Top Trends to Watch in 2019 for Amazon FBA Sellers and Brands
In the world of e-commerce, Amazon FBA is a tool that online retailers cannot afford to ignore. Amazon has grown to become the world’s largest online marketplace in the last two decades. For entrepreneurs and brands selling on Amazon, last year was a disarray of change with old success strategies becoming superseded, increase in competition, and new Amazon program among others. This year too, the sellers can expect some changes and the latest trends. But what natures of fluctuations and trends should you expect?
With Amazon’s reach constantly broadening, it is proficient at moving the needle across a variety of industries and categories. Amazon has recently announced Amazon Day, which is a new invite-only program that will allow consumers to pick the day of the week that they would like their orders to be delivered. It is the marketplace’s another step towards enhancing its customer personalization approach a bit further.
There’s a lot in the plate for Amazon sellers, and processing the data can be stressful because there are so many things the sellers have to consider. While it is possible for sellers and brands to generate incredible amounts of revenue this year as well, there are also many pitfalls and changes that, if ignored, can plague and entangle both experienced and inexperienced vendors.
When it comes to selling on Amazon, each aspect of retail operation must be formulated and implemented with precision with the changing trends in order to maintain high product reviews, and attract & retain customers.
In this post, we will predict and discuss some of the biggest trends to come in 2019 to update your Amazon FBA business decision making.
#1 Established Brands Getting Clever about Amazon Organic Sales and Ranking
There will be brands getting nifty about Amazon success strategies, that will ultimately put pressure on the third-party sellers. The primary reason the third-party sellers have had become the marketplace giants is for the reason that when Amazon transformed the e-commerce game, they restructured the essential strategies that drive success. In many ways, the fundamental approach used in retail, such as branding, quality packaging, and paying for shelf space, etc. gave way to PPC/direct response advertising, organic keyword ranking, and lower prices.
The third-party sellers were able to drive immense success because their only odds of driving sales among the established brands were to become apprentices of the new models of retail success strategies. They have worked meticulously to cognize the significant aspects of Amazon conversions and organic keyword ranking that led to considerably higher visibility than already established more prominent brands.
Major brands have continued to use disparaged success tactics. They have emphasized more on Amazon PPC, seeing it as the most impactful lever of driving sales. However, the trend is changing as the major brands have started to understand that there are prospects beyond just advertising sales.
- Established Brands Getting Clever about Amazon Organic Sales and Ranking
- Amazon success strategies
- Amazon PPC
#2 Amazon PPC to Become Less Saleable but More Critical
Advertising on Amazon has already seen an increase in efficiency, noteworthy increases in costs, and a consequential increase in significance to success for brands on Amazon. Inefficient spend of new brands, combined with significantly increased demand, will absolutely result in increased cost-per-clicks (CPCs). With Amazon increasing its dominance in online retail, brands are forced to break the bank for Amazon advertising. This trend has been observed in many markets in the recent times, and it is expected to increase in ubiquity and velocity this year. In conclusion, it is plausible that the costs will increase with an increase in efficiency.
However, due to the limitations of Amazon’s in-house programs and advertising tools, in addition to the absence of refined automation alternatives and ad management, we still see significant inefficiencies in general Amazon advertising campaign management. However, we do expect improved sophistication, new tools, and functionality in advertising tools that will allow for an enhancement in Amazon advertising spend efficiency.
Additionally, it is believed that Amazon advertising will continue to be significantly more critical to being competitive in the marketplace.
#3 The Trend of Building Brands Off of just Amazon
Amazon sellers are no focusing more on building brands off of the marketplace. This is because the reward ratio is continuing to improve relative to the rate of concentrating solely on Amazon. In the past, we have seen numerous brands that have achieved success through multi-channel strategy – selling beyond of just Amazon. Although it was rare and marketers advocated for focusing on Amazon, with the increasing competition, it can be seen as a plausible tactic.
While sellers easily hit 6-8 figures focused almost exclusively on Amazon, the high opportunity cost of selling exclusively on Amazon can take a toll on their budget. Opportunity cost is an influential metric for ideal decision-making, and for the majority of Amazon sellers, the opportunity cost is too high when focusing off Amazon.
- The Trend of Building Brands Off of just Amazon
- building brands off of the marketplace
- selling exclusively on Amazon
- focusing off Amazon
There is no doubt that the opportunity of selling on Amazon is more significant than ever, but we feel that the measures of opportunity cost are switching to point to building brand as the grander opportunity. The prospect of selling on Amazon is greater; however, the effort and expense of seizing the opportunity are also more considerable. Hence, you will see Amazon sellers approaching the multi-channel strategy to reduce the cost of grabbing the opportunity of selling on Amazon.
#4 Expansion of Amazon Stores
There is a vast development in the brand’s Amazon Stores. Although they have come a long way, the accessibility to customers is still limited and sometimes, impossible. The marketplace has put in a lot of investment in not only the functionality of the brand stores but the metrics as well that is available to vendors and sellers. The marketplace will be launching a separate Search functionality giving the customers more direct access to their Amazon Store.
