It was recently reported that sales on marketplaces including Tmall, Amazon and eBay accounted for approximately 62% of all global online retail sales. However, launching your brand on marketplaces isn’t always about driving profitable growth, there are many other reasons why brands should be selling on marketplaces.
Below we share the ways in which we help brands to maximise the value of a marketplace channel, backed up by key results from our 2021 UK Shopper Report.
It’s no secret that marketplaces attract significant traffic and have high visitor engagement, thanks to their fast delivery propositions, broad choice of products available and competitive prices. Marketplaces such as Amazon have become an increasingly important route to market for brands who wish to acquire new customer groups.
Results from our recent consumer polling survey provides further evidence of the claim that Amazon is a starting point for shopping journeys, and that customers use it as a shopping search engine. 55% of UK shoppers visited Amazon to check the prices of products, and 49% claimed to have visited the site to look for product information, including product reviews. A further 34% said they bought from the marketplace because they have an Amazon Prime subscription.
Marketplaces have become a product discovery hub for many online shoppers - as well as a place for loyal customers to repurchase their favourite items - creating a platform to build your brand awareness. Amazon’s push into a broader range of product categories, and its focus on a wide selection within those categories, has led to the marketplace becoming a key facilitator of product discovery.
For some brands, selling on marketplaces such as Amazon requires a strategic approach to avoid missing out on incremental revenue and a loss of market share in your category. We often recommend that brands seek to build on a defence strategy via marketplaces.
Having no presence on Amazon or Tmall can mean you will lose out to key competitors for customers who only want to buy from the marketplace. Amazon's Prime subscription in particular means that it is the first - and even only choice - for some shoppers when they are making a purchase, and so if your brand isn't available they'll purchase an alternative product that can be delivered for free within 24 hours.
In addition, if you don’t have a strategy to sell your brand on marketplaces, it leaves a space for unauthorised resellers of your products to fill the gap and respond to demand, which can lead to negative perceptions of your brand if those sellers don't properly represent what you stand for.
Cross-border online sales have grown significantly in recent years and allows your products to be readily available in markets that previously might have required a localisation strategy, so it’s no wonder that many brands see selling on marketplaces as a shortcut to internationalisation.
Most of Amazon’s sites receive more monthly unique visitors than these countries have citizens. This is because they will also receive visits from shoppers in markets where there is no local instance of Amazon, or where product accessibility is lacking.
30% of shoppers in the UK that we surveyed in February, expect to spend more on Amazon in the next year, while only 12% will spend less. This backs up our assertion that the gains Amazon made during 2020 will not be lost when lockdown ends. Shoppers who have been impressed with the convenience and range it offers plan to carry on spending on the marketplace. Ensuring your brand is present on marketplaces so you don’t miss out on ecommerce growth is crucial to drive revenue.
In 2021, online marketplaces will be seeking to continue their growth by adding new customers, as well as selling more to those they have already converted to online customers. The strength of Amazon and the other international marketplaces such as Tmall means that every consumer product business needs a marketplace strategy. Whether you are thinking about selling on marketplaces in domestic or international markets, our checklist can help to determine if your brand is ready to launch on international marketplaces.
For appropriate brands, we can buy your stock and become your authorised Amazon seller, taking care of every aspect of the listings and marketing of your products, customer service and logistics. For brands who wish to sell directly to Amazon we can also support with the operation of your Amazon Vendor account, either providing expert interim staff or through a service model.
To talk to us about how we can help grow your online sales, protect your brand, or develop your marketplace strategy please contact us here.
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A top issue we see with brands struggling on ecommerce marketplaces is a loss of brand control due to disjointed sellers—those that aren't following your brand policies and guidelines when selling your products online. Disjointed sellers can be gray market, unauthorized, and rogue sellers, as well as 3P and other sellers that are noncompliant with your branding, pricing, and other forms of representation online.
It can be very easy for brands to lose control of their ecommerce strategy when they can’t get a handle on disjointed sellers. Typically, these brands are either stuck in a game of whack-a-mole or just ignoring the warning signs of bigger issues and hoping for the best. But, when disjointed selling isn't handled right, the consequences can be devastating to profitability. A loss of brand control doesn’t happen overnight, and the factors that contribute to it are long-standing.
