Customers research your products
before they buy but smart strategy can reclaim sales lost to 'showrooming' and
'webrooming' alike.
Data continues to affirm Amazon.com’s
dominance in the product-search industry. In fact,
recent studies reveal the Amazon marketplace as the place
most American consumers begin their product research. For entrepreneurs in the
business of selling products, these trends are causing major shifts in product
distribution and marketing.
Here are four reasons why Amazon’s growth in
product search matters to you.
1. Amazon shoppers are ‘Primed’ to buy.
The more than 50 million Amazon
Prime members seek to extract maximum value from their $99 annual subscription
fees. With each new item added to their carts, shoppers can further justify the
benefits of participating in the program.
Even among non-Prime shoppers,
Amazon’s minimum threshold for free shipping can be as low as $25.
Users can log in on any web-enabled device and then research and add items to
their carts in a few taps or clicks. Over the course of a few seconds, minutes,
hours or even days, customers can mix and match on their own terms. As new
needs are identified, Amazon shoppers perform additional product searches and
determine when an order is ready to be finalized. After an order is placed,
this process repeats itself over and over, further cementing the affinity for
Amazon.com.
Compare the Amazon experience to the
traditional search model, in which a shopper starts with an idea and could
spend hours bouncing among various websites. One site might offer the product
the consumer wants but at too high a price. Other sites might feature better
pricing but could be temporarily out of stock. Still others might offer the
right mix of product and pricing but ultimately fail to deliver a trustworthy
checkout process.
For these and many other reasons, consumers
are bypassing traditional search engines and turning to the Amazon marketplace
for all their product research and acquisition needs.
2. SEO no longer is limited to traditional
search engines.
For years, consultants have preached the
importance of an optimized web presence across Google, Yahoo and Bing. While
these search engines still are important to retail entrepreneurs, it's also
noteworthy to acknowledge the growth of Amazon SEO.
Granted, most merchants have less control on
the visibility of individual Amazon product listings. Amazon maintains tight
control over most product details, particularly when multiple merchants share
the Buy Box.
To make an impact, merchants are getting
creative. Some common strategies include:
•
Building kits (or bundles), such as
gift baskets
•
Developing private-label products
•
Asking for product reviews through
proactive solicitation
Amazon seeks to match searchers with the most
relevant, trustworthy and sought-after products. Kitted products achieve this
by filling a niche with convenience-minded shoppers. Private-label products
offer additional choices for the consumer, often providing higher quality at
lower prices. Product reviews reduce uncertainty and are the source of truly
organic, original content.
Merchants who own the Buy Box on kits and
private-label items can achieve a significant uptick in brand awareness among
Amazon searchers. They’ll boost their stock even higher by requesting timely
reviews from users who completed a purchase. As search traffic expands, savvy
merchants position themselves to support the demand.
3. Advertising allocations are shifting.
Search engine pay-per-click
(PPC) advertising is very effective at driving traffic to a merchant's
website. The challenge involves convincing visitors to convert into paying
customers.
Branding, user experience, web security and
mobile friendliness all can influence a visitor's willingness to buy. Taking
this approach, merchants could spend thousands of dollars chasing only a few
hundred dollars in initial sales.
As a result, an increasing number of
merchants are shifting their advertising budgets toward an Amazon-centric
orientation. With the success of the Amazon Sponsored Products program,
merchants can expose their listings to purchase-ready searchers. With each
click, shoppers remain within the cozy confines of the Amazon marketplace,
rather than being redirected to third-party websites. This approach delivers a
more cohesive, convenient shopping experience -- and generates traffic
with higher conversion rates.
4. Amazon search is leading to increased
‘webrooming.’
Several years ago, the
term "showrooming" became a common issue facing
brick-and-mortar retail stores. A showrooming shopper enters a store,
identifies the items he or she likes, compares prices online and then makes the
transaction online (often via a smartphone). Locally owned businesses in
particular have struggled with declining sales because of this phenomenon.
Given Amazon’s ever-increasing dominance,
online stores are seeing the rise of the reverse problem: “webrooming.” In this
scenario, shoppers spend hours reading online reviews for items they intend to
purchase in person. Unlike showrooming, which certainly has challenged local
retailers, webrooming's impact on Amazon is uncertain at present.
For entrepreneurs in the retail industry,
webrooming could have a number of interesting side effects. As an example,
consider a regional chain of home-appliance stores. Sales of smaller items such
as toasters, microwaves and replacement parts long ago evaporated to the web.
But purchases of high-dollar or bulky items (think washers, dryers, water
softeners and refrigerators) may now at least be shaped by online reviews. The
same is true of any other product customers want to see before they buy.
Business owners -- brick and click alike
-- must remain vigilant. They need to proactively monitor how their products
are perceived on the Amazon marketplace, in particular.
The takeaway: Merchants can leverage this
growth opportunity.
As consumers shift more of
their product research to the Amazon marketplace, product-focused entrepreneurs
face several decisions. While it’s unwise to abandon all off-Amazon strategies,
most merchants certainly could benefit from developing a strategy tailored for
Amazon search. Diversification of SEO and PPC budgets also could prove to be a
competitive advantage, especially when competitors stick to more obvious
channels.
Written by: Jay Lagarde
Credit: Entrepreneur.com
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