Amazon Weekly News: August 7, 2017

It's Monday! That means it's time for my weekly roundup of all major news items involving Amazon and what may affect sellers. If you want to get the current update each week, subscribe to the Bobsled Marketing blog here.

 

Seven ways brands differentiate their non-Amazon sales channels

A great article in the Wall Street Journal has detailed seven strategies that brands are using to offer what Amazon can't match and avoid unprofitability with products listed on Amazon.

Here are a few key takeaways:

  1. Eyewear giant Luxottica employs 30 staff members to monitor MAP and gray market online sellers and its investment in this area seems to have paid off with the average discount on Ray-Ban sunglasses decreasing to about 3% as of this month from 37% in April 2016.

  2. Differentiating with service: While Amazon may provide great service virtually,  it's obviously impossible to deliver in-person services like product tuneups online. Brick-and-mortar retailers can differentiate themselves from others by offering exactly these kinds of services.

  3. Stroller manufacturer UPPAbaby gives its brick-and-mortar stores an exclusive lead time on new models before launching them on Amazon, a tactic likely considered by many sellers.

 

App users can sort product reviews by keyword

By chance, I discovered this feature on the Amazon app today--it's a new ability to filter reviews by keyword. This leads me to believe that it’s highly likely that Amazon is indexing keywords from customer reviews.

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If the shoe fits…

Sales of footwear on Amazon.com are 18% higher than all of 2016, according to One Click Retail. Amazon’s shoe revenues increased 35% last year.

The shoes category is a multi-billion-dollar product group on Amazon, increasing far faster than brick-and-mortar retailers.

The shoes category is a multi-billion-dollar product group on Amazon, increasing far faster than brick-and-mortar retailers.

 

Amazon’s Antitrust Paradox

This is not a new piece of news or analysis (it was published in January this year), but I just got to reading it last week. The author argues in the Yale Law Journal that “integration across distinct business lines may prove anticompetitive” when it comes to Amazon’s dominance through the supply and distribution chain.

I recommend the article as both a cautionary thought piece and for the highly detailed analysis of Amazon’s rise to dominance by the author.

 

Amazon’s secret private label brands

A great article on Quartz this morning about Amazon's private label brand strategy. According to trademarks filed, Amazon could have several dozen private label brands, only a handful of which are actually marketed by Amazon as being its own brands.

What does this mean for brands selling on the Amazon marketplace?

Well, Amazon has always been about providing selection. To the extent that the mass-market consumer knows that they'll always find something on Amazon to meet their budget, the more those consumers will keep coming back for more. That's the good news.

This article highlights the core issue for brands:

"By undertaking this strategy, it’s further attacking small brands that probably already suspected on some level that they had made a Faustian bargain by selling on the site. It’s a lot like Nucleus, the Amazon-backed intercom startup, which eventually saw its own product undercut by Amazon’s latest piece of hardware, the Amazon Echo Show."

At the end of the day, brands should always be looking at multiple marketing platforms as well as distribution platforms, and be aware of the fact that Amazon is in the business of collecting data and using it to augment product selection on the marketplace--whether that’s with an independent brand or its own private label product.

 

Don’t forget to subscribe to our newsletter to get notified of our news roundups and blog posts This week, we’re discussing Amazon’s new Store Pages option in Seller Central and these pages can be used to showcase a brand's value.