Online retail Transforming the challenges of selling on Amazon into opportunities
At the start of the pandemic, retailers were rushing to launch sales on Amazon after their stores were forced to close. But this was generally an emergency response rather than a coherent e-commerce strategy.
Driven by the pandemic, online shopping is booming. In the UK, three-quarters of consumers shop online as well as on the high street. This shift in consumer behaviour has led many brands to bolster their e-commerce sales strategy. This presents new challenges as well as opportunities.
Critical challenges when selling on Amazon
- How can I retain control over my brand?
If you speak to retailers on Amazon, they always say retaining control over the brand is challenging. This results in tighter profit margins, conflict in the sales channels and the risk of generating little or no profit from certain products.
- Defining a price strategy that ensures profitability
Setting an average order value that’s in line with the retailer’s price strategy is no easy task. Selling on Amazon often means less price control, which can have a negative impact on margins and profitability.
- Navigating through the dynamic e-commerce landscape
A big part of this challenge is keeping up with technological progress, such as artificial intelligence (AI), virtual reality (VR), algorithmic measurement, customer experience management (CEM), etc., which is changing the online shopping experience.
- Reaching target customers through effective advertising
While high-quality content is a key part of successful retail on Amazon, rival products mean more brands are trying to win new customers and generate more sales through advertising. This can make it hard for retailers to reach their target group. By advertising on Amazon, they can improve their brand profile and raise the visibility of their products. This can then soon be transformed into cash.
- Competitive product pricing
Many retailers find product pricing difficult owing to the fierce competition.
The challenges of direct sales on Amazon are one of the main reasons why e-commerce decision-makers agree that while selling on Amazon is a key element in their e-commerce concept, their future profitability depends on a more comprehensive e-commerce strategy.
Transforming the challenges of selling on Amazon into opportunities
Although retailers believe selling on Amazon is of major importance to their long-term survival, Amazon’s complexity creates obstacles that hinder retailers in achieving their goals. To survive on Amazon, retailers need their own Amazon strategy. If they lack experience, they’re well advised to call in a seasoned consultant. With the right partners, retailers can take advantage of cutting-edge technologies to remain competitive and firmly establish their business in the constantly changing Amazon landscape.
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