When is an online retailer not a retailer? When, like Amazon, it’s a Platform
October 8, 2019
We're not in Kansas anymore... Amazon is changing the channel landscape from retail to platform.
Amazon is no ordinary online retailer – it’s an evolving platform with ambitions of global retail dominance. Not content with only affecting where consumers shop, it has also been busy changing how consumers shop, and how product manufacturers sell.
Its impact on the consumer goods industry is unprecedented. It may have started out as a relatively straightforward online retail business, but it has since evolved into a platform that attracts and matches suppliers (producers) and consumers, who use the tools and data that it provides to transact business.
Amazon appeals to the widest cohort of consumers and producers
The e-commerce giant appeals to the widest cohort of consumers and producers, across every category imaginable. Whether for books, groceries, camping gear, socks, light bulbs or consumer electronics Amazon is the first port of call for vast numbers of your buyers and sellers.
In truth, Amazon’s platform ambitions could be seen from its earliest days. When it started in 1995 its main business may have been selling books, but it took a platform approach to sourcing book reviews by tapping into its consumer-base to create value on the platform with user-generated reviews.
Marketplace & Ads
Since then it has added numerous platform-like capabilities and tools. In 2000 it opened up Amazon.com to third-party suppliers with Marketplace. It has added APIs, Widgets, and Affiliate programs that enable users to extend the platform, and it diversified the platform interface to include voice. More than 100 million people have bought Alexa powered devices such as the Amazon Echo or Dot, which may or may not be delivering data to Amazon about their wants and needs.
Amazon is also emerging as a major platform in the advertising. In September 2018 it re-branded its multiple marketing options, grouping Amazon Media Group (AMG), Amazon Marketing Services (AMS), and Amazon Advertising Platform (AAP) under one banner, Amazon Advertising. The company doesn’t break out revenue for the division in its financial results, but it is believed to be a significant proportion of its “other” category, which grew by 95 percent, to $3.4 billion in Q4 2018, compared with the same period in 2017.
Beware of Geeks Bearing Data
Data is central to how Amazon does business, and how it analyses shopper activity, to engage and influence buyer behavior. To succeed on Amazon brands need to adopt a similar data-centric approach to planning and managing their Amazon strategy.
Amazon’s vendor tools are largely designed to deliver on Amazon’s agenda.
The tools and data Amazon itself provides to help brands manage product listings, landing pages, and advertising, including Amazon Retail Analytics (ARA), Vendor Central, Seller Central, Amazon Advertising, Chime and FTP, are a good starting point. However, Amazon’s vendor tools are largely designed to deliver on Amazon’s agenda. To match Amazon at its own game brands need to seek out a broader set of tools and insights, rather than only depending on the online retailer’s standard issue.
That’s why eStoreMedia developed AMZ Navigator, a solution for product manufacturers that combines Amazon data with eStoreMedia’s full-category e-commerce analytics to deliver deeper insights including market share estimates, and dynamic benchmarking, identifying category trends, and driving actions for growth. The solution is designed to help brands plan, manage, measure and improve effective Amazon strategies and tactics.
It focuses on providing deeper insights that enable brands to optimize their Amazon listings, content, price & promotions, ratings and reviews, search and traffic to engage consumers, and outsmart competitors, to win the buybox, and drive sales performance on the platform. The solution also includes the end-to-end content creation, management, and distribution capabilities of eStoreContent, including Amazon-ready content templates.
The goalposts on Amazon change frequently as more brands and product manufacturers target the channel to deliver sales. Brands need to be willing to adopt tools and data that help them recognize category trends before it’s too late.
To find out more about AMZ Navigator and Best Practice for Amazon Perfect Store performance request a demo.