For brands to be successful in today’s changing marketplace, they’ll need to be hungry for an an online presence–and the most satisfying sales will be found through Amazon. At least, that’s according to One Click Retail, an e-commerce insight leader that provides data measurement, sales analytics and search optimization services.
At this year’s Sweets and Snacks Expo in Chicago, Illinois, Nathan Rigby, One Click Retail’s Vice President of E-Commerce, led a presentation about Amazon’s purchasing power. As a global online retailer, Amazon has moved from a ranking of 25th among all online retailers in 2011 to third as of last year. It’s part of a larger growth trend in e-commerce, which in North America alone grew sales 15 percent in 2016– and Amazon accounted for more than half of it.
Rigby said he does not see Amazon’s growth slowing in the next decade, so now it’s up to brands and retailers to respond.
“There are far too many companies in this room that are still believing that brick-and mortar strategies are going to apply on Amazon. I am here to remind you what Darwin said,” Rigby said. “According to Darwin, it’s not the most intellectual species that survives; it’s not the strongest species that survives, but the species that survives is the one that’s able to best adapt and adjust to a changing environment in which it finds itself. That changing environment is Amazon.”
One Click has found that e-Commerce continues to be one of the largest growth opportunities for candy and snacks. In 2016, Amazon sold over a $1 billion in grocery products, a first for the retailer. Snack and granola bars, and chocolate candy held the No. 2 and No. 5 positions in grocery’s total sales that year.
That growth is continuing in 2017. In its first quarter, Amazon saw $350 million in grocery sales. So far, the snacks and granola category is still in a top category spot with $80 million in sales. Next in sales is salty snacks, bringing in $16 million in total Q1 sales, followed by snack nuts and seeds and dried meat snacks. Within these categories OneClick found some of the top brands include KIND Snacks, Wonderful Pistachios, Annie’s Organic, Crispy Green and Lundberg Organic.
So what does it take to become a top brand in Amazon? You have to be data hungry, according to Rigby. Brands need to understand not only where they stand in terms of SEO, click throughs, promotions returns and page placement, but how to apply those insights to better leverage their performance and sales. One Click’s research shows that 64 percent of clicks are on the top three items listed in an Amazon search. Their findings also note that only 19 percent of clicks occur after the first page.
“You want to hide a body? Put it on the second page of Amazon search,” Rigby said. “The first page is just that critical. Getting search right is such a big opportunity.”
Brands and retailers also need to evaluate their logistical processes to avoid ordering issues or being out-of-stock– the most common issue at Amazon, according to Rigby. Similar to store shelves, retailers should always be work to identify platform opportunities and optimize trends.
Rigby added that he is not dismissing the “impressive efforts” of retailers like Walmart and Kroger, which have already established “click and collect” programs. Still, Rigby thinks that if brands and retailers “take [their] mind off Amazon,” even to grow their other online initiatives, they will see long term impacts.
“The transformation that is going to go on over the next five, ten years, is going to be outstanding,” he said. “It is One Click Retail’s belief that if a company does not have a data-driven Amazon strategy that is integrated into a company on all levels of leadership, then you will either see underperformance or bankruptcy over the next decade. It is that transformational of a moment.”