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 20, 2022

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)
Sept 20, 2022

4 Ecommerce 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.

Sept 15, 2022

The 3 Tmall Metrics That Every Brand Needs to Know

If you’re interested in expanding your brand internationally, you’re probably familiar with Tmall. Tmall is Asia-Pacific’s (APAC) largest marketplace, and indisputably the biggest ecommerce powerhouse in the world. It represents a huge opportunity for many brands, but entering the space is also a big challenge to take on.

At Pattern, we recommend brands looking to enter international markets should first focus on dialing in their domestic presence. Once you’re satisfied that your brand is well-represented and optimized locally, you’re ready to think about tackling new regions, like APAC, and launching on marketplaces like Tmall. Our top advice for entering Tmall is to understand and strategize around its three most important metrics: service, delivery, and content.

What is Tmall’s Detailed Seller Rating (DSR)?

Service, delivery, and content ratings are the three elements that make up Tmall’s Detailed Seller Rating (DSR) score. Each component is scored on a scale of 1-5 that is displayed publicly on your brand’s Tmall flagship store page. This is meant to help consumers decide whether or not to purchase your products.

Why DSR Determines Success on Tmall

DSR scores are important because they’re highly influential in driving conversions—customers see DSRs as a way to quickly understand if a brand is trustworthy and worth buying from. They also matter quite a bit to Tmall itself—they monitor these scores and will take action to close flagship stores with low scores.

Let’s go over each element of the DSR score and some steps you’ll need to take to achieve high ratings.

DSR Score Elements

1. Service

Service is a huge ecommerce component in APAC marketplaces. In most other regions, product listings are static, and consumers use content and reviews to make a decision about what to purchase. On Tmall, consumers want to interact with your brand and test its validity before buying—each transaction takes at least one human interaction to convert.

So, to get a great service rating, you’ll need to have a large, established customer service team dedicated to Tmall sales that can offer real, human touchpoints and very fast response times. To get an idea of the speed your agents should be capable of producing, in our Tmall benchmarking exercise, 92.5% of brands’ customer service agents replied to queries via live chat within 30 seconds, 5% replied within one minute and the remaining 2.5% of brands took longer than a minute. So, look for a Trade Partner (TP) that has enough resources to compete with those numbers, support your sales, and maintain a good DSR score.

2. Delivery

Another thing you’ll really want to focus on is a high-quality delivery experience for consumers. As in other regions around the world, Tmall consumers have high expectations for their delivery experience. In our Chinese consumer polling report that targeted consumers buying from Tmall Global, we found that 6% expected same-day delivery, 15% expected next-day delivery, and 46% expected 2-5 day delivery.They want to receive their products fast and they want the products to be undamaged and pristine upon arrival.

So, to achieve a high score for your delivery capabilities, we highly recommend partnering with a TP or ecommerce accelerator like Pattern (which serves as a TP) who has the ability to facilitate your distribution. Make sure your TP has the right infrastructure in place to support high-quality logistics experiences for all of your consumers—they should have an established, well-oiled delivery process in place and the capability to fluidly add you to their current fulfillment system.

3. Content

As in every digital marketplace, content is a huge component of the decision-making process for consumers on Tmall—they can’t touch your product with their hands or see it in person before buying, so it’s important they’re empowered to make a good decision on whether or not to purchase based on the videos, images, and copy.

The goal is to make all of the content and relevant information on your flagship site easily-accessible—consumers should be able to visit your page and make a decision about whether or not to buy without navigating to a new site/page and taking their conversions with them. Images with text and extensive product details are a great way to do this, as well as making sure your service team can speak to all aspects of your product with any consumers (via text or chat).

Expand Internationally With Pattern

As the world’s foremost brand partner for ecommerce acceleration, Pattern truly understands the significance of international expansion. With regional offices around the world, Pattern knows how to successfully launch and grow brands on Tmall and other marketplaces, with the data, insights, and marketplace intelligence to build the metrics that matter. 

It’s important to have a fantastic brand presence, a knowledgeable guide, and a clear go-forward strategy for your best chance at success. With our in-country resources, expert teams, and extensive experience in growing brands around the globe, Pattern can help you get there.

Set up a call to get your international expansion strategy in motion.