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.

Explore Our Ecommerce Resource Library

Find relevant content to accelerate your ecommerce business. Stay on top of industry trends and best practices.

Global Ecommerce Weekly News: 27th September 2022
Blog

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/)

How an Amazon SEO Agency Should Be Serving Your Brand
Blog

How an Amazon SEO Agency Should Be Serving Your Brand

If you’re in the global ecommerce space, you are most likely aware of Amazon, and probably selling your products on the marketplace. With over $470 billion in sales in 2021 alone, Amazon stands as the third largest company in the world based on revenue. The ecommerce giant is a household name in the U.S. and working hard to grow its market share across five continents worldwide.

Having your products available on Amazon and being competitive there, though, are definitely two different things. If you want to really succeed on Amazon, you’ll need specialized insight into how Amazon works and how to make it work for you. So, for many brands, it’s a great idea to work with an Amazon Search Engine Optimization (SEO) agency.

At Pattern, Amazon SEO optimization service is one of our key competencies. We understand that technology, data-driven insights and expertise  are the most important tools brands can leverage to win top listing spots on digital marketplaces. With expert teams and years of experience, we help brands conquer the Profitability Death Spiral as they compete with other products and sellers online. We offer Amazon SEO agency services as a core solution to brands that need more resources to get ahead. 

What is an Amazon SEO Agency?

An Amazon SEO agency serves brands by improving their products’ rank and listing performance on Amazon. They make strategic decisions about ad spending and placement that lead to higher traffic, conversions, and revenue for ecommerce brands.

A great Amazon SEO Agency partner will:

Prioritize Your Success

Unfortunately, many Amazon SEO agencies profit in unfair ways from your brands’ perceived success based on the ROAS numbers they provide. This is done through including branded search terms in ROAS reports, which naturally skew listing performance

Let’s say, for instance, your brand is called “Annie’s” and you sell lollipops. Your brand has a very high likelihood of winning the top listing spots on Amazon for lollipop search terms that are paired with “Annie’s,” your brand name. So, SEO agencies will spend your ad money on those terms and report a very high ROAS. 

To avoid scenarios like these, it’s best to look for an agency that either calculates their profits on metrics other than your ROAS scores or weighs branded search terms differently in the performance metrics reports. Regardless of your Amazon SEO agency’s cost structure, you should align onbranded search terms before committing to a scope of work.

Provide Detailed Competitive Insight

A great indicator of a high-quality Amazon SEO agency is the level of insight they can provide into your competitors’ listing positioning and how it compares to yours. Data fanaticism is so important at Pattern that we’ve developed proprietary technology to display this exact information with precise detail for every brand we work with. In fact, you can find our free version here to see how you compare to some of your top competitors based on ASIN.

It’s certainly possible to improve your Amazon search performance with blind spending strategies. But a truly great solution will help you to know where your dollars are at their most powerful and competitive.

Reduce Your Ad Spend Over Time

Amazon’s A10 algorithm prioritizes customer satisfaction—it wants to show consumers the best products that align with their search intent to improve conversions and sales. So, the best way to gain momentum on Amazon is to work on incremental wins. 

Improving your performance on more obscure search terms that align with your customers’ search intent is a great way to increase ROAS for the long term. A10 will reward your success with better rankings on higher-volume search terms and the virtuous cycle can help you conquer your most-coveted listing spots. And the best part? This process of gaining momentum, if done right, will naturally decrease your ad spend over time as Amazon recognizes your value and works with you to keep your products at the top of consumers’ search results.

Amazon SEO Optimization and More

As an Amazon SEO specialist, Pattern knows how to help your brand win better success for long-term profitability on Amazon. With our data-driven tools and brilliant teams of ecommerce experts, we help brands with listing management, content optimization, Amazon ad strategies, and more.

Contact us to learn more about our SEO optimization services.

Global Ecommerce: Weekly News (20th September 2022)
Blog

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)