If 2017 was the year of Amazon, 2018 may end up feeling like Groundhog’s Day. Simply put: there’s no slowing it down. But as the online retailer’s dominance continues to play out deep and wide, too many brands are caught in the mindset that being present on the platform is enough. Despite its undeniable influence, Amazon can send the smartest brands slipping. And ironically, some of these victims are the big ones — the mass-distribution brands who can’t help but default to traditional retail formulas and in-store shopper mindsets.
There’s no question Amazon’s disruption has irreversibly changed shopper behavior. In our e-commerce studio at LPK, we’ve been hard at work helping brands, big and small, crack the code on Amazon. Here’s seven lessons we’ve learned — so you don’t have to.
When you change where people shop, you change how people shop. And the results are clear: on Amazon, ‘physical availability’ becomes much more attainable for smaller brands, shaking up established means of competitive advantage. Whether by necessity or strategy, positioning your brand for discovery on the digital shelf takes advantage of shifting shopper mindsets and a new willingness to branch out of the same old schemes.
Traditional tenets of in-person stoppablity are turned on their heads on Amazon. Faced with infinite choice, mobile users will only scroll about three times (about 15 products) before moving on or making a selection. Of those, 35% throw in the towel and automatically click on the first listing. The bottom line: search rankings and visual disruption matter. And don’t underestimate the hero image: this powerhouse needs to stop thumbs, attract eyes, clearly convey the offering — and compel would-be buyers to click through.
Shoppers on Amazon tend to be closer to making a purchase than those on brand websites–even in categories like electronics and fashion. And with 55% of product searches originating on Amazon, brands who tell the most compelling stories win. Brands can put their best foot forward with clear details that focus on usage and enhanced content that reinforces product-specific benefits, value back to the shopper and the brand story. High-value content can shape behavior in the aisle, too: research suggests a third of every dollar spent offline can be attributed to a digital interaction.
Amazon reviews and FAQs offer a treasure trove of user insight. Mining existing reviews can clue a brand into key questions consumers run into over and over, or places where the experience repeatedly falls short — or wows. Amazon’s stated mission is to be the most customer-centric company on earth, so it’s no surprise that the platform rewards brands and content that put shoppers’ needs first.
Product propositions and packaging are traditionally designed for physical retail shelves, meaning bigger boxes and higher shipping costs for manufacturers — which cut into already razor thin retail margins. Brands are sometimes wary of investing in an Amazon-specific structure, but reducing shipping size by one inch can reduce costs up to five percent. And products themselves often miss opportunities to optimize for size and weight.
So consumers are buying your product online — hooray! But the work isn’t done yet. Amazon’s seemingly endless innovation pipeline is gifting brands with countless opportunities to influence consumers’ next exposure to the brand. A smart Amazon strategy shapes the next experience, from shipper design to product enclosures, voice signifiers to Alexa skills.
With nearly a quarter of Prime households equipped with a voice device, there’s still a fair amount of first mover advantage up for grabs. Today, just being a part of a user’s buying history is enough to influence Alexa’s search results. But we’re already anticipating the massive shifts when voice-led shopping inevitably reaches critical mass. Brands with complex architectures and sub-brands have an uphill battle ahead — Alexa’s bias for frictionless shopping means brands need to ask themselves how to cut complexity across the portfolio.
Like all tectonic shifts, there’s huge opportunity for brands that move swiftly to where the change is happening (and opportunity abounds) — but also risk for quick, dramatic decline.
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