5 Ways to Optimize Your ecommerce Performance with Amazon FastMovers

Transcription

1 5 Ways to Optimize Your ecommerce Performance with Amazon FastMovers Jorge Castrejon Marketing Insights Analyst at Profitero

2 Table of Contents Introduction: 5 Ways to Optimize your ecommerce Performance with Amazon FastMovers 1 Part 1: Analyzing Your Competitors 3 Part 2: Identifying Emerging Brands 6 Identifying New Entrants in a Category The Growth of Challenger Brands Identifying Seasonal Outperformers Part 3: Detecting Consumer and Product Trends 10 Identifying the Most Popular Product Keywords Identifying Consumer Trends: Voice-Activated Devices

3 Table of Contents Part 4: Identifying the Number of 3P Sellers 13 How Important are 3P Sellers? Part 5: Benchmarking Product Performance 16 Amazon FastMovers - Executive Summary Product Attributes Pricing

4 Introduction: 5 Ways to Optimize your ecommerce Performance with Amazon FastMovers With the continued growth of ecommerce, it s critical for brands to have the right information to benchmark their products against emerging competitors in the online channel: challenger brands who may sell exclusively with e-tailers such as Amazon. Profitero s Amazon FastMovers Reports analyze the best-selling products on Amazon to produce a cumulative ranking by category, delivered directly to your inbox on a monthly basis. These complimentary product performance reports are available for Amazon US, Amazon UK, Amazon DE, Amazon France and recently launched Amazon JP and include key performance metrics such as: 1 Product attributes: Star rating, number of reviews and number of images. Pricing: Average Price, Maximum Price, Minimum Price. Amazon program eligibility e.g. Prime, Subscribe & Save. Number of 3P sellers by product.

5 In this ebook, we cover 5 Ways to Optimize your ecommerce Performance with Amazon FastMovers covering highlights, key features, and use cases of Proftero s Amazon FastMovers reports. Part 1: Analyzing Your Competitors Part 2: Identifying New Arrivals in Your Category Part 3: Detecting Consumer and Product Trends e.g. Wellness Part 4: Tracking the Number of 3P Sellers Part 5: Benchmarking your Products Attributes, Pricing and Programs 2

6 Part 1: Analyzing Your Competitors By Category Amazon FastMovers reports rank best-selling products in Amazon s top 100 Best Sellers by category. To keep an eye on the competition you can use this information to: Quickly identify the top brands and products in your specific category Monitor the performance of your competitors Track emerging brands that are fast capturing sales and share Below is data from the Amazon US Watches category for October 2016, which shows a breakdown of the top five brands in a specific category - helping you to determine the level of concentration of brands by category. For example, the majority of the Watches category (53%) is dominated by the top five brands: 3 1. Casio 2. Timex 3. Apason 4. VOEONS 5. Armitron Sport

7 Part 1: Analyzing Your Competitors In contrast, the Beauty category has less than a quarter (22%) of the top five brands dominating the category: 1. Gillette 2. Dove 3. Crest 4. Philips Norelco 5. CeraVe For companies trying to establish themselves in a given category, it is critical to determine which brands have the lion s share of sales to identify where the biggest opportunity lies. 4

8 Part 1: Analyzing Your Competitors By Country Another useful facet of the reports is to identify the breakdown of competitors by country. This breakdown of top brands by category can also be crossreferenced by country to better discern global competitors versus more local competitors. Below is an example of the same category (Nappies and Diapering) compared between two different countries, the UK and US. 5 In this example, Pampers and Huggies dominate in both markets, while the rest of the best selling brands have a notable stake in just one country. For companies deciding where to focus their attention, identifying global versus local competitors provides better insight into those countries to pursue for growth opportunities.

9 Part 2: Identifying Emerging Brands In Part 2, we cover how to use these reports to analyze new competitors and emerging brands in your category on Amazon. Identifying New Entrants in a Category If you are familiar with a category, say laundry detergent, you ll have a very good idea of which brands are leading in the brick-and-mortar world; brands like Ariel and Comfort which are well-positioned on the supermarket shelf. On the digital shelf, however, the story can be very different. Let s take the Deodorant & Antiperspirant category on Amazon.com as an example. We know who the leading players are offline - the likes of Dove, Degree and Old Spice. But emerging brands that are able to quickly adapt to consumers changing lifestyles and preferences - brands that perhaps focus exclusively on selling in the ecommerce channel - are capitalizing on the opportunity that Amazon presents. An opportunity where every brand can play from a level playing field. 6 The Growth of Challenger Brands A Profitero blog post discussed the growing trend towards wellness and organic products in the online channel, a trend that is evident again in this category. Schmidt s Deodorant, a brand which offers natural deodorant, has made it into the best-selling ranking in the Deodorant & Antiperspirant category on Amazon.com, just behind market leaders Dove, Degree and Old Spice.

