September 12, 2023
August 5, 2022
This article was written by Podean Global CEO Travis Johnson and originally published on The Drum on April 16 2021. Full article can be found here.
Cast your mind back to late 2019. At Podean we were having lots of conversations with big brands telling us that focusing on ecommerce and marketplaces was on their agenda, but not their top priority and not a massive driver of sales.
Then of course Covid hit the world and e-commerce deliveries were the main way many Americans could receive the products they needed in their life. Amazon was a clear beneficiary with 2020 net sales growing to $386b, a 37.6% increase from $281bn in 2019. Many brands (even those late to the party) saw substantial year-on-year ecommerce growth – 40%, 50%, 80% and even 120% growth was not uncommon.
But is the pendulum swinging back?
The growth many brands enjoyed in 2020 is unlikely to be replicated in 2021. Brands currently selling on Amazon are facing five clear challenges:
It wasn’t just a couple of brands that realized they need to focus on ecommerce and marketplaces during the pandemic, it was hundreds of thousands of new sellers. More competitors means it’s harder to maintain top rankings, and more competition for advertising placements drives higher advertising costs and lower share of voice leading to a lower share of shelf.
Marketplace Pulse suggests there are 9.8 million registered sellers globally and 1.9 million active. They estimate that in 2021 so far 354,000 new sellers have joined the platform – being 3,408 new sellers every day, or 142 every hour, or even 2 every minute. These competitors are also more sophisticated, better prepared and optimized for Amazon. Brands expecting to achieve stratospheric growth on Amazon just by riding the wave are going to be disappointed.
Amazon has also expanded their own retail presence globally, adding Sweden and Saudi Arabia in 2020 and they’re now present in 20 countries. With every new geography Amazon adds they also source and cross-sell products between markets. For example, a product they buy from a local brand in the UK will likely be offered for sale to Swedish customers. So your competition on Amazon isn’t just against other Amazon sellers, it’s exacerbated by Amazon themselves.
We hear from clients that the vendor negotiations this year have been particularly “robust” with marketplaces (especially Amazon) demanding significantly higher margins and concessions. Co-op marketing fees are increasing, payment terms lengthening and other services such as paying for a Strategic Vendor Services (SVS) manager or merchandising placements are being mandated. Indeed we have heard that Amazon is framing that the only way to even have a full negotiation with them is to pay for SVS services.
Brands also need to leverage their agency relationships and broader knowledge to understand benchmarks for their negotiations. Sometimes a brand may be relying on their own past experience and not aware of other concessions that might be more beneficial to their business.
Skyfii is a leading provider of wifi and analytics to shopping malls across America and measures foot traffic among other metrics. In January to March 2021 they saw mall traffic rise 45.3% representing millions and millions of extra shoppers buying from bricks-and-mortar retailers. During this same period overall retail sales did not increase by the same percentage, meaning there is a shift to people decreasing their ecommerce spend and buying more items in-person.
The latest round of $1400 stimulus checks were delivered starting at the end of March and will flow to most eligible Americans by the end of May 2021. In the weeks leading up we saw retail sales drop off – likely people waiting until the check arrived before spending more.
This was reflected in National retail sales that saw a drop of 3% between January 2021 and February 2021. Online and other non-store sales decreased 5.4%.
March retail data – just released on 15th April – showed the considerable impact of stimulus checks. Retail sales in April jumped 9.8% higher with motor vehicles and parts, sporting goods, clothing and food and beverage leading the gains contributing to the best month for retail since the May 2020 gain of 18.3%, which came after the first round of stimulus checks. US Jobless claims added to the good economic news, with first-time filings for unemployment insurance plunging to 576,000, easily the best week since the beginning of the Covid-19 pandemic.
Suffice to say, these wild monthly swings significantly impact consumers, their spending patterns and makes forecasting for brands quite a challenge.
Ships are stationed off the coastlines around the US and all aspects of receiving and transporting goods are under pressure – in terms of both the timing, and cost, of imports. Many brands are struggling to keep products in stock.
Using Google Trends as a macro view on people searching for the term “Amazon” we saw a decline of approximately 7% across the first months of 2021.
Using more precise data, SimilarWeb saw a dip in total Amazon views during the February and March months by approximately 10% versus the January starting point. From late March (also likely impacted by stimulus checks) page views look to be trending upwards.
When we look at year-on-year comparisons, SimilarWeb reveals an interesting story.
