Amazon own brands due to grow in 2018

Most people think that Amazon is just an online store for other companies and their products. Starting from humble eCommerce beginnings just selling books, the modern day retail behemoth now sells nearly everything from fresh produce through to antique furniture.

But most people don't realise that Amazon also currently owns about 45 brands and gets around 15% of its private-label sales come from them. For a breakdown of these see my earlier post: Amazon's own brands

And 2018 looks to be the year that Amazon truly evolves from a marketplace that just sells other brands, into a fully-fledged super retailer that owns the entire retail supply chain.

For more detail on this, take a look at the recent report from One Click Retail:

http://oneclickretail.com/amazon-private-brands-year-end-review/

Whatever next? 
How about Amazon buys Costco, the $83 Billion global retailer who has its own Kirkland brand sold predominantly across its stores?

Amazon's own brands

Did you know that when you shop on Amazon you are now increasingly likely to see Amazon's own brands appear?

Do any of these seem familiar?

Don't base digital shopper activity on ecoupons.. yet

Research just published shows the growth of electronic coupon usage slowing. Does this mean the predicted dominance of ecoupons has stumbled before it's learnt to run?

In a recent report on this subject the use of money off coupons has now grown in usage to cover 90% of all consumers.  However digital coupons have only grown in use by 9% over the same period. 

It therefore seems that paper-based redemption methods are more popular than ever, but that ecouponing hasn't got the mass adoption it should have.

Why is this? 

Here's a couple of possible reasons:

1. Retailers don't support them
The major supermarkets have so far failed to embrace digital vouchers. Even my Tesco Clubcard app on my mobile phone, which uses a simple bar code shown on the screen, only works on a limited number of their scanning tills (and none of their smaller local stores near me, which seem to be the type growing in number right now). Yet I walk in with a handful of paper - based ones (from newspapers, magazines and even self-printed at home via sites such a supersavvyme.co.uk) and they all bleep through with no problem.

2. Brands are slow to use them
Perhaps as a result of the point above, even the major FMCG brands (typically the early adopters of these sorts of things) have not taken up the opportunity to use electronic coupons in any sizeable numbers.

 

Perhaps when both the retailers and brands collectively get their act together on ecouponing, then there will suddenly be lots of  uses, linked in with tracking and other eCRM initiatives for the ideal digital shopper marketing campaign.

Digital Shopper Marketing - the new influence

The world of retail is now multi-channel and customers now shop across a number of different devices, at times of day to suit them and in different ways to how they used to (convenience vs. cost, etc.).

 

The area of Shopper Marketing, which originally looked mainly at things such as the in-store path to purchase has now started to merge with the eCommerce / multi-channel retail and even online marketing. This has formed the relatively new discipline of Digital Shopper Marketing.

Here's my take on this:

1. Brands, by placing themselves between the channels of influence and the point of retail (e.g. the store), can affect the buying decisions of the customer
2. A lot of customers now use the Internet to inform their buying decisions (e.g.recommendation and comparison sites, social media, brand micro-sites, etc.)
3. The digital influence doesn't just happen at home and in-front of a static PC these days. Users search sites at work, they have laptops when on the move, they use tablets in bed and over half of the UK population now has a smartphone.

So how can brands disrupt a consumer and get the maximum affect? Well this depends a lot on what consumers you are targetting, their shopping preferences and the mix of marketing that is required.
For example, a particular segment (let's call them "shopper savvy mums") are more interested in ways to:

• Saving: Using vouchers to make the family budget stretch that little bit further
• Sharing: Commenting and gaining opion via Social Media
• Sampling: Trying new or improved products to optimise spend and overall family well-being

The secret for digital shopper marketing suppliers is to find out what works for their client's target audience. And I''ll leave you to find out how to do this for yoursleves.

Multi-channel retail meets Shopper Marketing

For many of us who come from the digital world, the mere existence of a whole area of retail analysis called Shopper Marketing is a bit a surprise.
http://en.wikipedia.org/wiki/Shopper_marketing

And even those like me who are aware... but talk, write or generally think about multi-channel retailing, tend to focus on digital first and in-store second.

But if the statistic in that above Wikipedia article that '70% of brand selections are still made in stores' is to be believed... then online needs to get realistic about the influence it really has at the point of sale. Now I've no actual evidence to contradict this figure, but it does feel a rather high percentage... given that a lot of people will already have made their choice up about the brands they want before they get to the point of purchase.

Over the last few months I've built up my understanding of Shopper Marketing, having worked alongside an agency that specifically does that sort of thing. I actually have to admit I am actually quite impressed with some of the outputs of their work; producing empirical results from their in-store analysis which puts a lot of website testing to shame. For example, heat maps are carried out on different product aisles in various stores from a selection of viewer angles.

In short, digital user experience practitioners could learn a lot from the effort that goes into store planning (where to put products and how customers get to them).

So it does raise the important issue of how these two disciplines come together to:

• Understand the roles that in-store and online now have
• Map the Paths to Purchase (both Digital to Store and Store to Digital)
• Grow customer loyalty and retain existing customers

In short, multi-channel retail / eCommerce and shopper marketing now need to merge into a single area of specialisation... Multi-channel shopper marketing.

