.
This Death Spiral damages brand equity, hurts conversions, and can lead to Buy Box Suppression on Amazon, hindering traffic as well. And as prices get lower and lower, your profit margin withers away, decreasing your overall revenue.
Using our data-driven insights and Pattern’s eControl partner Vorys, we help brands implement narrow distribution, identify and take-down unauthorized sellers, eliminate price erosion, and control their price online. Focusing on price control, Pattern helped LifeSeasons, a premium supplement company, take back 91% control of the Buy Box on Amazon.
The last piece of the ecommerce equation is availability. It makes sense to think of availability as a contributing factor in conversion, but we felt that it’s important enough to call out on its own—you can fully optimize your traffic, conversion, and price, but without availability, you can’t grow revenue for your brand.
A lack of availability leads to stock outs, losing conversions to competitors, losing possession of the buy box, poor customer reviews, a decrease in traffic…the list goes on. The best-performing brands on ecommerce digital marketplaces optimize their availability with high-end technology, optimize their cash on hand, and inventory time on hand to keep the ecommerce equation powered and optimized in their favor.
Pattern is committed to solving the ecommerce equation. We partner with brands to provide the expertise, resources, and technology needed to drive traffic, create content that converts, protect price, maintain availability, and ultimately accelerate ecommerce revenue and profitable growth.
Interested in improving the results of your ecommerce equation? Schedule a call.
Join us for Ecommerce Innovators, a podcast that brings together the brightest minds in the industry to explore innovative strategies and trends in global ecommerce. We'll analyze what top brands are doing to accelerate their online success and you’ll hear from top executives who are changing the game for their organizations. Our host is John LeBaron, Chief Revenue Officer at Pattern—the premier partner for global ecommerce acceleration.
In our conversation with John Wessel, CTO and SVP of Product & Digital at Fresh Water Systems, he talks about digital transformation, innovation, and growth. Hear about the many hats John’s wears, how the company has transformed since the 90s to stay cutting edge, the pharmacy part of the business, aligning and prioritizing multiple channels, and competing with Amazon.
Content leads to search ranking. For Fresh Water Systems’ ecommerce site, around 70% of their traffic is to the blog. The secret for content is “well-researched, well-written, long form content that is informative”. John explained that they have an SEO team who writes 5000+ word posts that are researched and documented. People read these blogs and comment, which drives more traffic to the blogs.
Ecommerce is changing the shopping game. John shared an interesting story about a plumber who orders parts every Friday night online, from wherever he can get the best price. He doesn’t have relationships with one supplier or an auto-renew subscription for his parts. Instead, he finds the best price just for the parts he needs every week. John thinks the trend of price shopping will continue, especially as ecommerce grows.
Invest in customer engagement, but don’t invest a lot of time into emails. How many advertising emails do you actually read? Companies often spend a lot of time doing A/B tests and crafting the “perfect” email. However, John pointed out that almost no one reads emails anymore. Instead, invest your time into different brand touchpoints you will have with your customer. You can still send emails, but make sure you dedicate less time to the process.
Listen to the full episode for free on Apple Podcasts, Spotify, or wherever you get your podcasts.