Updated Amazon Predictions – 2020 and Beyond with Pandemic Considerations

Updated Amazon Predictions – 2020 and Beyond with Pandemic Considerations

Ideoclick’s VP of Strategy, Andrea Leigh, has recorded her updated Amazon predictions for the near future, with the current and future effects of Coronavirus/COVID-19 pandemic in mind. Many of the ecommerce expert’s earlier set of predictions have proven to be true, which you can read in this post reviewing the previous Amazon predictions compared to actual Amazon market happenings. Within the updated Amazon predictions video, topics including Amazon healthcare, Amazon fashion, and Amazon supply chain are discussed.

We help our clients navigate the complexities of selling on Amazon to boost brand velocity:

Learn More
Built In Seattle Spotlight: The Agility Behind the Success of Ideoclick

Built In Seattle Spotlight: The Agility Behind the Success of Ideoclick

In a recent Built In Seattle article, Stephen Ostrowski covers the foundational elements of Ideoclick’s success. By interviewing Ideoclick founders Justin Leigh and Tom Furphy along with Client Success Director Melissa Ardavany, Ostrowski explores the nimble philosophies, tech development and structure that has enabled Ideoclick to become a leading e-commerce consulting firm today. Read the full article which includes information on our current open career opportunities.

Brand Survival Strategies during COVID-19 – Move Quickly; Perfection is the Enemy

Brand Survival Strategies during COVID-19 – Move Quickly; Perfection is the Enemy

Much of the discussion around COVID-19’s impact on commerce has focused on reactionary measures to brand survival. That is a necessary and sensible strategy—in the short term. However, companies that are using this unexpected economic earthquake as an opportunity to overhaul strategies, and look to the future in a proactive way, are much more likely to secure post-pandemic viability.  

A consistent thread throughout our entire Deinvest to Reinvest Virtual Leadership Summit has been that smaller brands are showing more expedited agility than the “big guys.” Some of that nimbleness relates to the way small brands engage with their customers.  

Jeriad Zoghby of Accenture Interactive articulated this point in the “Future of Your Brand” session of the summit, moderated by Dialogic Group’s Thom Blischok. “I think we’re going to see brands get from behind the pallets and actually have to engage consumers directly, which is long overdue. The role of the brand has to broaden dramatically. Not only as a ‘hands-on’ approach, or top of the funnel. [Companies] have to realize the brand experience has to be everywhere.” 

Stagnancy Stinks

One area business leaders must reassess when revamping their brand survival strategies is their core values. Panel member Chase Jarvis of the international online creative education platform CreativeLive opined that brands have traditionally been too self-serving. “It’s not a question of if you should change, it’s what you should change. Now is the opportunity to look at your brand strategy, your roadmap, and decide proactively what kind of company you want to be and the relationship you want to have with your consumers on the other side of this.” 

Jarvis explained that increased differentiation, segmentation, depth, and richness will be key components for brands that truly aim to serve their consumers—and their communities. “Can you build a community? Because that’s increasingly a lens through which consumers will make choices,” he added. 

Why Data Is Crucial for Informing the Customer Story 

Data analysis and data interpretation are foundational for building the consumer experience. As this experience evolves, greater attention must be paid to the intricacies and nuances of the data in order to appropriately map to the customer story. In turn, brands can strategically focus on creative ideas that resonate with the consumer audience.  

“We’re not talking about divorcing what drives brands from creative ideas but how those creative ideas are sourced and disseminated. The idea needs to originate based on the data,” noted Ben Winters, the managing director of client success for Ideoclick. “It’s incumbent on brands to directly interact with their consumers, and I think many of the ideas that will drive brands forward will come from looking at that data.” 

Zoghby and Winters both agreed that brands need to start thinking about, and being comfortable with, putting creative in unexpected places (e.g. Product Detail Pages/PDPs)—and then relying on the data to inform future strategies.  

