Amazon has launched a new service, aimed at promoting original and desirable items to online shoppers – but how will this impact ecommerce companies currently trading through the site?
As of this week, when consumers log onto the market place, they will see a new section called Amazon Exclusives. This area features hot new brands, trendsetters and award winning items, all available through the marketplace.
The project is designed to showcase quirky and innovative products to shoppers, at the same time as positioning Amazon as a trailblazer for game changing brands.
However, the goods aren’t quite exclusive to Amazon, like the title of its new section might suggest. In fact, retailers are allowed to sell them directly through their own ecommerce websites and in their own physical stores – just not release them online through any other third party platforms.
So, what does this mean for retailers that get involved in the Amazon Exclusive scheme? On the positive side, it will make their products more coveted and increase sales via Amazon – and possibly through other sales channels as well.
However, a sudden spike in interest can impact negatively on a brand if their Amazon inventory management solution is not integrated with activities in other channels.
The launch of Amazon Exclusive has the potential to cause logistical headaches for unprepared ecommerce retailers, as an increase in orders from the online marketplace could drain stock that is currently be allocated for direct sales websites or a store.
To add to the strain, Amazon will be responsible for fulfill orders for its Exclusive section, rather than the seller, which means all goods will automatically become available for two-day shipping if the buyer is a Prime member based in the USA.
This means a major increase in popularity could result in stock running out very quickly, and retailers having to take items from their other channels to fill the void. As a result, consumers who have either noticed the item when shopping in those alter alternative channels, or Amazon users who don’t buy the product at the time but decide to log back on later, may find themselves in a situation where the goods they want are sold out.
The focus of Amazon Exclusives is very much on up and coming brands, so companies without an integrated Amazon order management system could find themselves caught out if their product takes off.
If this happens, the danger is that consumers become frustrated at not being able to get the purchase they want, when they want it. Given the length of time it takes to build brand affinity with today’s hard to please shoppers, this could damage e-tailer/consumer relationships before they’ve had chance to grow.
Don’t let this be a deterrent, however. Amazon Exclusives is a fantastic platform to showcase up and coming brands, giving retailers’ ranges immediate exposure that is unlikely to be replicated by trading through a direct ecommerce site alone.
What retailers entering the scheme must realize, though, is that operation efficiency and visibility of inventory across the business will play a vital role in ensuring this level of exposure converts into an effective sales strategy.