In Q1 of 2017, Luzern and WBR surveyed over 130 senior decision makers at major manufacturers in Europe and in the USA to learn about their relationship with Amazon.
No matter the country, no matter the vertical, this study made clear that all brands expect both pain and gain over the short and long term working with Amazon. Now that the online market is more mature, the total cost of Amazon as a channel is coming under more scrutiny in companies worldwide, and this scrunity is surfacing some very interesting findings related to the future of Amazon.
You can read our full report Are brands too dependent on Amazon for their eCommerce strategy? by clicking here, but here are 5 key findings shedding a bit more light on the future of working with Amazon:
1. All companies agree: no matter the share of online revenue going through Amazon right now, the future belongs to companies who diversify their eCommerce strategy
Brands historically relied on a network of retailers and resellers to bring their products to market, but now have a much lower barrier to reaching their customers directly.
2. Brand initially go to Amazon because of its low cost of getting to market, but once live they realize they are losing control over their brand and pricing
Amazon are looking out for Amazon first. Not only do manufacturers find it difficult to protect their brands, but the lack of ownership over end customers means this channel will never grow the value of a brand.
3. 40% of manufacturers use Amazon as an important pillar of online sales
Amazon delivers high sales in the short term. This is a slippery slope however, as in the long term the channel hits brands where it hurts: margins.
4. Looking into the future, only a quarter of manufacturers believe that Amazon will be a high sales opportunity.
Clearly, manufacturers realize that this channel may be reaching a plateau.
5. Manufacturers are seeking to diminish their reliance on Amazon by diversifying their online strategy over the next five years in 2 key ways
Most are naturally focusing on direct-to-consumer online stores in new markets, but a significant number of brands are looking to use social media to directly sell products.
If you’d like to find out more about how companies work with Amazon and their plans for the future, you can download our free White Paper Are brands too dependent on Amazon for their eCommerce strategy? by clicking here.