10 Part 2: Identifying Emerging Brands The brand accounted for two new product arrivals in Amazon s top 100 best sellers in the Deodorant & Antiperspirant category in September 2016, becoming one of the best-selling brands in the entire category - and competing head to head with established big brands. 7 Schmidt s understands the power of consumer reviews, a key driver of online conversions. Among the top 5 brands in this category on Amazon.com, Schmidt s has the highest average number of reviews by produc, 350, followed by Dove, which has an average of 299 reviews by product.

11 Part 2: Identifying Emerging Brands Amazon FastMovers reports help you keep an eye on challenger brands that are fast rising up the ranks in your category. Identifying Seasonal Outperformers Another useful way of using Amazon FastMovers is to identify seasonal outperformers in the New Arrivals section of the reports. These are products that did well over a specific month, but were perhaps not a best seller in the previous month. 8

12 Part 2: Identifying Emerging Brands In October 2016, 81% of the new arrivals in the Candy and Chocolate category on Amazon.com were bags of assorted candies, dominated by confectionery brand Hershey s which used the keyword Halloween in its product titles. 9 In categories like Candy and Chocolate, which have a strong bias towards seasonal events such as Halloween or Valentine s, it s vital for brands to identify these seasonal outperformers and to use holiday-specific keywords in their own product titles and descriptions - helping you catch the seasonal spearfishers.

13 Part 3: Detecting Consumer and Product Trends Identifying the Most Popular Product Keywords By Category Amazon FastMovers provide deep insight into products that are most popular with shoppers, ranking the top 100 best-selling products across Amazon s key categories every month. These reports also provide significant insight into the words these products feature in their titles. If we take a look at a few categories in our reports, we can identify some of the most popular keywords by category. For example, during the holiday season 2016, in the Toys and Games category, cards was the most prevalent keyword in the product title - driven by the popularity of card game Cards Against Humanity. Likewise in the Electronics category, the term wi-fi features in the product title of 28 of the 100 best sellers. 10

14 Part 3: Detecting Consumerand Product Trends For a brand that sells in either of these categories, a small tweak to how a product is listed on Amazon could have a significant impact on how shoppers find your product - and therefore on sales. By Seasonality Additional product keywords are used for seasonality. In the Candy and Chocolate category, successful brands use Valentine s-oriented words explicitly to help drive sales: Heart and Valentine s were the most commonly used words in the top 100 best sellers for the Candy and Chocolate category on Amazon.com in February In March 2016, Easter-oriented keywords also helped drive sales. In the Candy and Chocolate category, 11 product titles contained Easter, and 6 contained egg. Jumping on holiday and seasonal trends can help brands set themselves apart from the crowd, even if only for a short time.

15 Part 3: Detecting Consumerand Product Trends Identifying Consumer Trends: Voice-Activated Devices If we look at Amazon s top 100 best sellers in the Electronics category, we can clearly see the significant increase in popularity for voice-activated devices. The top four best-selling products in that category all include voiceactivation: Amazon s Echo, Echo Dot, and Fire TV Stick with Alexa Voice Remote. According to Amazon, they were the best-selling products from any manufacturer in any category across all of Amazon over the 2016 holiday season. 12 Back in 2015, however, Amazon s top 100 best sellers in the Electronics category for December told a different story. The Amazon Echo was a top 3 best-seller in the category and the Fire TV stick with Voice Remote was number 7. Out of the top 100 best sellers, these were the only voice activated products on the list - a far cry from the voice-activated dominance we ve seen in lately..

16 Part 4: Identifying the Number of 3P Sellers We already covered how these reports can help you analyze your competitors, identify emerging brands, and detect consumer and product trends. Now we will learn how to use these reports to identify the number of 3P sellers in your category - and why it s important to monitor this. How Important are 3P Sellers? Profitero analysis shows that in September 2016, 65% of Amazon s bestselling products have a 3P seller and for top level categories like Beauty, Dog Food, and Candy & Chocolate, that number can reach over 80%. This contrasts with Clothing, Watches, and Electronics where most of the bestselling products are still sold and distributed by Amazon. 13

17 Part 4: Identifying the Number of 3P Sellers However, the growing volume being captured by 3P sellers is becoming an issue that brands can t ignore. Firstly, it represents clear demand at Amazon demand that suppliers aren t getting credit for. And secondly, it can lead to loss of control over how brands are presented on the world s most influential product research platform. From a shopper s point of view, they have the choice to buy directly from Amazon or buy from a third-party seller. However, the higher the number of 3P sellers, the more options the customer has - and the harder it will be to win the Buy Box. 14 Analysis of our FastMovers reports reveals that on average, there are 33 3P sellers for each product. In highly competitive categories like Office Products, this number can be as high as 81 for each product - and for Games & Toys, 63.

