E-commerce spending in the US reached a tipping point this past year. According to the Commerce Department and Internet Retailer, online sales were up by 17.5% for Q3 and 11.8% year-over-year in the US.
With a presence in the United Kingdom, Ireland, France, Germany, Italy, Spain, the Netherlands, Australia, Brazil, Japan, India, and Mexico along with the United States, Amazon generated worldwide revenues of ~$178 billion in 201. And with over 1 billion transactions, the company is an ideal source of big data as well as a dominant eCommerce storefront.
Amazon is a company that is data-driven. They horde data and use it to understand consumer demand, demographics, price elasticity, sales trends, and much more useful consumer predictions. And even though it can be a challenge for third parties to gain access to their collected data, Amazon may still be helpful to marketers in managing their business on the platform and in other distribution channels.
Insights from Order Data
Customers purchase directly from you when you sell on Amazon’s third-party marketplace. This creates a feed of orders containing the exact time of purchase and the location of the purchaser, as well as other important information you can use to improve your strategies. Here are just a couple of these indicators marketers can monitor using Amazon’s data.
Advertising attribution. If you buy television spots or other forms of visual media ads, you probably also use a media attribution platform to assess the effect of each spot. These systems rely on orders from phone numbers and website links that are incorporated into the ads. However, consumers do not always use the revenue channel specified in the ad, and they will check their retail and online stores to see where they would rather shop if the product is offered. Based on data, for an increasing number of consumers, the choice is Amazon.
A media attribution platform is only as useful as the data feeds to those programs. The ability to analyze optimize creative messaging, advertising campaigns of your software will be improved by incorporating orders, and right-size media buys.
PR attribution. Your public relations group is placing products in magazines, TV shows, and sites to drive brand awareness and increase revenue. Earned media (aka organic mentions of your brand in media) and calls-to-action can’t always consistently instruct consumers where to buy, so a visible web presence is crucial. The effects of a PR placement varies widely among sales channels.
In one example, a PR placement on Good Morning America, the landed massive exposure with only one placement. Sales on Amazon increased 600% in the following three days and over 100% conversion on the brand’s own site. But the company would not have understood what produced those additional sales to Amazon order info without access.
Attribution of a sales marketing. Most customers interact using a product in numerous channels prior to buying. Revenue may boost in that channel and reduce revenue elsewhere if you offer a discount through one channel. You have to measure its results, to correctly assess the effect of this promotion. Since it is so simple to compare prices from several websites, this is very crucial in channels.
One of our clients recently ran a three-day sale on their website. During the sale, earnings on Amazon fell 70%, after the sale stopped, and it returned to normal levels. While the ad produced the intended result, its financial value was lower than expected because the revenue generated on the website had been offset by earnings on Amazon.
Order volume and SKU variations. When a firm rolls out a brand new product line at retail, one common problem would be to forecast the right amounts of each variation—size, color, package size, etc.—to send to stores. Retailers have limited shelf space, so revenues are often improved by ordering the quantity of each variant significantly.
On the flip side, shelf space on e-commerce is infinite. To get a sense of how popular each product variation will be at retail, marketers can offer their full product lines at their websites and on Amazon for several weeks before launching retail distribution to assess consumer preferences, including regional differences. Retail partners will be thrilled to receive the quantities of each item variant and will reorder rapidly, as they can avoid overstocking unpopular versions.
Keyword data. With a 49% share in North America, Amazon is the country’s biggest product search engine—and marketers should focus on the keywords consumers use while buying it. But the only way to access Amazon’s keyword information would be to market through Amazon Retail, which requires marketers to surrender control on product pricing, content, and service, in addition to order information and insights.
You can get the best of both worlds by promoting through Amazon marketplace and leveraging Amazon Sponsored Products. Sponsored Products is a keyword-driven, non-invasive (PPC) platform which serves ads inside Amazon.com and pushes traffic to your listings. Merchants can use Sponsored Products to quantify keyword performance metrics such as revenue, inventory, click-through rate, conversion rate, and also the average cost of sale.
Optimizing keywords on different programs. Running a PPC strategy in Amazon is a superb way to generate extra revenue, but it is also a great way to learn how to optimize PPC campaigns on other ad platforms such as Google’s Adwords. Combining data from multiple PPC channels is especially valuable for long-tail searches, but it can take a lot of time to generate significant data. Combining data from multiple PPC platforms allows you to optimize your campaigns more quickly.
Amazon also supplies an auto-targeting program where its system picks the keywords it thinks are relevant to your products. This can help a PPC professional discover keyword phrases that are new to bid on other ad display channels.
Optimizing descriptions and SEO. PPC has always been closely tied to organic SEO, and because Google does not offer organic keyword information, PPC is the only source of accurate keyword performance information. Provide your merchandising and copywriting teams with top performing search terms and they can turn it to revenue in organic search platform. Assign great importance to the keywords that perform well on Amazon; searches in Amazon carry clear buying intent.
Customer comments and product development. There are three approaches to collect customer feedback through Amazon: customer reviews, product queries, and order feedback. Collecting customer feedback from these sources is more affordable than running customer surveys and focus groups, and is an easier and more structured supply of customer sentiment than social media networks or review sites.
To quickly create ideas for improving the quality and features of a product, read the reviews and questions your customers write on Amazon to see what they really like or dislike about these products and your competition’s products. One client that experienced large return on investment learned their own stitching was falling short of consumer expectations by studying the customer feedback on Amazon; it enhanced the quality of its own stitching — and reduced its return rate on top of that.
Queries and product descriptions. Clients frequently have a questions that they wish could be answered up until they purchase a specific item, and oftentimes, they will put off a purchase or avoid making the purchase at all if they can not find the answer immediately. In some cases, they will reach out to ask a question.
Amazon provides a system for collecting and answering customer questions before and after and it urges those queries on the item detail page for anyone to answer. For example, one the Wolfgang Puck Pressure Oven page, customers have a specific dish they want to cook and need to know if a particular model is right for the job. “How big a turkey can actually fit in this thing?” one shopper asked. A user responded, “A 13-lb. turkey did fit—best turkey I ever cooked!”
Provides data and distribution problems. Tracking the offers for your products on Amazon can tell you a good deal about the health of your distribution channels. If you are interested in controlling distribution, want to continue to keep prices profitable, care about where consumers purchase the item, and want to ensure good post-purchase support, Amazon is the first place you should look. Anyone—even unauthorized sellers—may list a product on Amazon. Monitor product offerings to find problems in your supply chain.
Amazon is also a good spot to discover sellers that may be hawking counterfeit versions of your merchandise. Let’s say that you sell a product for $6.00 in wholesale, and a person is selling it on Amazon for $6.50, including shipping. With the cost of fulfillment on Amazon is a 15% fee, that vendor is losing money on each sale, or they sourced counterfeit merchandise at a cheaper rate than your wholesale cost.
The Seller’s Advantage
The information you get from Amazon (and how much) depends on how you market your merchandise on Amazon. As a wholeseller, you have access to their data since Amazon sells their items directly and it owns its own data. But advertising as a third party allows access to more information because you can get to the consumer directly using the Amazon.com platform.