They take the piss don’t they really.
Whilst I appreciate all that Amazon has done for me and many people I know, as well as for a ludicrous number of businesses, they can be right arseholes.
What I’m talking about today is “Feature from Our Brands”.
A beautiful little module that sits in the search results above many sponsored placements – although the position varies.
So let’s say for argument’s sake you are searching for a HDMI cable because Chromecast isn’t your vibe, you’ve got more pieces of Apple than a cider brewery and Firesticks just seem a little shit to you.
You jump onto Amazon, hoping to scratch that itch.
As a customer, you won’t realise it, but there are a series of different modules within the search results where you can pay to be placed. Ideally as a product owner, you want to position yourself at the very top, with a nice Sponsored Brand ad. After all the data shows that top of search receives more clicks than everywhere else, and what do more clicks mean? You guessed it, more sales.
Back to that itch.
At the top of your search you’ve now been shown, remember how much you love Amazon, “Top rated from our brands”:
Well isn’t that just fantastic? You trust Amazon, they’ve got a few reviews, the price is right and you aren’t that mad on browsing for more than 12-seconds – CLICK, CLICK, CLICK…see you tomorrow little wire of magic.
And on the face of it, there is absolutely nothing wrong with what has just happened here.
The customer has got exactly what they wanted. Amazon has put a stop to their pain and done so without any effort whatsoever.
But my question today is: is this fair?
Amazon’s A9 algorithm works in such a way so that the best offers are displayed to specific customers based on their search query.
Simply put, they display the most RELEVANT product.
They determine what is best (most relevant) by a number of factors, including but not limited to:
- Traffic (sessions)
- Conversion rate (session -> add to basket)
- Sales velocity (units sold)
- # of reviews
- Quality of reviews
- Relevance of reviews
- Delivery speed
- Seller performance
I’m just speaking about ORGANIC results at the moment by the way.
That is, not including PAID placements into this.
What Amazon is doing is saying everyone needs to battle to become relevant, but they do not.
It is their marketplace so if they deem it appropriate they can dictate to the customer what is most relevant to them and what is the best choice for them.
Which arguably goes against their Leader Principle “Customer Obsession”. Instead of just using data to determine suitable product suggestions they are using personal preference.
What does this mean then?
- As mentioned, top of search gets more sales. If Amazon are seen first because of this special placement then they’ll receive more sales than anyone else which will in turn make them organically appear higher in what A9 deems appropriate search results. This starts their flywheel and makes it hard to stop.
- If you’re an advertiser and you’re using Sponsored Products (singular ad placements) then Amazon is essentially saying “if you want to appear above us you need to spend more money on the Sponsored Brand placements”.
- Amazon saves money on advertising so they can then reduce sell prices. Lower prices are more attractive to customers so their sales will go up. Worse still, lower prices will drive higher unit sales, which directly aligns with what A9 is looking for. It’s not looking for total revenue per ASIN, it’s looking for TRAFFIC, CONVERSIONS and SALES VELOCITY. Feeding back into the flywheel.
- It’s not “customer obsession” because they aren’t delivering the best experience as customers aren’t shown what’s truly the best results – as determined by other customer data.
Supermarkets have done this for years. I understand that. Putting their own branded items at the checkout or with special/exclusive merchandising.
Amazon has commented stating that “Amazon products have better reviews on average”, which is a very fair point.
But if I buy something 30% cheaper than the next best offer I’m more likely to leave a better review.
If they are selling 10X the amount then negative reviews have a smaller impact on their average, whereas 1 bad review can cripple some brands ratings.
To pull this all together I’ll say this
Amazon can do what they want, it’s not fair and it’s anti-competitive, but shit happens.
You can moan about this as a brand, vent in your little Facebook groups or…
You can focus your energy on areas that you CAN control.
PS: I literally buy Amazon Basics all the time because they’re pretty good and if it goes wrong I can probably get a full refund. Good brand equity from them.