June 16 was, for many in the natural products industry, the most notable day of 2017. The news that Amazon would buy Whole Foods Market has been followed by six months of speculation about what the merger means and how companies should proceed. Will it squeeze out small, local brands or instead create new opportunities for them to reach new customers?
“So far we don’t know exactly what it means,” said Rob Principe, vice president of strategic partnerships at Wishing U Well, a consultancy focused on Amazon strategy. “But I’ll tell you it’s not going to hurt for you to get better reviews, or to spend on marketing on Amazon, or to increase your sales velocity and add SKUs. All the stuff you were doing before on Amazon—or you should have been doing before on Amazon—it’s not going to hurt you.”
Out of all online grocers, Amazon has captured the most significant share of sales thus far. A recent report from RBC Capital Markets found that three-fourths of people who regularly shop online for groceries most often shop through Amazon. And according to Nutrition Business Journal data, internet is the fastest-growing channel for supplement sales, with 9 percent of sales occurring online and Amazon leading the way.
As the e-commerce juggernaut captures more industry sales, experts say it becomes imperative that brands are represented on the platform the right way. So how do they do that? We talked to three Amazon consultants for their advice.
Be ready to devote adequate resources. Amazon is a dynamic marketplace, and companies who use it need to be committed to giving it the necessary attention and resources. “It’s really important to make people aware that Amazon is always and has always been changing, with or without this acquisition,” said Johanna Cooper, an Amazon consultant who recently joined the team at Cascadia Managing Brands. “You have to make sure that brands are completely flexible as Amazon changes.”
One mistake a lot of brands make is getting everything set up on Amazon and then thinking that the hard work is over, said John Willkom, director of CPG at NetRush. He suggested that sellers use the analytics that Amazon provides to keep an eye on who is buying and who is clicking, in order to better concentrate their marketing efforts to drive the right targeted traffic to listings, and make changes to a listing if it’s underperforming.
“Often you can make just subtle changes to various parts of an Amazon page, even just the title, and you can see different results,” he explained.
The best approach to managing these e-commerce efforts is to build a cross-departmental Amazon team that includes salespeople, creatives (designers, copywriters, photographers), marketing experts and supply chain managers, Willkom said.
Understand that Amazon isn’t just for buying. More than half of U.S. adults under 50 say they check customer reviews online before buying something for the first time, according to a 2016 Pew Research Center study. That makes it all the more important for Amazon listings to do a complete and accurate job of telling a brand’s story.
“Amazon should essentially be an extension of your own direct-to-consumer website,” Willkom said. In other words, if brands can translate their best salesperson’s explanation of the product’s features and benefits via images and text, they will be in a good position.
It’s also a great source of customer feedback. Willkom suggested using customer feedback and questions being asked on Amazon to seed content for blogs and social media posts.
Encourage actions that will boost your listing. The more “weight” a listing has, the more likely it is to appear in a shopper’s search. No one knows exactly how the Amazon algorithm works, but Principe shared these basic ideas: positive reviews add weight, sales velocity adds weight, and additional things you might not even think of—like how many images are on a listing—add weight. “If your bullet points and title and product description are keyword enriched, that adds weight,” he explained. “If you have video—that adds weight. Questions and answers add weight.”
All of the experts stressed the importance of positive reviews. “Amazon has strict rules on incentivizing reviews, so you do have to be careful about that, but there are ways to navigate that,” Cooper said. For example, many brands send follow-up e-mails to customers who buy products to encourage them to leave a review.
Another pro tip from Principe: Under each review is a line that says, “Was this review helpful to you?” along with a yes and no button. “The more people give a review a thumbs up—whether it’s a positive or negative review—the more weight that review gets,” he said.
Rethink packaging. Most brands design their packaging to be attractive on the shelf. But on Amazon, customers don’t see that packaging until they open the box. “You can present the product digitally in so many different ways, but you don’t necessarily need super fancy, large, boxy packaging, because nobody sees it,” Willkom said. He challenges the brands he works with to rethink how they innovate in packaging for online first, instead of just taking what they currently sell in brick and mortar and trying to put it on Amazon.
“Packaging is absolutely part of the conversation,” Cooper reiterated, noting that the sustainability element is increasingly part of that conversation, too. “We’re seeing more companies go the recyclable and biodegradable route, with a lot less plastics.”
Join us for our Disrupted Retail Summit at Natural Products Expo West.
When: 10:30 a.m. - 2:45 p.m., Thursday, March 8, 2018
Where: Marriott, Grand Ballroom F