Retailers and brands are now more often turning to marketplaces to sell. We asked Ellie Need, brand manager at Itsu [grocery] and Paul Adams of marketplace services platform Tambo on why that is – and how brands can best make the most of marketplaces.
InternetRetailing: Which marketplaces does itsu sell on?
Ellie Leek, brand manager at itsu [grocery], says: At itsu [grocery], we retail our extensive ambient range on Amazon across snacking, instant noodles and world foods. More recently, we have listed our frozen range on Amazon Fresh, with chilled products soon to follow.
IR: How important are marketplaces as part of your overall ecommerce/multichannel strategy?
EL: Our sales on Amazon have grown enormously in the last year, seeing 254% growth FY2020 vs FY2019 for itsu [grocery]. The larger case formats we sell on Amazon offer something different for our loyal shoppers who are looking to buy in bigger quantities and can take advantage of the Subscribe & Save feature. We are also able to use the data and consumer insights from Amazon to inform our wider brand strategy.
IR: Do you see marketplaces growing or declining in importance?
EL: Amazon will continue to be an important channel for itsu [grocery] as we look to make our products available for as many people as possible. With Amazon’s increased focus on driving grocery, it will be interesting to see how this provides further opportunities for growth.
IR: Can you tell me about the one or two most important opportunities that marketplaces give to you as a brand – and how you make the most of them?
EL: Amazon Advertising provides huge potential to grow itsu [grocery] from both a sales and brand marketing perspective. We have been able to establish brand presence in competitive grocery categories by campaigning on relevant keywords to increase our share of the market. For example, ‘itsu’ was in the top 6% of all searches on Amazon in Q4 2020. The data available allows for measurable ROI on AMS (Amazon Marketing Services), which means we can adapt our strategy to maintain efficiency.
The content-side of Amazon is equally as important for us. The Brand Store is an opportunity for us to create a seamless user-journey and convey the brand message of itsu. We sell products across multiple categories, Amazon content allows us to showcase these in one, easy to navigate, shop-front. A+ content enables us to introduce consumers to ranges they might be unfamiliar with and cross-sell our range. With autonomy over the creative content, we are best placed to be reactive with our messaging to ensure we remain relevant and engaging for our consumers.
IR: What are the key challenges/things to avoid about working with marketplaces? – and how do you deal with them?
EL: We learnt quickly that continual optimisation is required to succeed on Amazon, from refining content to monitoring the fluctuating cost of advertising. It is therefore important not to underestimate the focus and resource needed to drive performance.
Getting started on Amazon can be tricky for brands with no access to a face-to-face contact. Therefore, guidance from marketplace specialists, like Tambo, is highly recommended.
IR: How do you see marketplaces, and your relationships with them, changing in the future?
EL: The last year has seen huge shifts in consumer shopping behaviour, with people turning to online channels more than ever before. At itsu [grocery], our mission is to share delicious, healthy, Asian-inspired food with as many people as possible. Therefore marketplaces, like Amazon, will continue to play an important role in putting our products into consumers hands. We hope to be able to replicate this success in international marketplaces and implement the learnings we’ve seen from our UK performance.
InternetRetailing: How does Tambo help brands work with marketplaces generally?
Paul Adams, CEO, Tambo: Tambo is a global marketplace service platform. We help brands sell on Amazon and other marketplaces. Because we understand the structure and dynamics of marketplaces, we are able to optimise product listing to drive peak performance. The services we provide to clients depends on their e-commerce capabilities. For some, we provide consultancy to help set strategy and plans, for others we provide performance analytics, and for many we manage the marketplace on their behalf, taking care of all sales, marketing and operational requirements. Often, we are brought in to help broker the commercial deal and set up the account from which the brand can start trading. By helping brands get the foundations right, we can save them considerable time and cost.
IR: What advice do you have for brands on making the most of the opportunities that marketplaces offer – and for dealing with the challenges?
PA: Don’t try and do it all yourself. Marketplaces – and especially Amazon – are complex to set up and manage, especially if you are selling in a new country outside of your current operation. Secondly, don’t underestimate the commitment and investment required to establish your brand in a marketplace. Take advice on the cost of doing business, and plan your budget accordingly. Thirdly, make sure that you have a supply chain in place that can handle the unpredictable ordering patterns of marketplaces. Start with a few SKUs [stock keeping units], test the process and expand based on operational performance.
Finally, opening up in a marketplace is no different from opening a new high street store. Your attentiveness to store design, merchandising and customer service are critical to success. And you will need to invest in advertising and other marketing initiatives to build awareness and capture demand.
When starting out in a new marketplace you will face many challenges, particularly with regard to logistics, but if you have a good brand and manage your presence carefully, marketplaces can be an excellent sales channel for your business.
The relationship between brands and marketplaces is explored further in the RetailX Brands and Marketplaces 2021 report. Click here to download it and explore further.
