The retail industry has undergone a significant transformation over the past five years, largely due to the disruptive force usually referred to as the “Amazon Effect”.” Amazon today owns over 50% of the total e-commerce US consumer market and it continues to gain share.
The Amazon strategy is a beautifully simple one: Give the customer the lowest pricing for products as possible, while giving excellent service. That has been the key to their success.
Historically, retailers and distributors were dependent on their relationship with brands for long term success. I used to say, “I can lose customers and stay in business, but if brands leave me, I am dead”. Amazon has flipped this relationship on its head, and it has had the greatest impact on Brands.
There’s been a trend of big-name brands refusing to sell on Amazon, Birkenstock, Nike, and Ikea to name a few. Pricing strategy issues and wanting more control over the customer experience are reasons brands commonly cite for making this decision.
Amazon is taking some action to give brands more control. Features like Amazon Brand Registry and Project Zero empower brands to better manage their listings and address issues, but much of the responsibility still falls on the brands.
But the facts are, control in any form can be difficult to maintain on Amazon. Gray market products, MAP policy violations, and unpredictable third-party sellers are all issues facing the modern-day brand. Not having control can lead to pricing being all over the place, content being misleading or incorrect, and a less-than-ideal customer experience. Cutting off Amazon altogether may seem like a solution, but by doing that, brands are removing the only control they had — leaving unknown third-party sellers to represent their brand.
Control is a choice
In a study done by Feedvisor, 89% of US consumers are more likely to buy products from Amazon than any other e-commerce site, Combine that figure with the fact that Amazon dominates a huge percentage of the US e-commerce market, and it becomes overwhelmingly clear that shoppers prefer Amazon when it comes to e-commerce.
Ditching Amazon doesn’t work. Birkenstock, Nike, and Ikea products are still available through third-party sellers on the marketplace.
Whether brands like it or not, third-party sellers will continue to sell their products on Amazon. Choosing to take control is the necessary move. Creating a strategy to win back control allows brands to protect their image, ensure customers receive authentic products, and deliver on-brand experiences.
Gaining brand control on Amazon
To begin with, brands must have a full understanding of their retail distribution network and find a strategic way to ensure trusted sellers are present on Amazon listings. The first step is setting a solid foundation. Brands should have an unauthorized seller policy, an internet authorization policy, and a MAP policy posted publicly on their website. They should also make sure that they are defining what an “authorized product” is in a legal sense. This is important when acting against unauthorized sellers. This is particularly important in the consumer electronics space.
Consumer Electronics as a category is overdistributed.
Many brands have lost control of the marketplace and their ability to actively manage the customer experience.
SaaS based, self-service platforms notifying you of countless MAP breaches and dispatching ineffective cease and desist legal threats to sellers have become the industry’s band-aid.
MAP violating sellers are merely symptomatic of a greater problem, which is a lack of transparency around the true retail and secondary distribution networks in totality
Monitoring is the real long-term solution to the problem. Control requires brands to consistently monitor for violations of their policies, and when found, take decisive action. This means reviewing listings daily, getting actual product from these sellers to determine the source and effectively managing Amazon Brand Registry. This can be done in-house, but it takes many resources to do effectively, which is why many brands choose to outsource this work to a retail or brand control partner. But there was no one stop, closed loop partner until now. Introducing Marketplace Intelligence, in partnership with Protempo
How does Marketplace Intelligence work?
Key Takeaways of Marketplace Intelligence based program for Brands
A strong brand control strategy gives brands the ability to meet their customer expectations and deliver a consistent experience through Amazon while maximizing profitability. Other benefits include streamlining your supply chain, improved customer experiences, consistent pricing and messaging, and getting more out of marketing spend. Online brand control is a step toward the unification of a brand’s greater strategy, being able to deliver a consistent experience across all retail channels.
We would like to offer you the benefit of a free Marketplace Intelligence report that will provide you with a snapshot of the current unauthorized activity that is undermining your Brand strategy.