Ignore it and it will go away... right?

A friend of mine works in a place where the understanding by big organisations and brands of social media and digital communications are not as developed as those of say the USA and Western Europe. He’s facing the problem where his potential clients simply don’t see the benefit of communicating with digital audiences, especially on negative issues.

This is something that I thought had bee addressed on a global scale a few years back. So I was a little surprised to hear that the large organisations he is talking to still have an “ignore it and it will go away” attitude.
So what should he say to those he is pitching to who believe they can ignore negative sentiment and that online comments cannot affect a brand?

So let's take each part separately:

 
1. Ignoring negative sentiment

• Remember that any comment (negative or positive) stays on the Internet for as long as it is hosted. This means that content posted to popular blogs and social platforms could stay there indefinitely. You can no longer bury bad news on the web!
• Search engines love popular, relevant & regularly-updated content, therefore its possible that a popular negative article or blog posting could affect a brand’s organic rankings (meaning they could even get deposed from the top of Google for their own brand terms or more realistically that more SEO budget is needed to keep them there).
• Those people who post negative comments don't go away, they pop up at any time and continue their comments (especially if there is new activity around the subject)
  As an example of this, I once had a prospect who had the same negative TV clips uploaded to YouTube about them. They wanted to send a lawyers letter, I wanted them to film a response. (They eventually did what they wanted and the same clip then appeared in several other places online).
  These have been called Badvocates (Bad advocates), the opposite of brand ambassadors, and I even blogged about this in 2009:
  http://press20.blogspot.com/2009/10/are-you-brand-bashing-badvocate.html
  So you should expect the same sort of passion that your most prized followers and fans have... but in reverse. 

2. It's impossible to impact the information about the company or brand

Ha ha ha.... that's both arrogant and ignorant in this modern world

For a really good example of this from several years back (but that is still relevant today) check out the case about "Dell Hell" that I have blogged about a few years back:
http://www.guardian.co.uk/technology/2005/aug/29/mondaymediasection.blogging
http://www.customerthink.com/article/you_can_learn_dell_hell_dell_did

In short, Jeff Jarvis wrote about bad service from the PC manufacturer and it snowballed into a huge customer service & reputation issue for Dell. In the end Dell decided to address this and eventually set up a focused social media team to monitor, address and grow engagement across the web.

Now why would Dell do this? Because it was creating a negative effect on its brand and its revenues.....

A few years on from Dell Hell there are now loads of examples about how brands have had to spend lots of money to counter negative publicity that either started or grew online.

For example:
http://www.bulletproofblog.com/2008/11/19/motrin-moms-show-their-social-media-savvy/
http://www.bulletproofblog.com/2009/07/28/youtube-video-targeted-at-united-airlines-strikes-a-chord/
http://www.directorship.com/dominos-discovers-social-media/

Sure, you can spend your way out of trouble each time to try and bury/block/buy strategies. But that can be both expensive and reactionary, neither of which are approaches that the shareholders of large companies appreciate.

Taking the 20th century view that these issue will just go away over time is no longer the way to communicate, engage and grown your business.

Brand fragmentation

Shouldn’t brands actually be fragmented?

This was the questions was apparently posed of ‘The Business Week Guru’ Bruce Nussbaum by David Armano over dinner (Its nice to know that some people can still afford that luxury)

The question is relevant when you have the same product used by different customer segments. Wouldn’t it be better to have two different marketing approaches? This means: Two different media strategies, voices, etc.

As with everything about communication, it comes down to relevance. In other words speaking (and listening) to people in the way they want.

How many auto brands do you need?

Now, most of us recognise, buy and have affinity with some brands. They are crafted to appeal to specific factors (e.g. demographic, attitudinal, aspirational, etc.). We're probably all aware to some extent that a lot of brands out there are owned by the same parent company. In fact in some markets these brands even compete for your attention and £'s.

Some examples:

1. Banking: NatWest & RBS:
   Different banks, different branches, one owner (RBS)
2. Auto insurance: Direct Line, Churchill, Privilege:
   Differently targetted customers, different pricing and one owner (RBS again)
3. Car manufacturers: Fiat, Alpha Romeo, Ferrari
   Different products, different country prominence and one owner (Fiat)

Note: Apparently you can still buy a new Alpha in the UK!

But what happens when you start cutting back your brands?.... What impact does that have? Well this is now happening in the USA with General Motors, who have announced in their 'viability plans' for long-term success to the US Government, these include:

• No longer making any new Saturn cars from 2011
• 'Considering the options' for Pontiac (e.g. cutting models and/or merging with another division of GM)

This is already in addition to its efforts to try and sell SAAB and Hummer (Which incidentally doesn't seem to have done so well recently. Isn't it suprising that in a time when fuel costs have shot up and there is a general acceptance that the 'War On Terror' may have been a bit of a rouse...that nobody wants to buy a huge gas-guzzling military-styles vehicle right now?). Expect GM execs to decide whether to turn of Hummer's life support machine by the end of March 2009.

