Amazon’s dominance in eCommerce is undeniable. Don’t believe us? As of now, 44% of all product searches start with Amazon. They also own almost half of all U.S. online retail sales – 43% to be exact.
Here’s another thing we can tell you for sure: if you’re going to be successful in competing with Amazon, you better know what you’re doing. These days, even if you’re not currently selling on the marketplace, not taking Amazon into account can lead you to a real problem with your business.
Now more than ever, it’s important to strategize and figure out what the best move for your brand and business is. The best way to start is by optimizing the way you run your ad campaigns, which can impact your business as a whole.
Today, we’re talking about 5 myths on competing with the biggest retailer in the world and what tactics YOU can employ to not only keep up with them, but actually surpass Amazon in some areas.
- Myth No. 1: You need to stay off of Amazon to compete with Amazon
- Myth No. 2: You must offer free postage to compete with Amazon.
- Myth No. 3: Prime members only shop on Amazon.
- Myth No. 4: Amazon’s prices are unbeatable.
- Myth No. 5: Amazon is convenient
- Leverage your awesome Customer Service
- Use Google Shopping to push gateway products
- Take Branding into account in ad copy
Myth No. 1: You need to stay off of Amazon to compete with Amazon
In fact, you don’t. There are three things you need to consider when asking yourself if you should or shouldn’t stay off of Amazon.
First up is value proposition. You might think you have a strong brand, but is it strong enough to stand on its own? You can’t just assume that what you’ve been doing branding wise is sufficient. Is it memorable? Does it make you stand out from your competition? Can you rely on it to fuel your marketing efforts?
Secondly, ask yourself: can you leverage assets that you already possess to create a stronger, overall business outside of Amazon, instead of on it? Do you have the time, team, effort and means to do it?
Third and last thing to consider is the margin. The main goal of staying off of Amazon is the higher margin you’re going to get. And you will get it, mostly, as long as you can keep your marketing costs down. The main question you have to ask yourself is whether that outweighs the potential sales gain? Is it more important to reach as large a market or have as large a sale?
Bill Nicolai, a well-known marketing entrepreneur and innovator spoke in an interview about the how brands should always determine first if they absolutely require independence. He offered up an example about one of the brands he’d been working with for years.
At his recommendation, the brand started selling their products on Amazon but quickly figured out that the business was unprofitable. With an average order of only $35, the marketplace’s fees and shipping costs were killing them.
Instead, they decided to close the store and raise the price to marketplace sellers, in order to make up for the loss on the wholesale. Since there was no shortage of people willing to sell their products on Amazon, for a very small profit, the brand decided to supply the product, while the buyers took care of everything else.
That meant that customers could get the products, the brand made their wholesale business AND was featured on Amazon, all at the same time. They take the profit and others pay the costs.
Another strategy that might work for you would be only selling a limited product range on Amazon and keeping the top sellers for eCommerce store.
Sponsored Product Ads VS Google Shopping Campaigns – which should YOU use?
Myth No. 2: You must offer free postage to compete with Amazon.
You’ve heard it over and over again, but it doesn’t make it true. Free postage is not only not necessary, it can also prove to be a disaster in the wrong hands, as the amount of revenue and margin that you lose could end up taking most of your profits.
Instead, try offering a shipping threshold – $50, $100 dollars or more, depending on product type and price. This allows you to get a large enough Average Order Value that will make up for the lost margin with additional merchandise sold. In fact, Amazon does this too, since it only offers free shipping over $35, if you’re not on Prime.
A solution that actually works is having a reasonable shipping chart that actually covers your costs. If possible, find a way to offer same-day delivery to your local customers, through delivery apps.
Myth No. 3: Prime members only shop on Amazon.
This is something that’s simply not true. Prime members are, in fact, very high-volume consumers. They are smart retail consumers that will research prices. They’re also available to shop anywhere, if the offer is worth it. What’s actually important to them are service considerations.
While some users begin and end their search on Amazon, meaning they don’t look elsewhere, millennials are learning that the platform isn’t necessarily the best place to buy.
These days, Prime members are a bit savvier and they’re going to spend a bit of time searching around to get the best deal.
Since they’re clearly already a fan of subscription services, try advertising your own to them. Beauty stores can offer up a monthly renewal at a better price and fashion online stores can offer up bundles, allowing the customer to shop the entire look, instead of just one piece.
Bundles is actually an area that Google Shopping can prove useful for. By optimizing your titles and feed description, you can adapt your bid competitiveness to push your bundles out in front of shoppers. Grouping products and raising their bids is also a good strategy in raising your Average Order Value.
Another way of competing with Amazon for Prime shoppers is product selection. Depending on your industry, some manufacturers can create products that are exclusive for your store, based on your sales volume.
Some of our clients offer exclusive Puma or New Balance sneakers that can only be found on their online retail store. When you’re carrying products that Amazon doesn’t sell, you’re outselling the platform itself.
Myth No. 4: Amazon’s prices are unbeatable.
You might be surprised to hear this but, these days, that’s often not true.
Many retailers feel that they have to actually charge more for their products on Amazon to make up with the withering costs of FBA and the 15% typically they have to pay the marketplace.
Even if they use a comparison engine to lower their prices, after they do there’s often no profit left. This can also apply to you, meaning that offering the lowest price on your eCommerce website is not necessarily the best answer.
Instead, try offering competitive prices. Not the lowest, but still within the market. To optimize your ads, try using Shopping Merchant Promotions on your Google Shopping campaigns.
It’s a free feature that allows you to distribute online promotions and make your Shopping Ads stand out from the competition.
Google Shopping promotions are eye-catching and catered specifically to online shoppers. You can even offer free shipping for a limited time only on certain products.
