There’s no doubt about it: today’s customer buys nearly everything they need on Amazon. While many shoppers still turn to traditional retail for their beauty needs, more and more are turning to Amazon every year. For small brands, an Amazon storefront can be a big win: an opportunity to reach new customers and grow your business without losing a heavy portion of your margin to a traditional retailer. To learn more about what brands need to do to be successful at Amazon, we sat down with Renee Parker, a former Amazon UK executive who now guides premium brands in shaping their global Amazon and digital strategies.
What is the benefit to selling your beauty brand on Amazon?
Amazon is an undeniable part of your customers’ journey today and cannot be ignored. The online marketplace now outpaces Google as the go-to destination for product searches and consistently ranks on top as Millennials’ favourite brand and eCommerce destination. Your customers are on Amazon already; at a minimum, they are researching your products – checking out real customer reviews, ratings, pricing and educational content – at a maximum, they are hoping to purchase your products on Amazon, both for the first time and or to replenish. In my view, gone on are the days where Amazon is a neutral force for your brand – it is either brand positive or brand degradative depending on the state of your brand on the website. Interestingly, in my conversations with investors, they too view an uncontrolled Amazon presence as “sloppy” and expect a brand’s management team to own its look and feel there, even if they are not actively promoting sell-through on Amazon via advertising or other levers.
In addition to the defensive reasons above, in my experience, premium beauty brands’ initial misgivings about working with Amazon often give way to a surprisingly positive outcome (if managed properly, which is another topic) as Amazon globally can play an unexpectedly helpful strategic and tactical role in growing your brand, enhancing your premium positioning, and acquiring new customers. It is key to understand that how you interact with Amazon should be based on exactly the role you expect the channel to play for your brand, in this specific moment in your brand’s journey, in a specific marketplace. To understand this, a brand must have a well-developed Amazon strategy with buy-in from investors and C-suite management.
Are there any marketing and sales tips for brands to increase sell-through via Amazon?
Amazon is not a “build it and they will come” proposition. Whilst the site has millions of visitors daily, there is also immense competition from other brands and products. Nearly 90% of traffic to your product listing is driven through keyword search coming from the search bar. Furthermore, 68% of clicks go through the top 4 product search results, and 70% of customers do not go past the first page of search results. These figures demonstrate the importance of achieving top search results for the most relevant keywords to your product, which can be achieved through a combination of organic optimisation (ie great content optimised to the Amazon algorithm) and paid advertising.
What are some hurdles beauty brands can encounter? For example, gated categories, etc?
There are two main ways to sell on Amazon: 1) as a third party seller which, unless you are attempting to list a product in a restricted product category (ie ingestible CBD), there is very low barrier to any beauty brand listing product; 2) as a first party vendor, which is always subject to Amazon approval and can pose additional barriers to entry such as in Premium Beauty, where Amazon restricts participation to brands that comply with its tenets around positioning, existing premium distribution, existing third party sellers and the brand providing full selection to Amazon. One of the benefits of getting into Premium Beauty, however, is that Amazon will proactively remove all unauthorized sellers of your brand, which of course is wonderful in terms of a brand owning its brand equity and revenue entitlement onsite.
How do brands take advantage of the algorithm to gain more visibility with consumers?
Amazon is customer-centric and its algorithm reflects this. At a high-level, Amazon is attempting to surface the most relevant product results for any keyword search. Some of the characteristics that Amazon places value on when determining relevance are number and high scoring customer reviews, number of product images/video, SEO-optimised copy, enhanced product content, low returns, high conversion, and the list goes on. To Amazon, a product scoring well on this list of inputs is a sign that customers are finding the product attractive, purchasing it, and are happy with their purchase. Beauty brands should understand that whilst similar to a DTC model in principle, Amazon’s algorithm is unique to Amazon and getting your product on the first page of search results is increasingly competitive, hence why many brands now seek external advice or execution support in launching and managing their Amazon presence.
In addition to the organic content above, Amazon Advertising, in particular its pay-per-click tool suite, is more or less a required investment for brands serious about driving sales through Amazon. Amazon Advertising was only launched a few years ago and its growth in importance and popularity have also driven up its price across major keywords, especially during high demand periods such as Q4. We advise brands to get their organic content onsite and optimised before starting to invest in paid search or they run the risk of paying to drive traffic to incomplete product listings that won’t convert. The magic combo on Amazon is driving traffic to high conversion content (and then being in stock with a Prime delivery message once the customer is ready to purchase, of course!)
What are some suggestions for US brands to utilize Amazon UK?
The UK is an exciting place right now for beauty ecommerce: In 2021, Sephora acquired FeelUnique and The Hut Group – owner of LookFantastic, a giant in its own right – acquired Cult Beauty, shaking up competition in the pure player beauty segment. Against this backdrop, Amazon UK is growing massively year on year with no signs of slowing. When comparing Amazon.co.uk to the beauty pure players mentioned, Amazon continues to be unparalleled in size and traffic so shouldn’t be overlooked as a market-entry vehicle or complementary channel to UK brick & mortar. Brands entering the UK should not believe, however, that Amazon can replace traditional PR and influencer activity. I also find that the traditional magazine circuit (ie Vogue, etc) is probably more important for a brand trying to break into the beauty market in the UK today vs in the US. For brands already in the UK, once you have unauthorized resellers selling your product on Amazon or have achieved a certain brand awareness level, your customers are definitely searching for you on Amazon so it’s probably not wise to allow someone else to own your brand image there or capture your revenue entitlement.
Thanks, Renee!
About Renee
Renee Parker is the Co-Founder and Director of Strategy for Invinci Group, where she leads the strategic advisory practice for premium brands and investors shaping their global Amazon and digital strategies. Prior to Invinci, Renee led Amazon UK’s Premium Beauty business for four years where she drove business development, category strategy and top pan-EU vendor performance. Renee is a member of the British Beauty Council Advisory Board. She is active in the start-up community as an angel investor and advisor, focused on female and underrepresented founders, and serves a range of start-ups as a Huckletree Ambassador.
Before joining the beauty industry, Renee pursued a decade-long career in impact investing and emerging markets sales and trading at J.P. Morgan, New York, and Deutsche Bank, London. Renee earned her MBA from The Wharton School. She holds her Diploma in Cosmetic Science from the UK Society of Cosmetic Scientists, of which she is an active member. She is frequently featured as a keynote speaker and panellist (INNOCOS, Amazon Beauty x British Vogue, Beauty Tech London, etc) and has served as a Special Jurist for Cosmoprof Bologna and India Awards