Why Pulling Out of Amazon Is the Smartest Decision for Your Brand

Nike announced that as part of the company’s focus on elevating consumer experiences through more direct, personal relationships, it will stop selling its merchandise directly to Amazon.com. Here’s why Nike made the right decision.

Nike announced that as part of the company’s focus on elevating consumer experiences through more direct, personal relationships, it will stop selling its merchandise directly to Amazon.com. Here’s why Nike made the right decision.

Partnering with Amazon undoubtedly has benefits — namely, a built-in audience and speedy delivery options. However, it’s crucial to consider what you’re jeopardizing in exchange. You’re losing control of how your brand is presented. Even if you’re lucky enough to benefit from Amazon’s search algorithm — another thing brands have no control over — you essentially have no say in how your brand experience is delivered.

Last year, Nike partnered with Jet.com, and given what Jet’s chief customer officer said, I’m not surprised. David Echegoyen told Footwear News, “the way in which people find, discover and use your product is as much part of the experience as the fact that you buy them and use them.” Echegoyen explained that Jet’s focus would be on delivering an experience that would allow both brands to utilize customer insights to enhance their experience. And because Nike products would only be sold direct from the brand on the Jet site, the confusion and brand dilution that shoppers often experience on marketplace platforms would effectively be eliminated.

What every brand should seek in its retail partners — and, really, all partners, to the extent that it’s possible — is recognition of the importance of delivering a cohesive brand experience at every touchpoint, and the desire and capabilities to do so. The advantages of owning your brand experience are abundant.

Control Your Customer Journey

By limiting the channels where your products are available, you’re better able to deliver the best experience to your customers. This includes everything from product recommendations to delivery preferences, the physical unboxing experience, and more. This controlled approach also serves as a preventive measure against counterfeiting issues that could otherwise tarnish your brand’s reputation.

Own Your Data

Amazon traces every shopper’s step, utilizing that data to make product suggestions based upon its own algorithm. These are insights that would be incredibly valuable to brands, arming them with information that can help to deliver a better experience across all platforms, ultimately earning loyal customers. The problem is Amazon owns that data and doesn’t share it with brands. Now, selling direct to consumer on your own channels provides you with 100 percent of your data, the benefits of which warrant its own article. With a compatible, focused retail partner, there may be more room for a discussion about data sharing.

Secure Better Profit Margins

It’s difficult to predict revenues when the sales process is out of your hands. Going direct to consumer gives brands the most control over profit margins. However, as a new or emerging brand, third-party channels are commonly part of the mix. Profit margins are dependent upon the type of partner and the value they bring to the table — or in this case, the cart. Amazon controls the market, so the terms of merchant agreements are almost certainly dictated. However, when you have a like-minded partner dedicated to delivering an experience, the terms may be subject to negotiation.

Shatter the Delivery Myth

Thanks to the “Amazon Effect,” brands and retailers have had to figure out how to meet delivery expectations. My company conducted a 2019 study that revealed online shoppers weigh shipping costs and delivery speed more heavily in their purchasing decisions than ever. Consider that 58 percent of respondents said shipping costs greatly impact their decision to make an online purchase, and 62 percent said free shipping was the most influential factor in their decision to make future purchases. By utilizing sales and transportation data from your fulfillment team, you can map your customers’ journeys and customize shipping pricing and delivery speed to meet their unique expectations.

Selling through partners can be a huge asset, but it means there will always be an intermediary between you and your customer. If your sales channels include third-party retailers, make sure you’re all on the same page. Amazon can bolster brands in the short term, but to build a sustainable business, you must control how customers experience your brand, wherever they are.

Maria Haggerty is CEO and one of the original founders of Dotcom Distribution, a premier provider of B2C and B2B fulfillment and distribution services. 

Turning Email and Social Synergy Into Opportunity

In marketing — as in candy bowls — chasing too much opportunity can produce nothing more than paralysis or, at best, a dilution of the effort when it’s spread too thinly.

