As Amazon, the second company to breach the trillion-dollar mark, continues its march towards global dominance in ever-expensing sectors, marketers cannot afford not to look at the potential opportunity or threat that it presents their own brand aspirations.
Using research devised by Digitas to create the ‘Map of Amazon and its impact on Modern Marketing’ it is possible to develop an ‘Amazon strategy’ that chief marketing officers can take forward to promote their own products. Sectors to be disrupted by the company so far have included: consumer packaged goods, automotive, fashion, Internet of Things, electronics, home services and entertainment.
The map has been devised using insights taken from a number of sources in order to create a visual and engaging way for marketers to plan out their use of the platform which has evolved to become a ‘maze’ of divisions, while also identifying the Experiential and Perceptual Competitions that are impacting marketing.
On the development of the map, Digitas strategist, David Carr explained: “Experiential Competition essentially means ‘creating better ways of selling’. This type of competition favours easier customer experiences that replace brands or intermediaries. It repositions them in the customer journey or gets rid of them completely. It is about offering accessibility, simplicity, service convenience, personalisation, purchase convenience, and channel flexibility to improve sales activation, fulfilment, usage and repeat purchase. It is not just about ‘time saved’ but customer expectations being met or exceeded.”
“Whereas Perceptual Competition redefines customer expectations. It means you set the bar regardless of whether your product or service competes in the category in question. Building on great customer experience it goes beyond to create a meaningful and distinctive brand with cultural relevance, esteem and saliency. The result is greater mental availability for your brand, driven by broad reach, emotions and associations — effectiveness not just efficiency.”
Takeaways from the map include:
The Power of Prime: “Amazon’s most important product is not a product but a membership. Prime’s ability to funnel new ideas to over 100 million loyal members drives growth and innovation. 25% of consumers in UK, Germany, Spain, Italy, 15% France. Amazon’s first forays into scalable grocery delivery via AmazonFresh and AmazonPantry are only available to Prime members as its hyperlocal one to two-hour delivery service Prime Now.”
Struggles in China: “The Chinese eComerce posted a 61% CAGR over 2011-2016, increasing sales by $333bn. This is driven by Alibaba and JD.com. Amazon’s declining 1% share has been reflected by opening its own store on Alibaba’s Tmall in 2015. The growth of JD and its partnership with Tencent and Walmat is a particular threat.”
Search Optimisation: “A9 is the name of the algorithm Amazon uses for product search. Brands need to optimise for Visibility, Relevance and Conversions to rank on the rst page or win the important Buy Box. Conversions are vital, A9 is a keyword-based algorithm but a product with a strong sales history will rank higher in Amazon’s search results.”
Rapidly Rising Revenue: “In Amazon’s first-quarter 2018 filing ‘other’ revenue — which it said “primarily includes sales of advertising services” — grew 132% year on year to reach $2bn. In the fourth quarter of 2017, the ad business grew to about $1.7bn, up about 60%.”
The full map can be viewed below or online here.