Branded vs generic searches on Amazon

What the data says about 2019

Selling on Amazon has tremendous benefits, but it comes with a tradeoff. You get access to millions of online shoppers, but so do your competitors. Your competitors can even place ads on your own listing. It benefits Amazon and its customers to encourage fierce competition. Prices go down and product choice goes up — ad prices also go up. So, is traditional marketing and ‘brand differentiation’ on its way out when faced with e-commerce platforms such as Amazon?

There would appear to be evidence for this prediction. Nike, previously one of the most searched brands on Amazon, stopped selling its products directly on Amazon in November 2019, ending a pilot program that began in 2017. But is this portents of things to come, or a poor choice from a large established brand? 

One very interesting question about the value of selling on Amazon is what customers are actually doing on the platform. Do they come to Amazon looking for a specific product? Or are they using Amazon to browse the market? We’ve done our own analysis of search trends near the end of 2019 to try and answer this exact question.   

Browse vs discover strategies

It appears that Amazon customer’s behavior has shifted from a brand-driven to a needs-based decision process - although this can vary a lot by category. Unlike on social media where shoppers follow particular brands, on Amazon they are most often searching for a need.

Amazon branded search terms

In November 2019,  we looked at how many brand searches were being carried out and in what categories. 

According to our research, 80% of keyword searches on Amazon are generic. That means consumers are searching for “running shoes men” or “tennis shoes for boys”, rather than looking for brands such as Adidas or Nike.

However, there is a silver lining for brands, according to similar research carried out by Marketplace pulse, the more popular search terms are more likely to be branded — 74% of the top 10,000 and 68% of the top 1,000 search terms in the US included a brand name. For example, Apple, iPhone and Nike all remain very popular search terms, even though non-branded alternatives are growing. In our research, the top branded categories were entertainment, toys and apparel/fashion.

A Feedvisor’ survey also found that nearly 75% of consumers said  brand name was an important factor when selecting a product, and 59% of high-volume/daily Amazon shoppers cited brand name as a very important factor when selecting a product.

Can advertising build a brand?

With the growth of generic searches, branding is crucial for differentiating your product, building a connection with shoppers, and establishing trust — so is advertising the way to go?

Amazon advertising is growing beyond its product marketing roots (in the form of Sponsored Products) and moving to offer more sophisticated Sponsored Brand and Sponsored Display ads. Amazon DSP can even be used to advertise on video and TV. Amazon is going after ad budgets beyond the bottom-of-the-funnel ads where a click leads to a sale. 

Advertising on Amazon remains one of the fastest-changing aspects of the platform, with new advertising tools being added at an increasing rate. It’s interesting that Amazon is now pursuing top of funnel ad dollars to enable brands to counter the “lowest price-gets-the-sale” algorithms that are the basis of Amazon e-commerce. 

An example of this is Amazon Live. US-based sellers enrolled in Brand Registry can engage with customers in real-time and drive sales using interactive livestreams with Amazon Live. New in 2019, customers can now Follow brands that stream on Amazon Live, allowing sellers to connect directly with customers about their products and brands, and build an audience on Amazon.

The value of brand value 

Any company would rather sell on value rather than cheaper price. Sellers on Amazon have to create the perception of equal or greater value. For example, shoppers may have seen good reviews or had a good shopping experience. They may have tried the brand’s other products before and liked them. In these cases, the choice becomes simple. 

Sellers need to tell their ‘brand story’ through all the ways that they touch customers on Amazon. Whether it’s the first picture that draws them to click on a product, or the diagram and video that explains the benefits of a product. 

Another brand builder is Amazon storefront. Amazon has given Sellers the ability to create a better experience for shoppers to learn more about a brand. Sellers can fill this storefront to look much more like their website — with product videos, brand videos and infographics. A storefront will display all of your products in one central location.

To officially be registered as a brand on Amazon, you must have a trademark. With a trademark, you can apply for Brand Registry within Amazon. This gives you control over your brand, protecting it and allowing you to tell your story on Amazon.

Sellers need to be focused and 100% committed to relationship building and letting the world know what your brand stands for. When building a brand on Amazon, you have to think about the entire customer journey. 

Building a brand on Amazon can be boiled down to:

• Be creative in getting customer reviews. 
• Build your brand away from Amazon (if you can) at the same time as you are building up your Amazon business. 
• Exploit your competitors’ strengths and weakness: e.g.tracking the keywords on high-ranking products, then mining their negative reviews 
• Keep your delivery promises
• Focus on customer success

The perceived threat of Amazon Basics

There is a theory that by exploiting its own customer generated data, Amazon can launch brands  and capture most of a category’s sales. So far, there is no evidence that this is working — so even though it may be a strategy, it is not yet a threat.

Although Amazon has been successful selling basics under AmazonBasics and Amazon Essentials, the number of unsuccessful products and brands would indicate that the company doesn’t quite have it thought out yet.

What works for launching commodity batteries AmazonBasics products doesn’t necessarily work elsewhere. For example, in the beauty category, brands have to be built on customer loyalty, social media following, and innovative products. This is a lesson that sellers need to take on board. 

An interesting view from MarketPulse: “AmazonBasics is still not a brand. It’s a collection of products for when the brand doesn’t matter”.

Given the increased questions on anti-trust, inventory risk, and the growing importance of third-party sellers, Amazon is more likely to tread softly on creating private label brands in the near future. 

Be careful out there

Brand differentiation is a long-term objective, not a one-off labelling exercise.  By including brand differentiation as part of your strategy, you can avoid the “sea of sameness” and provide customers with relevant, differentiated and trusted products.

As our data shows, with an increasing trend to generic keyword searching, it will be more and more important to ensure your advertising and listings keep your products in front of the customer. The trust in your brand will then lead to your products being clicked and bought. 

For a more detailed view of how you can use analytics software to achieve this, we have written an ebook on how to make sense of your Amazon customer data.  

But there are areas to watch out for. Even if you establish a brand on Amazon, it’s a constant battle to stay relevant. According to Marketplace Pulse, in the headphones category, there were over two thousand different products from over 700 brands that were one of the top 100 best-sellers in 2019.  More than half of the brands were in the top 100 for less than five days, and 67% of the brands were in the top 100 for less than ten days.  

However, some brands were in the top 100 every day of the year, including Anker, Apple, Beats, Bose, Mpow, and Panasonic – demonstrating that for those that are committed,  brand differentiation is a worthwhile long-term activity.