Amazon’s Fundamental Shift and What it Means for Brands

Since Amazon was founded in 1994, the company has evolved to become the largest e-commerce marketplace and cloud-computing platform in the world. But now, Amazon is much more than just an e-commerce platform for the brands that use it to sell their products. It has undergone a transformation, changing the way brands do business and make decisions, on and off Amazon. Continue reading to learn more about Amazon’s fundamental shift, how it came to be, and what it means for brands.

What Was Amazon in the Beginning? 

When the world first got to know Amazon, books were the only product available. Jeff Bezos’s early dreams were to create an online community and e-commerce platform, and success was imminent. At first, Amazon was a platform used for completing transactions and converting customers from the bottom of the funnel. For someone who was ready to buy a product, Amazon was a place to go online to find the product and complete their purchase. 

Amazon eventually went public and added music and movies to its selection. During this process, a series of new features and updates were added, including Marketplace. Since then, sustainable growth has helped achieve Jeff Bezos’s dream of creating a successful e-commerce platform for vendors, sellers, and shoppers, making him the richest man in the world in the process. 

How Amazon has Evolved for Consumers and into a Marketing Platform for Brands

Amazon’s fundamental shift has grown the platform to become something much more than a place products are bought and sold. As a result of both Amazon expanding its capabilities, and changes in consumer behavior, it has evolved into a destination for product discovery, research, comparison, and purchasing. Successful brands that sell on the platform take advantage of this and use Amazon as a marketing platform to reach new customers. 

Rather than using Amazon simply as a transaction tool, brands have the opportunity to use the many features and insights available to increase discoverability and conversions across the entire funnel. Amazon Advertising has made major strides and delivers results for brands. It continues to release updates and provide brands with new and improved ways to reach customers. 

In addition, about half of shoppers in the United States now begin their product searches on Amazon. Consumers use Amazon to read reviews, compare prices, and look at the images brands provide. It has become a place for consumers to conduct their research and make an informed decision when it comes to shopping online. 

What Does Amazon’s Fundamental Shift Mean for Brands? 

In response to Amazon’s fundamental shift, brands have been forced to adjust and optimize to compete on the platform. Successful brands use a holistic approach to Amazon, build their brand, and attract new customers. To do this, brands have a number of variables to consider. 

Here are a few examples of how brands approach Amazon as a marketing platform:

  • Reallocation of Digital Media Mix 

Brands are shifting advertising investments traditionally reserved for Google and other online channels to Amazon. Advertising continues to grow as an important segment of Amazon’s business. It provides the unique benefit of increased product discoverability and better insight into conversion rates.  

  • Focusing on an Advertising Strategy

Making an impact on Amazon organically has become more challenging. Amazon is saturated with strong listings, products with hundreds of reviews, widespread organic optimization, and robust sales velocity. With functionality and complexity on the Amazon Advertising platform increasing, it’s important for these efforts to be handled by an expert.  Brands are looking to both the search advertising and programmatic offering from Amazon as a way to introduce their brand to new consumers based on both search intent and in-market behavioral characteristics, giving them a full-funnel media strategy.

  • Leveraging the Attribution Data Available 

The attribution data available to brands when they advertise on Amazon versus other platforms or traditional channels are extremely valuable. For example, brands that invest in TV or radio commercials often face challenges determining whether a consumer converted as a result. Furthermore, traditional methods with a lack of conversion insights prevent brands from taking action in the future to better their strategy. 

  • Prioritizing Copy and Brand Optimization

Amazon is not Google, and the approach to optimizing titles, bullet points, back-end keywords, and descriptions, must be aligned with Amazon-specific best practices. While general knowledge of search engine optimization (SEO) practices is helpful, an understanding of Amazon’s unique qualities helps brands rise above the competitive landscape.

Design isn’t only a creative avenue, but a strategic discipline that can heavily influence conversion rate, and minimize issues like negative reviews and product returns. Both the product image library and A+/Enhanced Brand Content Pages are unique opportunities within Amazon to highlight key features, competitive differentiators, and brand strength to increase the chance a product wins out over other considered items.

Both endemic and non-endemic brands have the opportunity to apply these tactics and leverage Amazon as a powerful marketing platform. Brands from Amazon’s standard categories, as well as non-traditional verticals like healthcare and finance,  are using it as a marketing platform. It’s up to brands to strategically invest their budgets where it will make a difference.

Amazon’s fundamental shift has changed the way brands use the platform to sell because of technological advancements and changes in consumer behavior. What once worked for a brand’s Amazon strategy isn’t the best for success today. It’s important for brands to consider how Amazon has evolved, how it will continue to change, and what tools are available to them that could help them succeed. 

“Through our experience working with clients across different industries and sizes, MPS’ clients have  shifted a significant amount of dollars to Amazon from other avenues,” Drew Kraemer, Co-Founder, and CEO at Marketplace Strategy said, “We’ve seen a shift among clients of anywhere between 60-70 percent of both brand and performance media dollars to Amazon. Brands see the value in Amazon’s ecosystem and how it now serves as a marketing platform for their products.  Particularly allowing new customers to discover their products for the first time.” 

Marketplace Strategy views Amazon as a complete ecosystem, where only proficiency across all facets of the channel leads to jumpstarting the ‘flywheel’ to sustainable success. To learn how to maximize your brand’s Amazon performance and reach its full potential, schedule a free consultation.

Hannah West

Hannah West