Marketers can still gain success for their brands on Amazon with the right strategies, even though it’s an increasingly competitive place for sellers.
Brand building platform Heyday has partnered with many successful D2C brands, focusing their efforts centrally on Amazon to build customers and awareness. Their fine-tuned strategy helps new brands grow, and since their start in 2020, Heyday has also acquired several of these brands, and received $800 million in funding from investors in the process.
Amazon is still the space to launch brands despite intense competition
Amazon remains a leading site for D2C brands and e-commerce sellers, claiming around 40% of online sales in the U.S.
For brands, that means it’s still the place to launch products and connect with customers.
“Our core strategy is to be a next-generation consumer company,” said Reema Batta, Heyday’s CMO. “We are marketplace native, developing durable, accessible home brands.”
As Heyday recently announced, they are also focusing their strategy on brands in key categories, including health and beauty, home appliances and sports and outdoor brands.They’ll partner with new brands to get them off and running on Amazon. And they will draw on their expertise in this marketplace to acquire brands they’re confident they can continue to grow.
“Our approach has been the same from the very beginning,” Batta explains. “We will acquire brands we find are a good fit with a high conviction that we can 10x them.”
Competition from knock-offs and Amazon generic brands
The amount of competition on Amazon can be discouraging for new brands, but the payoff from executing the right launch strategy can be rewarding.
E-commerce veteran and Amazon expert Jason Boyce, author of The Amazon Jungle, says that established brands and newcomers avoid Amazon at their peril. That’s because consumers are already searching to buy these brands on Amazon, and sellers are waiting with steeply discounted inventory, generic alternatives and even knockoffs that will eat into the brand’s market share.
“The way to protect yourself is to develop your own brand and be different,” said Boyce. “You are on much more solid ground when you defend your brand against, for instance, Chinese factories and Amazon itself.”
The reality about Amazon today is they develop their own in-house products to compete with top-selling brands on their site. A report last year suggested that Amazon went even further with their operations in India, using data from sellers on their site to make their own brands more competitive.
Given all this competition, the best path for brands to take, according to Boyce, is to provide a better value proposition for customers and to develop a higher-quality product. Customer engagement, user comments and sales on Amazon generate the data that marketers can use to maintain their advantage in the face of all this competition.
Using data signals for brand-building
“Collecting data on the performance of the brand you launch, the reviews and revenue, creates a very powerful feedback loop,” said Batta. “Also the Amazon marketplace gives you quantitative feedback on pricing and qualitative feedback about the product and packaging from comments.”
Using this data, marketers can improve their performance and rise through the ranks on Amazon.
“Every platform has different signals, they all have their nuances,” Batta explained. “It then depends on marketers and the founder to figure out how to leverage the platform for their benefit.”
Amazon is the preferred platform for Heyday because they believe that Amazon is underutilized by big brands such as consumer packaged goods that focus on traditional retail channels.
“Amazon is important for us because it provides all the benefits of scale and go-to-market, and unlocks new kinds of insights,” Batta said. “I would argue that Facebook and Google lack one very important thing and that is the ability to transact on their platform. Amazon brought all of that together, one step closer to a closed-loop customer journey, which is an incredible thing.”
Graduating from Amazon
Once a brand is launched on Amazon, marketers begin the feedback loop by analyzing the marketplace data and leveraging this for product development and branding.
In addition to product development, Heyday’s platform also puts this Amazon performance data to use for omnichannel expansion. They also entered a partnership with MIT’s Center for Transportation & Logistics to boost the platform’s inventory optimization capabilities.
As a brand gains more market share on Amazon, it can develop new distribution and media channels, and also drive traffic to its own D2C site. From there, it can independently build deeper connections with customers through its own branded channels, or expand to traditional retail relationships with brick-and-mortar stores.
But the key insights come from committed Amazon buyers through their star ratings and reviews.
“Initially it’s the commentary in Q & A sections on Amazon,” said Batta. “What are they using it for? These are very helpful comments from those who purchased the product. It helps marketers understand usage. There are all these incredible insights from reviews.”
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