Let’s take a look at Amazon’s June 2013 launch in India. When comparing amazon.in’s natural search visibility against two of India’s largest e-commerce sites flipkart.com and snapdeal.com, you’ll see in the below graph that Amazon’s dominance has steadily increased. In fact, the company overtook both competitors in market share in mid-2016.
Of course, replication of this trend isn’t guaranteed in Australia. For one thing, Australia’s competitor space is vastly different from India’s. But what this case study does evince? All retailers would do well to treat organic search as a critical driver of conversions – online and offline.
In Australia, the opportunity to convert consumers shopping around on price or looking to try new products is ripe for the picking. (In fact, Australians who use Audible or have Kindles are a market of Amazon loyalists who are primed to shop Amazon from Day 1). Leveraging generic product keywords such as ‘phone’ or ‘laptop’, which consistently receive high search volumes, will no doubt be key.
And as Australian consumers share more product URLs, more articles link to the site (and so do more local and international commercial partners), Australia’s Amazon website will naturally increase in domain authority and organic search visibility.
Amazon has its fingers in a stupendous number of pies – operating in verticals from retail to media to IT and more. This allows the company to collect an incredibly rich data pool of audience information and behaviour.
And even though Amazon hasn’t launched in Australia yet, the company already has Australia-specific first party data at its fingertips – namely from Kindle and Audible users. This has great potential to be used in future audience retargeting programs.
Competitor spend ramps up
In preparation for the ‘Amazon Effect’, competitors have already ramped up their digital marketing activity.
Three highlights from research by Morgan Stanley:
- Retail companies are recruiting agencies and consultancies to help reposition their Facebook and Instagram accounts as online shopping channels and ‘replacement[s] for magazines’.
‘Dynamic Product Ads, company pages with pictures/info about SKUs (stock keeping units) that link users to brands’ websites, and on-platform ‘Shop Now’ buttons are all being emphasised.’
- 20,000 retailers sell products and services on Pinterest via the Buyable Pins tool. While it’s currently free for companies to do this, this is likely to change further down the track.
- Google’s introduction of shopping ads in image search results and local inventory ads has seen ‘incremental’ ad spend. Increased SEM competition should also see higher CPCs across key product terms.
What’s next for digital marketers?
The ‘Amazon Effect’ might not be the end of days as some are currently predicting. But even so, it’s still important for digital marketers to take pre-emptive action. Initiatives that showcase local advantage are key.
- Reimagine your consumer engagement strategy. Aim to make purchase, fulfilment and issue resolution as frictionless as possible while adding extra value – be it through personalised messages, service or purchase incentives that match up with where they’re placed in the path to purchase.
- Use a CRM tool to collate customer data and better manage customer relationships. Nurturing lasting relationships is the name of the game. By being proactive, you may be able to mitigate the number of customers who trial then make the permanent switch to Amazon.
- Leverage a Data Management Platform (DMP) to enrich your customer data and drive media efficiencies.
- Clearly articulate the key differentiators of your products and services to ward off commoditisation. For instance, are there benefits to buying local versus grey market?
- Monitor your Amazon reseller activity to ensure your direct offering remains competitive.
Special thanks to Klaus Germann and Mohammad Heidari Far for their contributions.