“In digital, we should be testing everything. There’s no excuse for not testing. For anybody who is scared of putting creative in your PDPs, just test your way in. There’s no harm for the short term; just ensure you’re building your long-term brand story,” advised Zoghby. 

No More Silos: Why Integration Among Teams is Vital 

A significant challenge, for bigger brands in particular, is a siloed approach within organizations. Sales, marketing, operations, and product development teams work independently, resulting in organizational disconnect. Smaller brands may be able to be more agile in reinventing the way teams integrate, whereas bigger brands may continue to struggle. Even large, established brands that have enjoyed success for 20, 40, or 60 years need to address the detriments of siloed activities or risk “really getting smacked around,” as Jarvis put it. 

Additionally, brands need to better integrate ecommerce into sales and marketing efforts. “The challenge is to [integrate] so that ecommerce channels aren’t merely a digital afterthought, where we’re refactoring assets and communication modes and models from traditional to digital. Digital now truly leads the way,” stated Winters. 

Brand Survival Strategies Connect to Brand Mission

The pandemic’s impact will continue to reverberate for months; potentially years. All panel members agreed brand survival strategies depend on three critical attributes: a willingness to change, the speed and agility to do so, and an “all-in” approach to collaboration.  

“I think so many people want to wait and see. But here, perfection is the enemy of good,” cautioned Jarvis. “In a world that favors speed, dynamism, a willingness to change—identify what you’re going to do differently, what you are going to stand for. There are a number of axes under which you could be different. Decide proactively what you’re going to do, and start on that journey yesterday.” 

Tune in here to watch the experts discuss these brand survival strategies in the “Future of Your Brand” session video from our Virtual Summit.  

Timely Check-in on the Previous Amazon Predictions for 2020 and Beyond

Timely Check-in on the Previous Amazon Predictions for 2020 and Beyond

Back in November 2019, Andrea Leigh, Ideoclick’s VP of Strategy and Insights, recorded her predictions for Amazon’s business during 2020 and beyond. Since then, the ecommerce industry has shifted dramatically, but many of these Amazon predictions are still very relevant, and are especially interesting today.  

Leigh preceded the content of the video with the statement that her Amazon predictions are not based on any inside information. Leigh’s predictions are formed through her knowledge of Amazon’s behaviors in the past, Amazon information in the news, and her personal opinions. 

Prediction #1: Amazon Will Spin-Off a Business Segment 

The prediction was that Amazon will spin-off its AWS and/or its advertising business. This was based on the observation that Jeff Bezos prefers to resolve issues his own way instead of waiting for the government to get involved or provide guidance. For example, recounting the reaction to the headcount tax in Seattle, Bezos responded by stating that he will stop hiring in Seattle.  

“This [spin-off move] would distance Amazon a little from the question the government is asking about whether they are taking funds from highly profitable segments and shift to help their retail business, therefore making their retail anti-competitive,” Leigh explained. 

UpdateThe heat is on with Jeff Bezos being called into a congressional antitrust hearing to testify along with other technology leaders from Google, Facebook, and Apple. Although Amazon is not being charged with antitrust violations at this hearing, it’s a solid reminder that the government will always be curious when one company wields such a vast amount of power.   

Prediction #2Grocery Consolidation 

Considering the many different grocery formats Amazon has (Amazon Fresh, Prime Now, Amazon Go, Pick Up Points), Leigh’s next Amazon prediction was that they will create some integration between the different formats. She noted that the platforms are growing and likely becoming more costly to operate separately, which creates a good business case for consolidation. “I would expect some integration here,” she said. “Maybe some rebranding [to alleviate format confusion] and potentially some consolidation.” 

Update: Now that consumers are navigating social distancing orders due to the COVID-19 pandemic, Amazon Fresh has become a heavily relied-upon method for many families to receive their groceries. This may lead the direction for Amazon’s grocery consolidation decisions.  

