Member Exclusive   //   April 18, 2024

Amazon Briefing: 3 ways brands’ perceptions of Amazon have changed

This is the latest installment of the Amazon Briefing, a weekly Modern Retail+ column about the ever-changing Amazon ecosystem. More from the series →

The Amazon ecosystem today is vastly different from only a few years ago.

Before, premium brands had very differing views on the platform. For more luxury players, the fear was that selling on Amazon would degrade a brand’s image. But the perception has changed drastically with, now, most brands having at least a semblance of an Amazon strategy.

This stark shift was certainly apparent at the Modern Retail Commerce Summit. The event, held this year in New Orleans, brought together top executives from brands like Crocs, Saatva and Prose who spoke about the changing commerce landscape. And Amazon was in the background of many of these conversations.

The big shift in the conversation wasn’t that more brands were selling Amazon, but instead, the idea that having an Amazon presence is nearly table stakes.

“You definitely want to be present [on Amazon],” said Jeanelle Teves, chief commercial officer at the premium baby product brand Bugaboo.

With this as a backdrop, here’s a look into how brands are thinking — or rethinking — their Amazon strategies, based on conversations from the Commerce Summit.

The new Google
The number one reason Bugaboo sells on Amazon is simply because most parents use it.

“Amazon is an incredible search tool,” Teves said. “It is pretty much the primary destination outside of Google where parents are looking for reviews.”

With this, the company has made a point to be on Amazon, even though it’s a more premium product at a higher price point (Bugaboo’s top-selling stroller goes for $1,299).

In many ways, Amazon is a unique channel. Bugaboo’s other non-DTC channels are primarily nicer stores like high-end baby boutiques and Nordstrom. As Teves described it, all of these channels fill a need or find a customer that the brand’s website might not be able to.

Amazon, by contrast, is intended for everything else. “We see a lot of new consumers intersecting with our brand on Amazon,” she said.

No longer a brand killer
Another big theme was general agreement that nearly any brand can have some kind of Amazon presence. An executive at a luxury brand, for example, said that while the company doesn’t actively sell all its products on Amazon, it does use it to test out new product launches and has a brand page on the platform.

Similarly, Teves tried to dispel the idea that premium brands should fear being listed on Amazon. Even if it’s not considered a purveyor of curated higher-end goods, it still has a place.

“You can buy aluminum foil and you can buy really nice speakers on Amazon,” she said. “We know that parent and future parent is there — it’s an important place to be as they are searching for those keywords.”

The real question, then, is: what type of presence should a brand have? Bugaboo currently sells most of its products there, though sees higher demand for accessories. But other brands said they are increasingly curating their selection so they can at least show up in search results.

Lowering customer acquisition costs
Perhaps the biggest mindset shift is in the way Amazon is being compared to other customer acquisition channels. One of the most discussed issues during the three-day event was the rising price of advertising on platforms like Meta and Google.

“We pour a ton of money into paid — and most of that is Facebook — and it’s hard to get that return,” said one attendee.

But some said they are increasingly putting their money into their Amazon business and seeing promising results. Charlie Razook, founder of the skin care brand Jackfir, said the brand has shifted much of its marketing toward its Amazon channel given its outsized performance.

The brand launched in 2021 and spent a year focusing on traditional marketing channels like Meta and PR. “When were seeing CPAs and traditional CAC [go up], we knew it was time to explore other channels,” Razook said. So, Jackfir opened an Amazon store last year and spent a little bit of money to promote it.

“We saw that our return on ad spend was between 10x and 12x per month,” he said. Now, Jackfir has been investing more in Amazon given the initial performance. “It will overtake our website [in terms of sales] by the end of the summer,” he said.

Like Teves, Razook views the Amazon channel pragmatically — the place where most every American shops. “It’s especially important to men — men are lazy,” he said.

Amazon news to know

  • Amazon is fighting back against claims that its Just Walk Out technology requires a lot of human labor. The company told Axios that the reports are untrue — and that it plans to bring on more Just Walk Out retail partners in the coming year.
  • On the subject of checkout technology, Amazon also said it is partnering with more grocers to use its smart cart tech.
  • The families of 15 people who died are suing Amazon claiming their deaths were caused by purchasing a deadly chemical from its marketplace.

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