90% of UK shoppers use Amazon
A new study by the market research firm Mintel has revealed Amazon's influence on UK shopping behaviour. Almost 90% of UK shoppers use Amazon and 40% have access to its Prime subscription service. Most Amazon shoppers visit the online retailer at least once a month and just under a fifth visit it once a week, underlining the retail dominance Amazon has gained. Its core categories of books, DVDs and video games are still the most popular purchases, according to Mintel. They estimate that as many as 15 million people in the UK, just over a quarter of the adult population, are now signed up to Prime. A further 13% of people share access through someone else’s account.
Amazon makes move to cut unprofitable vendors
This week, Amazon has been reaching out to select vendors notifying them of the elimination of future PO's, Direct Fulfilment (Dropship) privileges being suspended and vendor accounts going under review. Other vendors received no news and were panicked when the flurry of PO's from Amazon never arrived on Monday.
Amazon is doing this to improve their profitability and focus their resources around the top brands across their categories. Whilst not explicitly asking vendors to move to a seller relationship, they have made this option more attractive by reducing fees in some categories and improving the services, functionality and data analytics of the Seller Central platform.
Buy Box Algorithm changes in the US
It appears that Amazon is adding a new function to the equation that determines Buy Box ownership in the US - location. Amazon has developed and is currently testing a regional Buy Box feature that is dependent on a customer’s location and a brand’s inventory in an Amazon fulfillment centre. Not all fulfillment centers have every product in stock, so in order to provide the best experience and easiest route for Amazon Prime 2-day shipping, they are varying the Buy Box owner based on the consumer’s proximity to the warehouses that have the product in stock.
While there’s no sure-fire formula to winning the Buy Box rotation, there are minimum criteria you must meet if you want to be in the running. Historically, the factors of the Buy Box equation have been: ASIN sales, customer feedback on orders, and product reviews on the detail page.
Adding location into the equation of winning the Buy Box could mean another opportunity for Amazon Vendor’s to consistently win as their inventory is much more widespread compared to Seller accounts participating in FBA (Fulfilled by Amazon).
FBA vendors will need to ensure that they have plenty of inventory across all regions. In addition, they must also select 'Distributed Inventory Placement' for their FBA shipments as the stock will be sent all over the US faster, giving you a better chance of winning the Buy Box.
Amazon Influencer Programme
Although this is not new to Amazon (it's been live about a year), we wanted to tell you about the Amazon Influencer Program, as we're sure very few of our readers are aware of the function.
The Amazon Influencer Programme allows influencers to get their own presence on Amazon, which they can customize and curate with products they recommend in videos on YouTube or pictures on Instagram. They are given a special vanity URL (amazon.co.uk/shop/handle), which allows them to promote their Amazon presence verbally to your followers. When customers visit their page and shop on Amazon, they get compensated for purchases in a similar fashion as you would with the Amazon Associates program. The commissions can be as high as 10% and its rumoured that Amazon pays more for their own brands.
In 2019, Amazon is spending more time and money recruiting and promoting these influencers as they see the opportunity to attract more shoppers and build advocacy for their brands. Over the past couple of months numerous "micro-influencers", with anywhere from a few hundred to a few thousand followers, have been accepted to Amazon's programme, according to posts from them on social media. Amazon reps have solicited some creators about joining the programme, though it's open to anyone who applies through Amazon's website. Amazon has also been running ads on Instagram targeted at influencers.
Any vendor or seller on Amazon should identify the Amazon influencers in their category and engage them with their products. Not only could they get a positive recommendation from trusted advisors, but they will also increase their visibility to Amazon shoppers.