Three reasons why every brand should be interested in Amazon

By Toni Kallio | 16 May 2019

As we all know, Amazon is heavily shaping number of businesses around the world. Besides being an e-commerce giant, it has brick and mortar stores with no personnel, has quick deliveries of fresh goods, produces pioneering voice assistants and a lot of ambitious and trailblazing innovations are on the way.

When it comes to online retailing, Amazon is not just an e-commerce player – it is an ecosystem and a retailer, a product creator, and a platform. With over 300 million active customers in 180 countries, Amazon is not only heavily shaping the way consumers buy and the way their expectations are met, it also changes our everyday life – how we consume, live and spend our time. Therefore every brand should think about what Amazon means for their industry and for them as a company.

Check out below our three-point list and learn why all Nordic companies should have an Amazon strategy.

1. Boost your business by utilising Amazon as a sales platform

In Amazon and Amazon Marketplace (Amazon’s e-commerce platform available for brands to use) there are almost 3 million companies selling over 350 million products. It is growing fast – during 2018 more than 1,2 million sellers joined Amazon Marketplace. Roughly 50 % of e-commerce purchases in USA are made on Amazon – 17 % through Amazon and 31 % through Amazon Marketplace.

Amazon is quickly gaining space in many European countries as well. For example in the UK, Germany and Italy, already over half of all internet users use have an Amazon Prime account. In practice Amazon Prime means e.g. faster deliveries, more features within Amazon ecosystem, and therefore increased loyalty and more frequent purchases. Think about how often you visit grocery store and compare it to these figures: 47% of U.S. consumers visit Amazon many times a week and 64% at least weekly (Feedvisor: The 2019 Amazon Consumer Behavior Report).

Amazon customers are not only buying books or cheap electronics, products generally associated with Amazon in the past, but everything they need from daily groceries and entertainment to luxury brand items. This is a huge possibility for Nordic brands as well and there are numerous opportunities available for boosting the business through Amazon. Also, the odds are, if you are not there, your competitors will be.

We know Amazon is yet to start its local operations in Nordics but it does not matter. By being present on Amazon’s international sites, Nordic brands can reach millions of shoppers ready to purchase every day. To sum it up, selling on Amazon is worth starting now.

2. Advertise your product and build your brand on Amazon

Amazon not only makes it possible to increase sales rapidly and cost-efficiently, it also offers many ways for brands to  utilise Amazon in boosting the business through advertising.

Amazon is already today the third biggest digital advertising platform in the U.S after Google and Facebook. What is remarkable, is that the money spent on Amazon advertising is growing six times faster than Google and Facebook. Amazon is making massive investments to develop better advertising solutions for all kinds of brands, and consequently Amazon might even overtake Google and Facebook in ad spending in the near future. The natural reason behind Amazon’s rocketing in advertising sales is that their solutions are proven to be valuable and beneficial for brands – Amazon users are actively looking for products to purchase instead of casual surfing.

Performance marketing agency Nanigans interviewed 100 retail marketing executives – each of them responsible for minimum $50 million annual online sales – for it’s Amazon’s Advertising Ascent -survey. According to Nanigans’ survey, the primary reason to advertise on Amazon was related to Performance and ROI (17%) and the next common reasons were “Size of the audience available on Amazon” (16%), “Our target audience is active on Amazon” (15%), and “Amazon’s users are in a purchasing mindset“ (14%).

Self-evidently broad, affluent and active shopper base are also the reasons why all success-seeking Nordic brands should be interested in Amazon’s advertising solutions – whether they are already selling on Amazon or not.

3. Your customers are Amazon’s customers

Ultimately it is about customers as it should be. Your customers are also somebody else’s customers and it is highly likely that your customers are Amazon’s customers as well. Amazon’s hassle-free, well-personalized and ultimately very effective shopping experience is the new normal for the customers.

It might well be that you can succeed without selling or advertising on Amazon. Yet consumers expect your online shop to be as informative, effective and addictive with purchases delivered fast and smooth customer service taking care of customer issues if something happens along the way. Not to mention ever running out of stock and usually having the best price. Amazon’s superior strengths put a huge pressure on businesses – whether they want to sell on Amazon themselves, utilize the platform for advertising purposes or just protect themselves against Amazon’s dominance.

Still too often Nordic brands overlook Amazon because “it does not look good” or it “does not fit our brand”. Amazon’s customer satisfaction numbers and conversion rates tell a different story – numbers of brands are fitting the platform quite well and the customers love it. Brands need to understand that in Amazon it is not about the brand itself or the sales channel itself, it is about the customer the best possible product to match their needs.

Amazon might offer you a great potential or perhaps it possesses a great threat. It all depends whether you are prepared or not.

In future’s blog posts we will dive deeper into how to unlock the full potential of Amazon. In the meanwhile, contact us and let’s talk.

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