Between Jan 1st and Mar 31st, year-on-year total Amazon units sold increased +35%, page views increased +32% but revenue only +24% inferring a lower average selling price for brands on the platform.
When looking at some specific categories the data is more pronounced. For example, pet supplies during the same period experienced +43% product views but category sales revenue only increased +15%. For makeup and cosmetics page views were +11% but revenue declined -5%. For computers and laptops pageviews declined -4% and revenue declined -5%
So with all of this data and insight, what should brands do?
This article was written by Podean Global CEO Travis Johnson and originally published on The Drum on April 16 2021. Full article can be found here.
September 12, 2023
September 12, 2023
August 5, 2022
Emily…
James comes to Podean with a wealth of marketplace knowledge having worked at Amazon Corporate for 5+ years. He worked in many different roles and groups during his time there from Seller Support to Vendor Management. From recruiting and onboarding 3P sellers to new categories, handling highly escalated executive level contacts, and managing vendor relationships he brings an inside understanding of how Amazon works. James is passionate about online retail and brings a client and customer centered approach as the Head of US Retail Operations. Before his e-commerce focused life, James worked across industries that have always focused and delivered results in customer service, account management, and inventory management.
With more than 15 years of experience Alejandro has led some of the most edgy projects in the LATAM region and has built-up high-performance teams from both agency and brand sides. Working with Havas he put together a Consumer Engagement unit for Pepsi. He led a WPP digital solution for L’Oréal and while working with Mediacom he redesigned Coca-Cola’s media team. Most recently he was a fundamental part of Danone’s media transformation into a brand salience unit. He was born and raised in Mexico City, loves being outdoors, listening to music and spending time with his 7-year-old daughter.
Danielle leads media globally for Podean. She previously led the Amazon and e-commerce division at performance marketing agency, Merkle (part of Dentsu). Danielle has deep expertise across all facets of Amazon advertising – DSP, sponsored ads, audio, out of home and beyond. She has delivered significant growth for some of the world’s largest brands including Nestle, managing tens of millions of advertising spend on their behalf.
Before Podean, Travis Johnson was Founder and President of Dentsu’s Amazon-focused consultancy, Sellwin. Prior joining Dentsu he was Global CEO of Ansible Mobile in New York, and also held CEO positions in Australia for media agencies UM, Initiative and Cadreon. He was an Adweek Media Allstar in 2017 and has won over 50 International Awards across his career.
Maddie leads our client management team and also marketing for Podean. Maddie’s team operates as an extension of our client’s teams – anticipating their needs, thinking proactively, and always delivering on time. Maddie is also responsible for all aspects of Podean marketing, from blogs and email newsletters to PR, content, and advertising.
Lizzy manages the Podean media team across any, and every, media solution offered by Amazon and other marketplaces. Whether it’s search/sponsored ads, DSP display and video, Twitch, audio or activations we have the experts to deliver. Every client that her team has worked on has seen a step-change in media effectiveness and sales versus their previous operations.
Jonathan Hawkins leads Podean’s European operations, working with clients spanning all categories. His team assists brands with every aspect of setup and optimization across the region including supply chain advice, logistics, retail operations, analytics and media management. P Before joining Podean, Hawkins was Commercial Director of Square Up media, owners of media properties including Escapism, Foodism and Square Mile. During his decade at Square Up he led editorial, content and most recently commercialisation and sales with a focus on digital products and ecommerce growth.
We have hand-picked the best and brightest Amazon talent from around the USA and the world. Our delivery team of 6 New York based, and 17 Amazon and marketplace marketing specialists ensure our clients receive the best campaign performance. They are experts in retail management, performance media optimization, but also video, analytics, AMC, voice, creative and higher impact executions.
Ashley has covered all aspects of digital marketing in his career, having led digital media for Initiative Media Australia, then managed a team of cross-functional digital salespeople at Mi9 (MSN) and was most recently the Managing Director of ecommerce conversion optimization software company, Ve. Ashley’s leadership, collaboration skills and entrepreneurial spirit drive the Australian business.
Mark is a 20+ year digital leader and before Podean was EVP at Reprise where he successfully launched IPG’s Amazon Center Of Excellence. Prior to this, Mark led mobile and innovation agency Ansible. Earlier in his career he was the Founder and CEO of Concep, an email and performance marketing agency with offices in the UK, USA and Australia.
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