18 Part 4: Identifying the Number of 3P Sellers 15 Given the growing importance of 3P sellers, it becomes relevant for brands to get insights into how your products are selling on Amazon. Profitero s Amazon FastMovers reports help you take a crucial first step in understanding the 3P dynamic in your category and identifying the number of sellers for your product.

19 Part 5: Benchmarking Product Performance This fifth part examines ways to benchmark your products using Amazon FastMovers reports, helping you to understand how your product and brand stacks up against other best sellers on Amazon. Amazon FastMovers - Executive Summary Every Amazon FastMovers report provides an executive summary, which gives a high-level overview of a specific category. Below is an example for the Amazon US Baby Category for December The breakdown of Product Attributes, Pricing, and Programs, makes it easy for any brand or product to benchmark themselves within that category.

20 Part 5: Benchmarking Product Performance Product Attributes The Product Attributes section defines characteristics of a product s performance on Amazon and is divided into three areas: Average Product Rating: The Product Ratings section is derived and pulled directly from Amazon s 5-star rating scale at the product level. Each product is rated using their suggested guidelines. Rate this item 1 Star: I Hate It 2 Stars: I Don t Like It 4 Stars: I Like It 5 Stars: I Love It 3 Stars: It s OK Each product for sale on Amazon has a star rating attached to it, enabling you to gauge that product s reputation versus the category average. 17 When we looked at our FastMovers reports, the US had an average star rating across all categories of 4.4 in December 2016, and the UK had an average star rating of 4.5. It also comes as no surprise that the leaders on Amazon s best-selling lists are usually those that carry a high star rating. For example, in the UK Baby category for December 2016, the number one best-selling product Tommee Tippee Sangenic Tec Compatible Cassette - Pack of 3 had an average star rating of 4.6 compared to the category average of 4.4.

21 Part 5: Benchmarking Product Performance Average Reviews: A high product rating is clearly a good sign for a product, but the number of reviews gives that rating further merit. These two attributes often have a direct correlation on a product s increased sales. The average number of reviews also helps you determine a reasonable number of reviews to expect for a product in your category, and by country. If you do not have a threshold for the number of reviews your product should be receiving you might end up completely missing the mark. 18

22 Part 5: Benchmarking Product Performance Here is a breakdown of the number of reviews by category on Amazon.com and Amazon UK, with the number of reviews in the Electronics category in both markets winning by a wide margin: 19 The US Toys & Games Category had an average of 1,676 reviews per product in December However, in that same month the US Electronics Category had an average of 16,959 reviews per product. Without this benchmark, you might be completely under-performing on the number of product reviews, compared to your specific category. Increasing the number of reviews for your product helps drives a product s popularity. Consumers are in tune with reviews left by their coconsumers, leading many to make purchases based on those reviews, and number of reviews.

23 Part 5: Benchmarking Product Performance Average Images: Product content is essentially your product s packaging at the digital shelf. Ensuring you have an adequate number of images to accompany your product is vital to give your brand the best chance of maximising conversion on Amazon. Again, looking at the best selling products of top level categories, we see that US had an average of 6 images across categories in December 2016, and the UK had an average of 4 images. Images help consumers interact with your product more effectively - saving them time and helping them make a better decision on the item they are about to purchase. Pricing Product pricing has the ability to make or break the success of your product on the digital shelf. Price a product too high and it might not sell. Price a product too low and you could have problems with the product being out of stock. Benchmarking your product s price to those that are in the same category could help with your pricing strategy. 20

24 Part 5: Benchmarking Product Performance Average Price: The average price of the category includes all 100 best-selling products in that category. Here is a breakdown of the average price by category on Amazon. com and Amazon UK in June and December of 2016: 21 Looking at specific categories over time helps identify price volatility due to a monthly and seasonal basis. For example, the difference between the US Watches category from June to December has an $11.18 price difference on average. In the UK, the Electronics category has a price difference. Staying up to date on a monthly basis will help with monitoring price trends in a specific category.

25 Part 5: Benchmarking Product Performance About Profitero Profitero s FastMovers reports analyze best-selling Amazon products to produce a cumulative ranking by category, delivered directly to your inbox on a monthly basis. However, these reports are just the tip of the iceberg for monitoring a product s performance on Amazon. Profitero s Digital Shelf 360 provides a holistic view of your ecommerce performance across many different retailers and countries. Analysis at the product level for product content, placement, pricing, rating & reviews, and assortment, coupled with insights from our expert analyst team, is the next step to win the ecommerce race. Subscribe to our complimentary Amazon FastMovers reports to benchmark your products across key categories on Amazon or request a demo to understand the full capability of Profitero s Digital Shelf 360 solution. 22