Too much candy isn’t good for you. As appealing as that big bowl of M&Ms looks right now, you know that if you get even get close to it, you’re going to regret it.

The same can be true in marketing. Working with a marketer who is merging three email programs into one campaign management application, I realized very early that there was huge opportunity for synergy of content as well as cross-selling and promotion between the three brands. The marketer was very excited about the possibility of managing the programs in a true CRM-driven fashion. That was only possible once the programs were generated off the same database and integrated at the subscriber level. Until now, the best this marketer could do was run separate promotions with similar offers, then try to compare the impact on revenue and unsubscribes after the fact. There were never very promising results.

With everything managed in one solution, the field is open for new approaches. A quick diagram of the combined customer base by brand showed a very slim overlap between them. At first glance, that feels like all upside — what a great opportunity to expose each brand to new, known audiences. It’s a big bowl of untouched delicious chocolate!

Synergy situations like this do create opportunity. That can be very exciting. But before you get too swept up in dreaming big, consider how important it is to prioritize those opportunities. In marketing — as in candy bowls — chasing too much opportunity can produce nothing more than paralysis or, at best, a dilution of the effort when it’s spread too thinly.

Consider these factors to help prioritize the opportunities before you:

1. Permission. Never assume permission. Period. First, it may be illegal depending on the countries where you market. Second, it’s bad marketing. There’s plenty of cross-sellling opportunities along the existing permission grants that you own today. At the same time, encourage subscribers to sign up for more types of messages from other brands in your preference center.

Lest you falter in your steadfastness, take this tale to heart: We had one marketer recently suffer a big drop in sender reputation and inbox placement. We traced the high complaints to a few campaigns promoting retail partners. Even though it was the marketer’s brand, template and “from” line, subscribers thought the messages were actually from the partners. Complaints were very high, even though the partners were trusted brands themselves. Subscribers knew they didn’t sign up for email from those brands and didn’t stop to check to see if it was a cross-promotion. They just clicked the spam button. Even if you own the partner brands, don’t assume your subscribers know that. I can’t emphasize enough how important it is to gain permission and earn it with every message you send.

2. Audience profile. You don’t have the time or resources to tackle every possible cross-promotion opportunity, so focus on the two to three that have the right criteria — reach, revenue and strategic importance. The latter is sometimes hard to gauge, but it usually involves business drivers, high-value customers or high-visibility projects. Balance those factors out in a spreadsheet so that you have real science behind your discussions. Make sure that every test has an actionable learning so that you can continue to improve and optimize.

3. Brand affinity. Just like in social marketing, customers who already trust you are the ones most likely to take your advice on cross-promotional purchases. Therefore, segment not just by permission status but also by the likelihood of brand affinity that will encourage cross-pollinization of the brands. For example, free online members may have a very low brand affinity and thus are least likely to welcome cross-promotions. Paid members who have purchased recently or have more than one product will be more likely to welcome upsell offers (and not complain).

4. Sales channel preference. A factor that became more important than we initially considered is sales channel — e.g., those who purchase in-store versus online. Not only are there demographic differences between the two, but there are also differences in the way email is used. For example, in this case email wasn’t very successful at encouraging in-store customers to purchase online, but it was effective in generating store traffic. Seems obvious now that we see the results, but of course the magic is in the discovery.

5. Customer life cycle. This is perhaps the most important factor. I’ve found time and again that marketers are way too confident in their assumptions about how interested consumers are in their offers. In fact, you have to start way back in the life cycle for cross-promotions, just as you would with new prospects (which, of course, many of these people are). Nurturing has to start with discovery and exploration. Too many times marketers hit prospects with offers well before they’ve established credibility with them or before they even acknowledge their own needs.

What have you learned from your efforts to create new revenue and customer satisfaction opportunities through data integration? Please share your thoughts and ideas in the comments section below.