Amazon Pantry has recently paused taking new items, indicating that it may be folded into another program. Ultimately, there’s still a need for Amazon to at least repair the confusion around how the different Amazon grocery formats work.  

Prediction #3: Retail Acquisitions for Amazon 

Leigh predicted more retail acquisitions would be being targeted by Amazon, specifically in the small drug-store chain and fashion categories. An Amazon purchase of a small format drugstore chain would enable the company to gain an instant geographic footprint versus negotiating leases one by one, noted Leigh. She explained that this model can be especially helpful in creating locations for order pickup in more densely populated neighborhoods with apartment dwellings where ecommerce tends to struggle.  

Fashion is another acquisition category Leigh predicted. With Nordstrom aligned in technology, innovation and customer focus, she thought they would be an ideal acquisition target. Amazon is after credibility in the fashion space, she explained, and was previously unable to achieve it.  

“They’ve been unable to break into this space in a meaningful way,” Leigh said. “I think [Amazon] believed in the past that they would be able to sign some higher-end [lines] and fix their site to make the navigation and discovery experience different for fashion.”  

Leigh noted that Amazon’s private label fashion assortment has become interesting and could conceivably be sold through acquired retail locations.  

Update: As the coronavirus pandemic has caused tremendous economic strain and even closures for retailers, especially in the fashion sector, the price tag for another retailer acquisition could be decreasing. The company’s recent talks with JC Penney wouldn’t gain Amazon much fashion credibility but could provide them with real estate for their own fashion endeavors.  

From a fashion image standpoint, Amazon has made progress with the introduction of Amazon Prime’s “Making the Cut” fashion reality show featuring Heidi Klum and Tim Gunn – enabling them to become affiliated with a higher fashion sense and bridge the gap between fashion and online purchasing.  

In March of this year, Vogue and the CFDA partnered with Amazon to create Common Threads fashion storefront to support the financial pressures independent designers are experiencing during coronavirus. The storefront, promoted heavily in the Amazon Prime Wardrobe try-before-you-buy shopping service, is where fashion-savvy consumers can find designer $1,200 summer dresses and $85 face masks. This has opened yet another area where Amazon is sidling up to well-respected brands and hand-selected designers to improve its fashion reputation.  

Prediction #4: Voice is the New Search 

“I think we’ve all been underestimating the power of voice,” said Leigh, when talking about her fourth Amazon prediction for Amazon’s upcoming year. She explained how her belief is that Amazon’s entry into Voice is not directly about shopping, but about the company’s quest to know the consumer.  

The reason Amazon wants to know a consumer’s likes, dislikes, and search behavior is for them to continue growing as a company. “They need to figure out how to continue to monetize the traffic they’re experiencing on their website.”  

With a shift to thinking about Amazon as more of a search engine than a retailer, the company can leverage their traffic on a whole new level, Leigh speculated. There’s a compelling reason why Amazon, through its Alexa Fund, has invested tens of millions of dollars to help the Voice industry move forward, and it will be interesting to watch the platform and voice technologies open new possibilities in the future. 

Update: Amazon has announced a huge increase in the use of Voice in the home for music, skills, and search while people are spending more time in the home due to the COVID-19 pandemic. “In many ways, Alexa acts as a search engine but without the need for an extra device. There’s also a more personal element to the voice interactions,” said Tom Taylor, SVP for Amazon Alexa in this recent Geekwire article

It also seems that every week, new and more affordable products are being added to the IoT household voice-controlled list. The depth of data collection in this realm is enormous and will be in high demand by CPG companies. It may be a matter of time before that data becomes a selling point for Amazon’s demand side platform (DSP) advertising. Amazon can keep its commitment not to store personal information from its Alexa smart speaker devices while still leveraging the behavioral data. 

We frequently post tips and insights on how to succeed on Amazon. And, be sure to subscribe to our YouTube channel so you will be alerted when our next prediction video is aired!

Check Out Our YouTube Channel