So... what does it mean when large car companies start killing off their auto brands?

Well.... not a lot perhaps. From what I understand about the Saturn brand, its not the most highly regarded automobile in the USA. It was originally developed in response to the encroaching Japanese offering and seen as a 'new approach'. Now they make also-ran SUV's and Euro-shelled eastern copies, so that obviously worked well . A look at their web presence will tell you how much they like their customers:
http://www.saturn.com/saturn/SaturnIndex.jsp

In Europe (and especially the UK) we've steadily killed off a lot of auto brands, such as:

• Ghia - was once an Italian design studio and sports car maker, now its used as a trim specification on the occasional Ford saloon or MPV.
• Triumph - once split from the motocycle division in the mid-1900's, they made cars of diminishing quality until its demise at the hands of British Leyland, created in 1969 and once the 5th largest car maker in the World.
• Rover - once the maker of decent and fast saloon cars (especially if you ever got chased by one of these 'jam sandwiches' as a younger driver ), now the company is 'resting' in the drawer of an Indian accountant somewhere.

So what's the moral of this story?

Well, as the British motor industry has proved, you don't need many auto brands. But then, we don't really have a British car industry any more. Could GM be heading in the same direction?

Brands & Social Media

I thought it useful to point out some examples of brands that have been successfully using social media last year. So I started looking at specific examples and came up with a few, such as:

• Cartier's MySpace Site
  http://www.myspace.com/lovebycartier
• McKinsey Quarterly on Twitter
  http://twitter.com/McKQuarterly

Then, after further investigation, I found out that other people have done this already, such as:

• Peter Kim:
  http://www.beingpeterkim.com/2008/09/ive-been-thinki.html
  Immediate Future:
  http://www.immediatefuture.co.uk/the-top-100-brands-in-social-media/

So it seems that Brands have truly woken up about social media. But whilst some of them made the jump, a lot of brands have so-far yet to crack it. Zachary Rodgers, from digital marketing site ClickZ.com says:

But these breakaway hits are by and large exceptions to the rule. And the rule is this: Marketers can't easily build awareness on social media sites -- not yet anyway.

Perhaps 2009 could be the year this rule gets broken?

Modern Brand Building

I've been getting increasingly frustrated with some companies I have spoken to and their treatmant/attitude to their own brand (I won't name them right now, as we're currently tracking their activity as part of some client reasearch we're doing).

Company1:
Has no brand manual (the logo use varies from campaign to campaign, fonts are varied, writing style is confused, etc.) yet they think they have a great brand. It seems that sales are declining in their high-specialised market right now, but this is the 'customers fault for not understanding them'.

Company2:
Has a great 'brand bible', put together less than a year ago by a highly-paid brand consultancy, yet has started to ignore these guidelines because the person who commissioned/championed the work has left (they went on to bigger & better things). They have now been replaced with someone who wants to put their own "emphasis on things".

The thoughts that my companyIdeal Interface have taken from this experience has been:

1. Document your brand (if you don't know, how are your customers going to?)
2. Take every opportunity to use your branding across all channels
3. Be consistent, be very consistent

So once again, I find myself referring to the work of Mr Paul Isakson and his thoughts on branding in the modern age:
http://www.slideshare.net/paulisakson/modern-brand-building-presentation

Vodka, Petrol & Bankers

What do these three have in common?

Well, in Interbrand's most recent research of the 100 Best Global Brands, the only 3 companies that come from the UK are:

• HSBC - Financial Services (No. 27)
• BP - Energy (No. 84)
• Smirnoff - Alcohol (No.89) - its parent company is Diageo

What relevance is this? Well, as someone from the UK, I see it as a shame that we don't have more. Perhaps its also notable that although this a Global report, 52 of these brands are based in the United States.

The rest of the World is represented as follows:

• Canada : 2
• France : 8
• Finland : 1
• Germany : 10
• Italy : 4
• Japan : 7
• Netherlands : 3
• Republic of Korea : 2
• Spain : 1
• Sweden : 2
• Switzerland : 5

Branded to death

The average person is bombarded with over 3000 brands or commercial messages per day. In fact, its now possible to show a person's day just by the brands they interact with:
http://dearjanesample.wordpress.com/2008/05/19/fun-with-brands/

Marketers have constantly had to interupt consumers far more to get their message through:

• Brighter packaging
• Bigger signage
• Attractive agents/models (sex still sells)
• etc.

But as we become more and more bombarded with these brands and their messages, we are more and more likely to filter them out.
You may see 3000+ brands/messages a day... but how many do you actually remember?
Google's Dr Cerf (who I still think was the basis of The Architect from The Matrix Trilogy) has the same view on this filtering and believes that by busing social media and influence he can create a better way of helping brands:

Brands and their human qualities

Giving brands human qualities enables their masters to understand them.

This quick video from Noah Brier on Brands & Social Media discusses the subject.



However, to keep the 'dinner party' analogy from the video, surely its not just about which brand speaks the loudest, but more about those that are most engaging and relevant.?