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PRESTIGE BEAUTY AND AMAZON: QUESTIONS, CONCERNS, AND TACTICS

May 14, 2021 Kelly Kovack
May 14, 2021
Gabrielle Henderson via Unsplash

Harnessing the power of Amazon to fuel growth while protecting brand positioning and retail relationships is not only possible, but proven. Contrary to popular belief, Amazon can be a platform for storytelling, discovery, and profitable customer acquisition. When done right, it’s a channel that adds tremendous financial value.

The fact of the matter is that if you are a brand, especially a popular brand, your products will find their way onto Amazon. Unless you have an intentional strategy to do something about that, it will get out of control and eventually will have a negative impact from a brand equity point and financial point of view. Amazon cleanup is a time-consuming and costly effort that looks a lot like a game of whack-a-mole.

Not so long ago Amazon was a no-go zone, especially for prestige beauty. A couple of years ago brands started dipping their toes in with defensive strategies, and now Amazon is an important part of growth conversations. As brands embrace the opportunity of tapping into the power of Amazon, many have questions about the ability to deliver a branded experience and the tactics for managing the Amazon flywheel.

We tapped Amazon experts Vanessa Kuykendall, VP Business Development, and Marco Tejada, Marketing Director at Market Defense, to tackle the top questions related to brand integrity and tactics for growth.

How to give your customers a branded experience on the Amazon platform?

Vanessa: Amazon gives you many tools to create a branded experience. In your own account, you can build out a storefront that is rich with content, including tutorials, videos, and information on your values and philanthropies. Your ads can also be custom; use branded taglines and language that speaks to your customer. And do not neglect your product titles: consider adding ingredients or features and benefits to the title. You want to stand out from the “noise” on Amazon. The best way to do that is to amplify your own brand voice.

How do Amazon & D2C coexist in terms of pricing, products, and ad spend?

Vanessa: We see Amazon as an extension of your DTC strategy. Our most successful brands include Amazon in their promotional calendars, including their social placements. They create exclusives just for their dotcom, and others for Amazon. They use Amazon to try out new duos or sets “virtually” before committing to physically kitting them. They use Amazon’s analytics to guide them on new product development. When you have your own account, you can learn a lot about your customer’s shopping behavior; we help our brands use those learnings to drive strategy and innovation.

What are your thoughts on Sponsored Brands vs. Sponsored Products? Any strategy tips?

Marco: Sponsored product and sponsored brand ads are essential in protecting and growing your Amazon business. Whenever we implement a full search strategy, we ensure that we use both ad types to own all branded ad placements. It’s important to keep in mind that around 64% of clicks are captured by the first 3 product placements on a search query. Therefore, we like to make sure that we limit all competitor visibility on our branded search terms. As far as strategy tips for targeting non-branded search, we recommend using sponsored products during your “testing” phase, as the cost per click tends to be cheaper (allows the budget to last longer). Once search term “winners” are identified, we recommend introducing sponsored brand placements so that we can drive consumer traffic back to a storefront. We like to leverage storefronts to help educate the consumer while also introducing different product categories to the shopper (higher likelihood of multiple product purchases).

Are there any tactics that can increase AOV on Amazon?

Marco: The quickest way to increase your AOV on Amazon is through bundles (both physical and virtual). We typically begin bundle discussions by leveraging brand analytics market basket analysis. This allows us to analyze consumer purchase behavior data and make informed decisions when creating bundles. We also implement upsell/cross-sell tactics to increase AOV. A great strategy here is to own product targeting placements on your own product detail pages with the intent of introducing complementary products to your hero SKU.

Importance of keywords and how to use them?

Marco: Keyword research plays a pivotal role in the success of search marketing. Strong keyword research will help expedite the “testing” phase of search, which will, in turn, help make your sponsored ads more efficient. Additionally, it will allow you to take more of a hyper-focus approach on top-performing keywords and will help lower your percentage of wasted ad spend over time.

How do you get new customers to discover your brand and convert on Amazon?

Marco: We pull several different levers when targeting new to brand customers. We utilize search to capture visibility on category keywords, DSP to target in-market/competitor audiences (feed the retargeting funnel), and lastly, retarget consumers who have viewed but not purchased products in the past. In order to truly capitalize on new to brand, we really like to implement a full-funnel approach.

Does Amazon hurt the brand value and image of premium brands, especially one that has just launched?

Vanessa: The days of Amazon as a discount retailer are long gone; the customer does not see them that way. I would even suggest that the Amazon shopping experience embodies the new meaning of luxury; isn’t having your purchase delivered directly to your home in 24 hours the ultimate in luxury?

If a premium brand is concerned about price, their best option is to own their own account and sell their products at full MSRP in the marketplace rather than selling to resellers through a wholesale model. If you sell to multiple resellers, you are just encouraging them to discount so they can win the sale; you are creating a race to the bottom. If you sell to Amazon wholesale, they own the inventory and can discount if they choose to. If you want to protect your price and control the narrative around your brand, have your own marketplace account and share what’s special about your brand in a genuine way that’s true to your values.

For more learnings and insight on Building Brand Equity and Financial Value on Amazon:

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