Does your home or building products brand really need to be on Amazon?

  • Categories:

    Paid Media, Strategy

  • Date:

    July 09, 2020

Does your home or building products brand really need to be on Amazon?



Paid Media, Strategy

Should you be marketing and selling your products on Amazon? It’s a $280 billion question: In 2019, the global e-commerce company netted 280.5 billion U.S. dollars (Statista). Today, the growth of Amazon.com — already the world’s largest online retailer — continues to skyrocket. But is it worth the effort for home and building products brands?

Without a doubt.

If you aren’t selling on Amazon now, here are five reasons to jump on the bandwagon.

1. The site owns the largest share of home and home improvement digital transactions.

    According to Search Engine Watch, Amazon owns about 75% (Home) and more than 80% (Home Improvement) market share of digital transactions for these categories. It’s important to recognize Amazon’s dominance even prior to the company’s acquisition of Whole Foods and Ring, which is not even reflected in the data. Many people guess Amazon’s market share sits closer to 50%, but that’s only accurate for the site’s weakest categories, such as clothing, shoes and furniture.

    In reality, Amazon’s share in each of the following categories is higher than its 74% average share of digital transactions in ALL categories:

    • Appliances
    • Home
    • Home Improvement
    • Office
    • Household Essentials

    Meanwhile, these categories rank in the top five of all Amazon product categories for growth:

    • Appliances
    • Health and Household
    • Patio Lawn and Garden

    2. Your customers are already shopping on Amazon.

    In order to increase product sales, you need to leverage all opportunities to develop a direct relationship with your customers — especially on Amazon, since most of them are already shopping on the site in some capacity. At the end of 2019, the online retail giant’s Amazon Prime program had approximately 112 million subscribers (Statista), equal to nearly one-third of the entire U.S. population. That figure doesn’t include all of the non-Prime members who also shop at Amazon.com without Prime member benefits. In the meantime, Amazon is collecting and optimizing the shopping experience more quickly than anyone else.

    As for how many consumers view Amazon.com? Well, it goes something like this: When we want to find the “why,” we go to Google. When we want to “buy,” we go to Amazon.

    3. Your products are most likely already on Amazon.

    Thanks to the many third-party sellers and their ability to place listings on Amazon, at least some of your products are likely already on the site, even if you haven’t mobilized your Amazon strategy. Furthermore, if someone else is selling your products, they’re undercutting your regular retailer(s) and potentially getting poor ratings, which hurts brand perception and trust.

    That’s why it’s important for manufacturers to control the narrative and consumers’ experience purchasing the product. But you can’t do that unless you take an active approach to selling in the world’s largest marketplace.

    4. New e-commerce tools empower manufacturers to control the message and test product offerings.

    Amazon has launched a variety of tools aimed at informing potential customers about brands and their products. So, even if you don’t want to sell all of your products on the site, building Amazon into your e-commerce strategy allows you to control the message and even test product offerings. Using tools like Amazon Stores, A+ Content and Sponsored Brand Video, in conjunction with reports like Amazon Brand Analytics, allow you to deliver impactful brand messaging while gaining valuable audience insights.

    5. Amazon is becoming more and more critical in categories that have historically relied on brick-and-mortar retail.

    Your brand’s success will largely depend on how you plan for the future across all relevant categories — including traditional ones. That’s even more true in the wake of the COVID-19 pandemic.

    Some experts are predicting the permanent closure of around 15,000 stores this year. Meanwhile, consumer spending on Amazon is up 35% from the same time in 2019. Retailers with solid e-commerce structures, such as Walmart, Target, Etsy and Wayfair, also saw increases. Experts say these trends should continue despite the end of stay-at-home orders. (Vox)

    But all online shopping experiences were not created equal. In this time of emergency, shoppers have gravitated toward solutions that allow them to quickly find the products they want without having to leave the comforts of home. This, in turn, has made retailer homepages and site search functions more critical. On Amazon, it’s increased the importance of SEO for product listings, ensuring that consumers can find those products quickly.

    We know the coronavirus put the future of brick-and-mortar stores — where retail sales are expected to fall sharply in 2020 — in question. Luckily for home improvement, physical stores are still driving the category (while expanding on Amazon and elsewhere online). Regardless, the global health crisis has made Amazon and other e-commerce platforms more crucial than ever, and we’re unlikely to see a return to pre-pandemic levels. This is, in a sense, our new normal.

    Twenty years ago, before the home improvement retail giants Home Depot and Lowe’s really got traction, brands were skeptical about whether they should sell their products there. Today, it’s hard to imagine a large home improvement product manufacturer asking that question. Meanwhile, Amazon is now the world’s largest store.

    Should you take the leap? If you sell a product that consumers want to buy, the answer is a resounding ‘yes.’ Do it well, and you’ll gain instant access to hundreds of millions of potential customers. You’ll also protect your margins, profitability and brand experience.

    One note: If your business is like many others, selling through Amazon is a careful balance between selling online and selling enough in stores to maintain the shelf space you want and need at Home Depot, Lowe’s and elsewhere. That’s why it’s critical to make sure your sales and distribution strategies are aligned, while studying the activity already happening around your product online. Then, and only then, will you be ready to crystallize and work toward your goals and objectives of selling on Amazon.

    Need help? Email me.

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