The Future of Brands on Amazon Beyond COVID-19
In the midst of the calamity of COVID-19, there are bright spots if we look in the right places. Technology is enabling us to stay connected both personally and professionally. Infrastructures are in place to move our lives forward, even if at glacial speed in some sectors.
One particular juggernaut’s infrastructure has been providing some consumers with their necessities for years but has now become a lifeline for many families who never used to shop online. That company’s name? Amazon.
Our consumer survey recently captured 2,477 responses regarding spend on Amazon before the COVID-19 pandemic, during the period of social distancing, and expected online shopping behaviors once the curve is flattened and people resume more normal activity outside the home. Unsurprisingly, the share of spend on Amazon is rising dramatically during this period of social distancing.
What is even more surprising, however, is the indication this stark uptick in consumer spending behavior on Amazon will not fully recede following the end of social distancing.
For example, online pet purchases have spiked 35% during the pandemic and are expected to be 16% higher than they were pre-coronavirus. Many Americans are adopting animals in light of being at home more, generating a higher need for pet supplies. If they find their pet requirements can be easily met through online shopping, particularly subscribe and save options through Amazon, pet owners both new and old are more likely to be permanent converts from the traditional trip to their local Walmart or Petco.
Online baby product sales have surged over 200% week-over-week since the beginning of March, and purchases of baby products specifically on Amazon have risen 29% during COVID-19 social distancing.
With the sudden spike of e-commerce spending, brands must invest in their online presence through improvements in both technology and digital presence. A poor user experience will drive consumers to another site to spend money with another seller.
Distributors of beauty products will need to level up their digital experience offerings to provide shoppers with a way to match their foundation color or imagine the scent of a potential new perfume if they want to maintain most of the 30% jump in sales they have experienced since the beginning of the pandemic.
Sellers of clothing must find a way to convey texture and fit through their product descriptions to capitalize on their 70% leap in online sales. Brands have little control over their own products when they are sold through other sellers or marketplaces, and when a consumer is unhappy or unsatisfied, that consumer doesn’t blame the marketplace, they blame the brand.
With the intensity of online competition and low barriers to entry, SEO and paid search competition, as well as the constant need to improve user experience and maximize shopping cart conversions, e-commerce has always posed a number of challenges to even the most established brands. These common issues are now even more pronounced and elevated during COVID-19 and will continue to be obstacles in the future.
However, all of the aforementioned roadblocks pale in comparison to the one created by illegitimate sellers pushing legitimate products on the Amazon marketplace.
Where there’s a will there’s a way. A growing concern with the increase in e-commerce activity is the rise of third-party sellers online finding creative ways to sell goods to meet this new demand, from counterfeit merchandise (known as the black market) to genuine products peddled through unauthorized channels (known as the gray market).
Rogue sellers are securing gray market products through a variety of channels, from stolen goods to liquidation and overstock. Sometimes these sellers don’t even know the origin of the products they offer at deep discounts, often compromising the quality during storage and transportation or selling expired versions to consumers. These dangerous holes in the supply chain leave your product and brand vulnerable to being compromised.
The good news is, sellers can do more than survive during this time. They can grow. There is an unprecedented opportunity to shift product and brand preferences in some categories in light of consumers who are newly turning to Amazon to purchase products they previously purchased strictly through brick-and-mortar shops or through other specialty retail channels.
For instance, niche cloth diaper brands can leverage their new customer base by hooking them through messaging emphasizing the benefits of permanently switching from disposable to cloth diapers. To capture these new segments, brands will need to focus more on elements of the consumer shopping experience.
In order to do this, though, businesses need strong e-commerce teams at the center of their digital ecosystems working to protect their brand’s reputation, product, and bottom line. The better you get at working with Amazon and learning the ins and outs of their brand protection strengths and limitations, the more likely you are to be able to leverage this new shopping landscape.
Trajan Bayly, CEO of Gray Falkon, is an award-winning innovator across multiple industries, including e-commerce, technology, health and finance. As a 20-year business veteran and recognized expert in market strategy, innovation, and artificial intelligence (AI) technology, Trajan's leadership experience spans a wide spectrum, from startup technology companies to large, global organizations like Ernst & Young and General Electric.