Considering that more than half (55%) of brands are already selling their wares on Amazon, while about half (48%) of those who don’t are considering doing so this year, Amazon figures prominently into brands’ retail strategies. But is it all about sales and customer acquisition – or are there are other benefits from selling on Amazon? Feedvisor surveyed [download page] more than 1,000 retail business decision-makers and offers some answers.
The majority of brands selling on Amazon say that the best parts of selling on the marketplace do indeed include acquiring new customers and increasing sales volume. Others note that primary benefits extend to gaining market share and generating brand awareness. And some decision-makers cited Amazon’s credibility, along with the advertising and branding options available, as the best parts of selling on Amazon.
Seven in 10 (71% of the) retailers surveyed report that between one-quarter and three-quarters of their e-commerce sales were from Amazon. And, while driving sales (62%) and acquiring new customers (60%) are the most widespread reasons respondents sell on Amazon, there are others, too. Brands are also using Amazon to build brand awareness (58%), identify competitors (42%), and test products (39%).
Advertising on Amazon
Nearly three-quarters (72%) of respondents say that one of their top motivators for selling on Amazon is its expanded advertising capabilities, with more than half (54%) of brands seeing a “great deal” of value from Amazon advertising. Indeed, 73% of respondent brands were advertising on Amazon last year, a marked uptick from 57% the year before. This growth in advertising is expected to continue. Per estimates from eMarketer, Amazon will account for nearly one-tenth of all US digital ad spending by next year and experience faster ad spend growth than its key competitors, Google and Facebook.
The goals that brands have for advertising on Amazon are similar to their broad reasons for selling on Amazon, with common factors including new customer acquisition (66%), driving sales (65%) and driving brand awareness (65%).
Advertising on Amazon seems to be paying off. Some 4 in 5 (83% of) brands are seeing at least 4x return on their advertising initiatives on Amazon. Additionally, 59% of brands selling on Amazon and 36% of all brands surveyed say it drives the highest return on ad spend.
- More than half (52%) of brands put their most popular products on Amazon in conjunction with their own website or channels.
- Although brands see Amazon as a full-funnel purchase channel, 3 in 10 feel that Amazon is most often used during the consideration stage.
- Two-thirds of brands say their customer acquisition cost (CAC) on Amazon is the same (33%) or higher (32%) than other channels, while 45% saying their average CAC is less than $100.
- Among those brands that do not sell products on Amazon, 37% say they don’t think it’s necessary.
The full report can be downloaded here.
About the Data: Findings are based on a survey of more than 1,000 US retail business decision-makers.