Succeeding on Amazon Requires Self-Reflection From Brands

This webinar served to release some new research that I worked on with collaborator Russ Dieringer from research firm Stratably, investigating the relationship that brands have with Amazon from an organizational and business prioritization standpoint and further examining if & how Amazon growth rates vary due to those factors. 

It turns out that 4 organizational factors are responsible for 16% higher growth for brands. Those factors include: executive buy-in, matching purpose to KPIs, supply chain prioritization, and willingness to test and learn. 

Download the full report, and slides, or watch the webinar replay here.

The statistic that got the most reaction during the webinar and from industry folks that I have shared early versions of the research with, was around the mismatch between a company’s stated objectives, and the metrics they are tracking. Distilled down to the most basic level, a company can be prioritizing growth (market share, share of voice, brand recall, etc), or it can be prioritizing profitability. 

But what we saw in the data was that the majority of brands that have a stated objective of profitability are tracking revenue growth as a top metric. And the majority of brands that have a stated objective of growth, are tracking profitability-oriented metrics like ROAS. 

This was raw proof of what we see often holding brands back in our work as marketplace advisors at Bobsled - a shaky understanding among many brands on what goal they hope to achieve. This leads to counter-productive strategies being employed - like low-ROAS, top-of-funnel growth strategies being deployed for a brand that actually is trying to focus on its unit economics. 

Poor awareness of your true objective is then exacerbated by focusing on metrics that don’t contribute to the objective. Metrics like ROAS are easy to calculate, and typically front and center on a retail media dashboard, but ROAS may not be the primary metric to be tracking if your objective is to grow the market share of your category. Obsessing over ROAS usually has the opposite effect. 

In some earlier work, we did this year, my colleague Matteo Bizon and I presented a new model for allocating retail media spend - based on the concept of the marketing funnel. The core argument was this: instead of allocating their media budget out to retailers based on their historical sales contribution, brands should allocate media spend based on the segment of the marketing funnel they are trying to maximize  - per their objective. Each media network of scale now has an array of campaign options that span the marketing funnel from awareness to consideration to purchase. 

Brands with a growth objective should focus on campaign types at the top of the funnel across their retail customers. Brands with a profitability objective should focus on bottom-of-funnel campaign types across their retail customers. Of course, the devil is in the detail - many brands have products at different stages of their product maturity cycle, with different objectives requiring different strategies. But the static, rear-view-mirror perspective of allocating media budgets based on last year’s sales data, is not responsive enough to the pace of change or opportunities in the retail media landscape.  

Change must come from within

Traditional karate places emphasis on self-development. Before combat and self-defense skills are learned, karate requires developing a proper psychological attitude toward the art. These include perseverance, fearlessness, virtue, and leadership skills.
We believe that every brand can become an Amazon “black belt”- skilled and practiced in the art of defense and competitive combat. But the brand’s internal psychological profile must be developed first.

Our research - derived from self-assessments from 109 consumer brands - shows that many brands have some “self-development” to do, in order to confidently align their vendors and teams on a common goal, and use the proper tools (campaign types designed for different stages of the purchasing journey) and metrics to measure their progress. If this is the case for your brand, know that you’re not alone. But if you can align your company on the objectives, metrics, and strategy - you’ll be well ahead of your components.

Book a free consultation with the Bobsled team below.