Amazon at IRCE 2017: Marketplace Strategy’s Take
With the power and influence of Amazon in e-commerce seemingly clearer than ever, it’s no wonder the Internet Retailer Conference + Exhibition – taking place this week in Chicago – devoted an entire track on the first day to the platform.
The track included several relevant topics that surely aided the e-commerce, marketing, and sales executives in attendance.
Being that IRCE felt those topics were important enough to devote a session towards them in their crowded agenda, we felt it might behoove us to offer our take on a few of them:
Session: Foundation: Amazon’s Catalog — Get Your Listings in Gear
Description: “What is the best way to get your products listed, and what is the best way to merchandise your products? Should you create a new ASIN or use an existing ASIN? What if your ASIN is incorrect or gets hijacked by someone else? What if you want to control the ASIN so you can manage content that consumers see about your products?”
MPS Take: That’s a lot of questions! And the order in which a company should tackle those issues is dependent upon their current Amazon presence and challenges, the product category, size of its product catalog, and its goals and priorities for the channel overall.
However, we agree wholeheartedly that evaluating and addressing those foundational, structural issues should take place first, certainly before leaping into more nuanced strategies or investing in Amazon Marketing Services campaigns.
This falls in line with Marketplace Strategies’ “6 Pillars of Success,” which indicates product pages should be technically sound and conversion-ready before enacting strategies that will increase discoverability.
Marketplace Strategy’s 6 Pillars of Success
Session: Selling on Amazon as a Third Party or First Party – or Both?
Description: “Our speaker will review in detail all the capabilities, limitations and tradeoffs of each system. Attendees will take home a proprietary matrix that illustrates when it’s wise to use the first-party (1P) seller interface versus third-party (3P) and when it makes sense to sell on Amazon using both models.”
MPS Take: This has been a perpetual topic of conversation over the past year in countless Amazon user groups, company meetings, and strategy discussions. We could dig further, but conveniently, we’ve got a white paper for that!
Session: Fulfillment by Amazon: The How, The When – and The If
Description: “Amazon has increased the costs to use the FBA service and also now offers Seller Fulfilled Prime, which has benefits but also puts extra demands on your own processes. The result is an increasingly complex set of decisions about which products to make Prime-eligible, when and where. In this session, we will quickly review the basics of FBA and then jump into the advanced topics.”
MPS Take: For most product categories (a couple exceptions being very large or luxury items), MPS’s perspective is that being listed as ‘Prime’ is vital to sales success, especially given the simple capability for a member to view only products with the ‘Prime’ tag. For that reason, in most cases we recommend a ‘Prime-at-all-costs’ stance in which even a slightly lessened profit margin through FBA is more favorable than the alternative.
It’s true that Seller Fulfilled Prime is a real solution to this issue, but it’s simply not a reality for a good percentage of organizations due to infrastructural limitations that prevent them from filling individual orders and satisfying two-day shipping.
Session: Analyzing Your Amazon Data for Brands
Description: “First-party marketplace sellers receive a ton of data from Amazon… In this session, we’ll look at the whole universe of data available and give examples of how to leverage analytics to drive measurable business results.”
MPS Take: Given the limited variety of metrics provided, we’d stop short of saying 1P sellers receive ‘a ton of data’ (certainly vs. the 3P side where far more information is at the hands of the merchant.)
However, insight through 1P data is one of the most sought-after wishes we hear from consumer brands, so we give credit and cheer on any organization or platform that helps companies make best use of that data.
Session: Marketing on Amazon for Brands and Retailers
Description: “We’ll start with a basic-level overview of the programs available and then do a deep dive into how to create merchandising plans and how to leverage the AMG team to heighten results of advertising and marketing campaigns, focusing on the programs with the biggest impact and return on investment.”
MPS Take: We give a thumbs-up to the session for emphasizing the need for true structure behind AMS efforts. Too many brands don’t lend enough thought and strategy to their campaigns, using a two-dimensional approach designed simply to drive product page traffic.
On the AMG side, we’d love nothing more than to be able to steer our clients towards these flashy, big-exposure initiatives. But given what we’ve learned about the success and measurability of AMG programs, we typically recommend them only for very large, national brands. For any company that experiences a bit of sticker shock from AMG costs, we have found shifting a percentage of that budget to AMS (and potentially using the rest for other marketing initiatives) can do far more to drive sales, and is far more measurable.
Session: Mining Amazon for Sourcing and New Product Ideas
Description: “…Amazon is a rich resource of emerging trends and new product sourcing ideas. Top sellers study Amazon in search of gaps in the supply/demand curve to create new products to meet that market need. In this session, we’ll look at tools and case studies used by the top brands and sellers to mine Amazon’s vast catalog and transactional volume for new product opportunities.”
MPS Take: This is a forward-thinking, proactive approach from which so many brands could benefit if they incorporated it into their own development strategies. Only those executives who truly grasp e-commerce’s role in modern retail can fully understand this new paradigm. Amazon’s product catalog is a free, open database for companies to explore the competitive landscape of just about anything, and use that information to maximize future opportunities.