At present, for the customers to access the Brand Store, they need to click on a Sponsored Brand’s ad. This will direct them to their preferred landing page. However, the customers can also click on the brand’s name or log in their detail page for accessing the selected landing page. Or they can even find the Brand Store organically by searching in the search box using relevant keywords, or by a text ad. With Amazon providing more search functionality, it will provide the sellers with more upsell opportunities where they can upgrade their Amazon Store’s functionality by paying a monthly fee or making a one-time investment.
#5 Amazon will Merge with Social Media
Amazon’s new social media marketing strategy will inspire buyers and drive revenue. With more than 300 million active Amazon customer accounts, the popularity of the marketplace is nothing short of phenomenal. Amazon has been slow to jump on board with social media. Seeing social media’s growing influence on the customer journey, Amazon is making a more significant push into platforms like Snapchat and Instagram. The marketplace is attempting to push the envelope on social media platforms by introducing a more performance-based strategy.
As per the experts, merging with social media platforms will benefit brands with direct acquisition-based formats on social media. This way, social media platforms will move beyond just branding campaigns and become an assessable way for sellers and brands to track progress.
In the past, social media platforms have been leveraged for awareness and branding related key performance indicators; thus, it is no surprise that the world’s biggest marketplace is taking the strategy a step further.
This will help Amazon push the consumers towards products that they are more likely to buy. However, this ultimately increases the need for having a highly optimized listing.
- Amazon FBA Product Differentiation – 10 Ways to Stand Out from the Competition
- Amazon’s new social media marketing strategy
- social media platforms will benefit brands
#6 Amazon will be Leveraging Big Data
Amazon incorporates an unparalleled bank of data on consumer behavior that it can mine from its 300+ million consumer accounts. Amazon is the leader in mining, storing, processing, and analyzing customer information as a means of identifying how their customers are spending their money. They will continue to surprise their customers with new attracting ways of connecting with them through data generated from their colossal amounts of touchpoints. They will be using predictive analytics to perform targeted marketing in order to increase customer satisfaction and create company loyalty.
Amazon will be using an inclusive Collaborative Filtering Engine (CFE) that will analyze what items the customers have purchased previously, what’s on their wish list, what is in their online shopping cart, which products they rated and reviewed, and what products they search for most. This information will be used to endorse additional products that others bought when buying those same products.
Amazon will be using the customer data in an efficient manner to make their offerings more buyer-centric than we have seen in the past.
#7 Significant Changes in Reviews and Rankings
2019 is the year where Amazon will sustain to expand the integrity/security around several processes/systems, together with their coveted reviews. We are expecting the marketplace to make significant systematic changes to their review system. In 2018, Amazon did some review changes, particularly around review locks. The new modifications notified Amazon to put a lock on new review activity after receiving too many reviews.
As per the experts, Amazon may follow a LinkedIn-style review cap to reform its review system. That is, Amazon may start showing review quantities over 1000 as 1000+. We think this will be done to protect the integrity of the products purchased. Amazon sellers will be incentivized for achieving the maximum review quantity as compared to their competitors. In short, a higher review quantity specifies more enormous admiration to the buyers. It will prevent from creating a dull market where the age of the product is favored over value and quality.
Limiting the reviews will allow the potential buyers to determine that a statistically prominent number of buyers have reviewed the item; hence, the review must be authentic.
#8 International Markets
The third-party Amazon sellers are substantially moving towards offering their brands and products on Amazon’s international marketplaces. If played right, selling on Amazon.com, still possess massive opportunity. However, there is no denying that it has emerged out to be the most challenging opportunity to grasp. We expect the real opportunity and rush will come in its international marketplaces.
As establishing and expanding a high-growth and profitable Amazon FBA business becomes more challenging to achieve on Amazon.com, 2019 is finally the year where the third-party sellers will be looking into the international markets. While there some drawbacks of selling in the global markets, the ease of driving organic keyword ranking, cost-effective Amazon advertising, and growing top-line revenue seems less competitive as compared to Amazon.com. Experienced and established brands and sellers on Amazon.com will be able to use their expertise and learned success strategies for implementing them to their products and brands in the international markets.
#9 Acceleration of Changes in Advertising Capabilities
The advertising capabilities that Amazon provides to its sellers and brands will continue to accelerate this year as well. The commencement of this change was already seen in the fourth quarter of 2018 in addition to Sponsored Brand Placements, improved auto-targeting for sponsored products, and product attribute targeting, the proliferation of Stores, video, and DSP Sponsored Products retargeting, and Sponsored Products replacing PDA’s in detail page ad posts.
This is Amazon’s another step towards creating the most potent and robust advertising platform sellers, and brands have available to them.
For more advanced targeting, Amazon will be focusing more on audience segmentation, mobile optimizations, custom videos, and accessing off-Amazon customers. Amazon FBA sellers who can adapt to these changes will benefit the most.
- Acceleration of Changes in Advertising Capabilities
- Sponsored Brand Placements
- Sponsored Products replacing PDA’s
- proliferation of Stores, video, and DSP
This year will be more challenging to the sellers and brands looking to make the most out of their Amazon FBA venture. However, if the sellers are able to follow the trends and mold their strategies accordingly, they will be able to reap maximum benefits out of their Amazon FBA business.