Ahead of the brand new Amazon Sellers Summit, Ernesto Rojas, head of marketplaces at Sons, spoke to RetailX Events.
Taking a long-term view, what impact do you think Amazon’s increasing ecommerce dominance will have on direct-to-consumer (DTC) industry strategies?
Amazon’s dominance, as well as that of other marketplaces, should not be seen as a threat to direct-to-consumer (DTC) brands. Instead, it presents an opportunity to showcase products to millions of consumers who might otherwise never encounter your brand. When leveraged correctly, Amazon can be one of the most powerful tools and partners a brand can have.
Looking into a key number, around 56% of all product searches now begin on Amazon, compared to 31% on Google. Additionally, Amazon Advertising has become one of the most potent visibility tools for any brand, growing by more than 40% YoY and setting up the rules and benchmark for the industry.
DTC brands must balance their product portfolio by determining which products can be successful in both channels, which should be exclusive to Amazon or DTC, and how to create the best customer experience across different channels.
Understanding brand economics is also crucial, as not all products are suited for both channels, and identifying these distinctions is important.
Ultimately, DTC brands should view their Amazon channel as a driver of growth and a pathway to eventually convert Amazon customers to DTC customers.
In your opinion, how do approaches to brand identity differ in Amazon’s evolving marketplace, and what do you see as the implications for product differentiation and competitive advantage?
Brand identity should remain consistent regardless of the channel through which you are selling. Your brand must offer a similar experience and image at all times, creating a cohesive experience for customers across platforms. Amazon provides the necessary tools to achieve this, one of which is the Brand Store. When executed and designed correctly, it can reflect a similar look and experience as your DTC channel.
Another powerful tool for brands on Amazon is A+ Content. This feature allows you to go deeper into your product, your brand, and the benefits it offers to every customer.
As long as your products are aligned with your brand, you will build long-term growth and a successful strategy within the channel. The key takeaways are relatively simple (in addition to complying to Amazon’s ever changing rules):
- Stay true to your brand,
- Recognize that your brand is your most valuable asset,
- Learn from your competitors,
- Build an image that aligns with your brand identity, achievable through your Brand Store and A+ Content.
What one piece of advice would you offer brands looking to Amazon’s fulfilment infrastructure to streamline supply chain and improve customer experience?
Here it depends a lot on your business model, supply chain programs vary from 1P to 3P (FBA of MFN) and each brand will have their peculiarities and limitations depending on the category and country.
As a general rule I have 2 pieces of advice:
1. Stay close to the numbers: Have a perfect understanding of your P&L, how much are you spending on packaging, preparation and shipping into Amazon (1P or FBA) and ask yourself: (a) Are there any areas where you can cut costs or speed? (b) is there any supply chain program I could be leveraging on? (PICS, Pan-EU, x-border shipping, etc.) and (c) what is the impact/benefit of enrolling into a new supply chain program? The answer or next step will always be in the numbers.
2. Have a clear understanding about what is important to your customer and to your brand. In example: Is it speed? FBA is your best ally (as a 3P brand), Is it presentation? Probably you prefer staying within MFN and make sure you personalise everything in your packaging at the sacrifice or speed.
This is a very general response, and every brand will have their priorities, limitations and tools. Make sure you understand your brand, customers and P&L.
What impact do you think the increasing use of AI and automation on Amazon will have on product discovery and marketing strategies?
I think it is at a very early stage, with Rufus and other programs coming into play. However, I expect the impact of generative AI to increase at an exponential rate in the following months/years.
As a brand you need to be extremely careful and responsive to any change that Amazon wants to make (yes, they can do it without asking you) and always protect your CX. A small unsupervised change can get your ASIN’s search suppressed, so pay attention to detail. Same for your campaigns, a small keyword change can have a big impact on your overall metrics.
Lastly, learn about AI, it is extremely important to understand what’s happening and how it will impact you. You don’t have to be an expert, but understanding will get you a long way to be proactive and reactive.
How do you see Amazon’s integration of brick-and-mortar locations (Amazon Go, Whole Foods, etc.) impact the future of omnichannel retail?
I have mixed feelings on this topic, I haven’t seen Amazon having tremendous success in Bricks and Mortar, with Amazon closing more and more of their physical stores every year. I think their focus will be in the cashierless technology than in the actual stores, but it remains to be seen.
As part of RetailX Event’s Spring Festival 2025, the Amazon Sellers Summit is the definitive event for learning to build a strong brand presence on Amazon, drive Gross Merchandise Value (GMV) and optimise profits from the platform.
The Spring Festival will also see the return on ConsumerX, DigitalX, SubscriptionX and SustainabilityX with the introduction of Social Media Masters.
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