Before the advent of ecommerce, brands favored a wide distribution. It was the easiest way to get products to as many distributors as possible. But wide distribution, when left unchecked, leads to leaky distribution—allowing your excess products to end up in the hands of unwanted sellers.
So brands that continue to operate with a wide distribution strategy are losing brand control and are damaging their brand equity and product performance. Why? You’re unable to monitor your products’ pricing, performance, or quality. You can’t dictate how you’re represented by each seller, creating an inconsistent and false representation of your brand to your new and existing consumers. These issues often lead to poor reviews and erode opportunities to build trust with future customers.
In today’s ecommerce landscape, marketplaces and digital platforms connect people and sellers to make online shopping simple and seamless. They also provide customers complete price transparency. Google, for instance, allows consumers to access any of your products on virtually every ecommerce channel and retail location and posts them side-by-side for you to comparison shop.
Now, everyone from your D2C distributors to large marketplace sellers, legitimate 3P sellers, and rogue and unauthorized sellers are on a level playing field—they’re all presented to the searching consumer, and that consumer has the purchase power.
Disjointed sellers have just as much power and authority to represent your brand as you do, without the same quality, pricing strategy, and customer focus as you.
In most shopping scenarios, consumers will choose to purchase a product from whichever seller offers the lowest price. Marketplaces like Amazon and Walmart know this, and optimize their product selection based on all retail offers to serve consumers the lowest price for the same item.
This means that as one seller drops the price of your product, the next will follow, and then the next, etc. Everyone gains access to the product at or below MSRP. This opens the door for unauthorized sellers to purchase inventory during promotions or at discounted prices and then turn around and sell the same product slightly below competing sellers’ prices—for profit.
As customers search for your product, they notice the cheaper price and purchase from the unauthorized seller, rather than paying the price you’ve established with your retail teams. Simultaneously, as Amazon monitors their product listing against other available channels, they notice they don’t have the lowest price. So Amazon, and other marketplaces, in service of the consumer, drop their price to match the lower price offered by an unauthorized seller. To stay competitive, your other channels follow suit. The cycle, also know as the profitability death spiral, continues to drive down the price of your product, grinding away your margins and profitability.
This doesn’t sound like much of a problem if your brand isn’t actively selling on ecommerce marketplaces, right? Unfortunately, it causes big issues for your brick-and-mortar sales, too. Large retail chains like Best Buy and Macy’s noticed this potential loss of sales from ecommerce and needed to defend and protect their profit. Retailers started telling brands that, in order to keep their products in-store (which accounts for 80% of most brands’ sales) they would need to lower their prices to match online prices. Which led to the concept of price matching. If a customer could prove the price of a product was lower somewhere else, Best Buy would match the lower price and charge the brand for the difference.
As other brick-and-mortar retailers jumped on the trend, brands started to see large losses in their margins.
The danger that disjointed sellers pose to brands is enormous—without a way to control all of a brand’s distribution points on ecommerce, your brand spins farther and farther down the profitability death spiral. Using custom technology and data-driven insights, Pattern can identify disjointed and unauthorized sellers for your brand and develop a custom strategy tailored to your specific needs to address these big issues as soon as possible. Then, Pattern partners with the econtrol law firm, VORYs, to enforce take downs and save brands who find themselves caught on any stage of the death spiral.
With the right resources and expert help, we’ve helped hundreds of brands to regain their footing and control on ecommerce, win the buy box, and grow their sales.
Contact us today to regain your brand control.
Since most brands only sell about 20% of their products online, it’s common for executives to turn a blind eye to their poor ecommerce performance—issues there are probably a small problem, right? But if you can pinpoint the lackluster ecommerce profitability to poorly-performing listings, then you can take care of issues now that would snowball to greater losses as your brand grows.
As an expert in ecommerce and the world’s foremost ecommerce accelerator, Pattern has unparalleled expertise in managing brands across global marketplaces. Partnering with Pattern gives you access to data, technology, and top teams across multiple disciplines that help you prioritize great product listings in your overall ecommerce strategy and provides the resources to improve underperforming listings.
We've highlighted three ways poor listings impact your Amazon marketplace performance.
If your listings aren’t optimized for SEO and strategic ad placement, they will not be found by customers. And if your products aren’t found, your traffic, conversions, and overall profitability drop significantly. Pattern’s Amazon data and trends suggest that only the top four products listed in an Amazon search result drive more engagement with a brand's listing. So, optimizing your products for organic discoverability needs to be a priority for your ecommerce efforts.
