3 out of 4 Brands Will Sell on Amazon in the Next Five Years, Feedvisor Study Finds

By MTS Staff Writer On Jan 24, 2019

Brands See New Customer Acquisition, Meeting Existing and Future Customers Where They Are as Biggest Opportunities

Feedvisor, the AI-driven, machine-learning and big data company that helps brands and retailers optimize their e-commerce businesses with Amazon at the core, unveiled the findings of a first-of-its-kind analysis on the evolving relationships between brands and Amazon. The report, Brands & Amazon: Insights, Opportunities, and Concerns in the Age of E-Commerce, surveyed business leaders from major US brands on how they are finding success, overcoming challenges, and preparing for the future in an Amazon-centered retail landscape.

The analysis found that over half of brands (54 percent) are already selling on Amazon today, and nearly three-quarters (72 percent) of brands will be selling on the platform within the next five years. Other key findings include:

Amazon dominates brand e-commerce strategies: For 44 percent of brands selling on Amazon, more than half of their total e-commerce sales come from the platform. One-third of the brands (32 percent) selling on Amazon said it accounts for up to three-quarters of their overall e-commerce sales. It is evident that for the remaining brands, a significant opportunity exists to increase their share and capitalize on the platform’s profit potential.

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New customer acquisition is Amazon’s strongest selling point. A significant majority of brands both selling on Amazon (97 percent) and not currently selling on Amazon (84 percent) agree the most compelling benefit to selling on the platform is acquiring new customers.

Brands are eager to expand their Amazon presence: Of the first-party brands surveyed, more than four in five (81 percent) want to expand to Amazon’s third-party channel. The majority of brands (61 percent) interested in evolving their relationships with Amazon said their primary reason is to get in front of a larger audience.

Brands are mindful of Amazon’s private label push: Amazon is making aggressive moves into private labels and it is paying off — recent estimates predict $25 billion in sales by 2022. Of the brands selling on the platform, two-thirds (66 percent) concede that competing with Amazon’s private label products is a pain point.

“Over the last two decades, Amazon has disrupted e-commerce in ways we never thought possible. It has rapidly become the go-to shopping destination for consumers, and it shows no signs of slowing down,” said Victor Rosenman, CEO, Feedvisor. “Amazon’s momentum created a wave of new challenges, but our analysis shows that brands see the significant value of the platform’s audience and influence.”

Amazon’s investment in advertising is an area of fresh opportunity for brands — the company has skyrocketed to become the No. 3 digital advertising player, with advertising revenue expected to reach $38 billion by 2023. As Amazon creates tools to help sellers grow their audiences and increase their presence on the platform, brands are taking notice — more than four in five brands (82 percent) agree that advertising and branding options are one of the best parts about selling on Amazon. Other key findings include:

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Most brands are already embracing Amazon’s advertising and seeing results: A majority of brands selling on Amazon (57 percent) said they already pay for Amazon Advertising. Of those, a staggering 97 percent see value in those advertising efforts.

Advertising draws in new customers: Beyond maintaining better control of their identities, brands see advertising as a way to connect with new customers. Of the brands selling on Amazon, nearly one-third (30 percent) said advertising was the most effective technique for acquiring new customers on the platform, just after competitive pricing (51 percent).

“With its vast audience, commitment to customer experience, and increased focus on advertising solutions, brands are restructuring their e-commerce strategies to put Amazon at the center. Our findings show that brands are already making investments to bolster their presence on Amazon through strategic advertising optimization,” said Dani Nadel, President and COO, Feedvisor. “But advertising is just one piece of the Amazon puzzle. To effectively navigate the complexities, brands need a holistic strategy and real-time, decision-making technology that considers the many factors influencing success.”

This report comes in the wake of the launch of Feedvisor’s expanded, end-to-end, “AI-first” platform, which provides data-driven, actionable insights and optimizations across pricing, advertising and branding. Feedvisor’s platform and team of Amazon experts enable any brand, retailer, or seller to successfully navigate the complexities of selling on the platform.