THE CLARUS Blog

Distribution Versus Loyalty: What’s More Important for Brands?

Where do you start searching for a new product?

Did you know that nearly 50% of new searches start on Amazon?

While that’s a huge number by itself, Google accounts for almost 35%.

So, if roughly 85% of new product searches start on Amazon and Google, shouldn’t that be where you sell your products?

 

Who Owns Your Customer Relationships?

Amazon and Google are gateways to many product searches.

Part of marketing’s job is getting in front of the right buyers at the right time and these channels can be highly impactful.

But you don’t own the relationship.

You’re always one algorithm change away from losing your marketing channel.

If Amazon puts out a cheaper generic version of your product (i.e. Allbirds), why would it promote your product over its own?

The revenue is great, but there is a high risk in not owning the customer relationships.

Marketers have seen this over the years with changes in social media or search algorithms, and retail is going to see this effect as well.

 

Should You Pull Your Inventory From Amazon?

No one is saying to pull all your inventory from Amazon but consider how you can create deeper relationships with your customers.

Creating deeper customer relationships is the most important ingredient in your brand’s ongoing success.

Reward users for buying directly from you. You may not be able to offer free 2-day shipping, but does your loyalty program give customers a reason to ship directly with you?

How can you personalize the experience for your users?

Amazon is going to personalize it for them as well, but more often than not, it’ll be offering them products from competitors.

 

Real Brands Owning Real Customer Relationships

Nike ended its two-year relationship with Amazon late last year to focus more on its direct-to-consumer business.

Nike focuses on elevating consumer experiences through more direct, personal relationships.

Look at a smaller company like Ranch Road Shoes.

Amazon represented 50% of Ranch Road Shoes orders, but the latter left, taking a revenue hit, but the result wasn’t as bad as expected since Amazon was cannibalizing orders that would have gone to Ranch Road Shoes’ site.

If you build loyalty with your customers, they’re going to seek you out where you are.

Learn more in the quick video below:

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