Typically brands find it tempting to underestimate the power of SEO and paid ads, but the stakes are too high to ignore their impact for long. To put it into perspective, Amazon’s ads are clicked 42% more often than Google ads. And, the data shows when people search for products, 74% of them search Amazon first.
Another reason Amazon search is so valuable is because of where your consumers are in their buying journey. Ads on social media and Google can be valuable, but on Amazon, you have the advantage of knowing your audience’s search intent. Appearing in front of consumers wanting and ready to buy a product that aligns with their search query is a huge opportunity that you can’t miss.
So, you need to be putting the right resources into creating and testing your listing titles, product descriptions, search filters, and backend search terms. (We’ve listed some of the best practices for brands here.) As you find what works, Amazon’s algorithm will be able to better identify your products and serve them in front of consumers ready to buy.
Pattern’s expert SEO teams know the best practices and how to optimize your product listings for the right audiences to improve your rankings for better traffic and conversion wherever you sell your products online.
It’s hard to overestimate the importance of brand affinity on ecommerce marketplaces. One of the key reasons you should be establishing a strong brand presence is to build a consumer base of loyal, repeat customers.
Repeat purchases from repeat customers are a true sign of a healthy, thriving brand. And when you can establish a great relationship and deep trust with the people you’re selling to, you’ll naturally build positive momentum with their reviews and word of mouth endorsements. In short, it’s easier to reduce buying friction, the cost of conversion, and the cost of acquisition with people who already have an enthusiastic opinion of your products, leading to more conversions and overall success for your brand.
Clearly, it’s valuable to find your brand advocates, but how do your listings help you do that? The first is by claiming the buy box.
Many brands struggle with disjointed sellers—3P sellers who have acquired your products, (for example—after buying them on deep discount) and now “pose” as your brand to sell those products to consumers. They often sell your products below their MAP price in order to claim the buy box, attracting more traffic and conversions.
As those customers are drawn to those listings instead of yours, they experience a disconnect in what they normally associate with your brand—often, the copy, media, and even the grammar are ignored for profitability for unauthorized sellers. They often focus on keyword stuffing and quick turnaround to capture traffic and end up poorly representing your brand.
Issues like losing the buy box can hurt your brand long-term, especially if 3P sellers are selling returned, damaged, or fake products in your name. When you have a true understanding of how to optimize your product listings to outperform your competition, you can win the buy box and reclaim your brand presence for your repeat and future customers to ensure better long-term success.
Pattern knows the dangers of disjointed sellers leading to poor brand representation. We have both legal partnerships and listing optimization strategies at our disposal that are proven to help you get ahead of disingenuous sellers and reclaim your brand’s presence wherever you sell online.
In order to achieve long-term profitability and growth on ecommerce marketplaces, it’s important to keep your conversion rates as high as possible. Pattern’s experts have found that a low conversion rate signals to Amazon your products aren’t worth showing to customers, significantly lowering your sales potential. But a great conversion rate helps improve your organic rankings and raises your ROI for paid ads—making it easier and less expensive to sell your products in the long run.
So, how do listings affect your conversion rates? Consumers searching for products on Amazon are more likely to purchase from a brand they trust. And without being able to physically sample your product, they have a short window with limited information to decide whether or not they’ll purchase from you.
We know from extensive data analysis and research there are a few key components of your listing that help in building trust with your consumers. One of those components is the quality of your images.
If your images are blurry or you only post 1 or 2, customers will have a hard time understanding what your product is and its potential value to them. So, they’ll keep searching instead of purchasing your product. Things like the images’ lighting, background, the quality of your equipment, and your editing process shouldn’t be left up to chance.
Partnering with an ecommerce product photography expert is a way to make sure you get the best photography for your products, and your images are optimized for both your brand and your marketplace.
When it comes to optimizing your ecommerce strategy, Pattern has all of the resources you need to achieve long-term profitability. Not only do we have the data and technology to analyze a brand's current performance and opportunity on marketplaces, Pattern has all of the necessary teams to optimize your success from end to end. As the world’s top ecommerce accelerator, Pattern knows the key drivers for boosting listings, conversions, and profitability for brands.
Ready to improve your product listings? Contact us.