Google Shopping Actions – Find out how to start selling on the NEW marketplace by getting in touch with an Adfix specialist!
Myth No. 5: Amazon is convenient
Sure, if what you’re interested in is a simple transaction, where you decide exactly what you want, you order it and you don’t have to talk to anyone and you don’t need any additional information, that may be convenient.
On the other hand, if you need to discuss with a knowledgeable person about a product or need more details before you make the purchase, then Amazon is pretty hopeless.
They don’t take phone calls or provide any other information than what’s featured in the copy and reviews. Also, they can sometimes not be convenient in terms of returns. Most people don’t know that it may be a 3rd party that’s actually handling the return, so a customer may not hear back from them for a while.
Most businesses offer products that require consultative service prior to purchase – that’s when you need to talk to someone about how to use something that you’re buying.
Try to take advantage of the areas where Amazon is lacking. You take phone calls, they don’t. More than 50% of searches are now done via mobile, with many eCommerce stores taking orders or providing guidance by phone.
In the end, there’s a level of convenience that comes with the ability of being able to talk to someone that cannot be recreated on Amazon.
How do WE compete with Amazon?
Now that we’ve debunked these 5 myths, you may start thinking competing with Amazon just got a whole lot easier.
Still, you need to remember they’re the number one retailer for a reason. Let’s talk about what WE do for our clients to help them compete with Amazon.
The key here is personalization in all shapes and sizes, in all areas. You need to give people a better reason to shop through your site instead of a marketplace.
Our strategy involves targeting specific keywords and audiences, sending them to the right products and implementing an overall personalized paid digital marketing strategy to make sure our clients stay competitive.
There will always be competition. But as long as we’re getting the ROI, it doesn’t matter who that competition is – Amazon, ebay or other venture backed retail chains.
It’s not only about the sales you’re getting today or tomorrow. The end goal is increasing your Customer Lifetime Value, building a database and leveraging your audience, either by reaching them with direct marketing or by including them in other campaigns, with retargeting or lookalike audiences.
Next up, let’s take a look at the main areas we target to give our clients an edge in competing with Amazon, based on the way they market their products.
Reach the right audience, at the right time. Set up a FREE consultation.
Leverage your awesome Customer Service
Customer service for the sake of customer service is not going to work. Substandard, uninterested, unengaged interactions just won’t cut it. Truly great consultative service, however, can be a differentiating factor for your brand. Here’s how you can leverage your excellent customer service through ads.
Add product reviews in Google Shopping and use Google Customer Reviews to feature in Seller ratings on Search ads to stand out from your competition.
If your brand has been featured in any publications, you can even paraphrase and use the feature in a review extension on Search Ads.
Try to own the entire experience: make sure the customer has a positive, consistent experience from beginning to end. This is what omnichannel marketing is all about – a seamless and consistent experience across channels.
Use Google Shopping to push gateway products
When it comes to competing with Amazon, having more targeted campaigns and messages as well as better product pages for your Google Shopping campaigns is key.
But instead of trying to compete with Amazon on all your products, make a selection of your most relevant and eye-catching offers and use Google Shopping to interact with your customers and draw them in.
You have real product experts that can help buyers, handle returns and generate relevant content. Most Amazon listings, however, are actually made by 3rd party sellers, meaning some are better optimized than others. This can prove especially relevant in the case of Google Shopping Ads and can lead to you having an advantage over Amazon in this area.
Remember, the more optimized your data is, the more likely your content is to show up for relevant queries.
The best way to ensure that your product feed is optimized is by using keywords in your titles and descriptions. That way, you can get a leg up on similar ads that are less personalized and feature more general terms.
Your campaign structure should maximize your Google Shopping return, and you should shift budget to the most impactful keywords for your business.
You can’t target longtail terms in Google Shopping, but you can add negative keywords that your ads will not show for. This way, with the right campaign structure, you can have a segmentation of the searches your Shopping campaign contains – non-brand vs. brand searches, specific product searches or general searches.
This is a great way of lowering overall campaign costs and increasing ROI.
Take Branding into account in ad copy
We’ve worked with clients that thrive off of Amazon, grow strongly and are highly profitable. How? Through simple and consistent branding, that extends to their paid digital marketing, with an experience that is totally unique and cannot be duplicated on Amazon.
They have customer service that goes way beyond what Amazon offers, with live order assistance, no phone tree and no wait. They also work with us in crafting ad copy that is extremely relevant and targeted to their audience. None of this is a policy that Amazon would ever do or be interested in doing.
Branding matters – paying attention to your brand and making sure that your offer is reflective of your brand story is key.
Amazon’s huge campaigns mean that they cannot take the time to carefully process their ad copy and be specific in their targeting. We take advantage of that and so can you.
In your campaigns, try targeting longtail terms with a higher intent, where you can afford to spend more per click and you get a better value from each one.
What Amazon’s missing in terms of branding is the human factor. In designing their campaigns, they go for volume, but you can go for quality. As an expert in your particular niche, you can craft a better ad and reach a better audience.
These days, even if you own an established eCommerce website, you’ll likely find yourself jockeying for visibility against the biggest competitor you’ll meet. Things are very different in this new Amazon dominated era, but the old truths still apply.
Branding matters more than ever, niche markets are on the rise and reaching the consumer directly in their search results is key to getting ahead of these competitive marketplaces.
Unique product and personal service still prevails, but investing in paid marketing channels such as Facebook, Instagram and Google Shopping is a huge opportunity to also grow brand awareness, traffic and conversions on your eCommerce website.
There are situations where competing with amazon makes a lot of sense. But sometimes, instead of trying to compete with Amazon, you could try to understand what actually makes Amazon win in the first place and apply their strategies to your brand and business.
Have more questions? Get in touch with us now and we’ll help you accelerate your business!