eCommerce
eCommerce_white

eCommerce

At Highlands, we believe success is built around strategy. Letting us create and manage your digital platform gives you instant access to the best web partners for your products.

Your personalized eCommerce strategy will maximize sales and deliver results you can easily measure and will complement your traditional routes to market. A comprehensive and holistic approach will fulfill your needs and grow your brand even faster. Together we’ll create a consistent and best-in-class online retail experience for your customers.
Articles
amazon-blended-model

Amazon- Blended Model

November 29, 2017


As we have seen in the previous article, pricing varies between competitors on the same platform of Amazon. Selling on Amazon can seem easy at first however it is becoming increasingly complex all offering different benefits to the seller.  Once upon a time it would be considered best practice to adopt a single method.  Increasingly, it may be worth considering having a blended model that takes advantage of the different services available from Amazon.


There are different ways of working with Amazon. First, there is a fulfillment - Fulfilled by Amazon (FBA), Fulfilled by Merchant (FBM). Secondly, you can choose from different ways of marketing - Seller Central, Vendor Central and Vendor Express.


Fulfillment Requirements:


Fulfilled by Amazon (FBA): Yes, Amazon fulfills needs of both the seller and the customer. Amazon takes responsibility of sending your product to the customer in time.


Fulfilled by Merchant (FBM): As a Merchant, you do everything. You place your product on Amazon product listing and you ship the product to the customer after receiving an order. You’re responsible for every delay or damage in the package.


Marketing Ways:


Vendor Central: You are the first-party vendor. This is generally for big brands, where Amazon becomes your first customer. Amazon orders from you, keeps your products in their inventory and sells it to individual orders from different customers.  (Can you do FBM with Vendor Central too?  E.g. FireKing?)


Vendor Express: This is for young brands who want to make a mark in the market. Amazon supports your budding business becoming your partner. You can sell in bulk to Amazon and it markets your product in its own style and you grow your business.


Seller Central: You will be a third-party vendor. Here, you can choose either FBA where Amazon processes packs and ships your orders or ship the product on your own. Seller Central is beneficial when you launch a new product.


More than 50% of the sales happen through a third-party vendor. This is because the seller has full control over product pricing. Also, it could be a way of developing traction for your products before moving to a closer direct working relationship with Amazon. Importantly, you can use a Seller Central account to help drive more competitive pricing for products listed under Vendor Central:  Remember, Amazon is a price follower.


A few important points which effect Pricing- 


1. Competitive pricing: Every customer will look a the price and also the shipping cost. So, manage either the product price or the shipping cost.

2. Offers: Discounts, offers, cash on delivery, free products, etc. will attract more customers.

3. Reviews: This is crucial. Consumers will look at the reviews and feedback on a product before placing an order. It's important to have great seller reviews too. This leads to further positive brand exposure. All of this will help make a positive impression in Amazon's market place.

4. Less-popular product: List a product which has less competition. So, buyers will buy only from you leading to better credibility. That's an easy trick, isn't it?

5. Highly popular product: As you gain the credibility, offer a very good competitive price for your product to gain more attention.


Where possible, become a Prime seller. It’s a great way to raise customer demand, gain confidence and trust of the consumer, increase loyalty and ensure your product is delivered nice and quickly.


Lastly, a Seller Central account is a great place to launch new products quickly and within your control, or perhaps liquidate those products that didn’t quite work out.


Amazon is turning in to be a leader in the retail segment both online and offline, becoming a single stop solution for both vendor and the customer. In the chart below (source: MKM Partners) we clearly see how Amazon is taking a major chunk of the retail industry.


Gordon-Christiansen-1

 

Simply put, go ahead, invest in taking a space in Amazon and see your brand grow with more sales and reach!  But remember, there is not cookie cutter solution.  Think ‘broad’ when considering your Amazon strategy.


And, when you’re considering your whole eComm strategy you should think even broader.  We’ll tackle that in our next blog.



Gordon-Christiansen-1


Gordon Christiansen

C.O.O, Senior VP, Marketing

Partner at Highlands




Amazon price leader blog image

Is Amazon a price leader?

October 27, 2017

If you shop on line you’ve probably noticed that the price on Amazon for the same item can be different across many marketplace participants.  You may have noticed too that prices will change over the course of a day and, at times, over an hour.  Pricing is dynamic.  There are many factors driving dynamic pricing but the most critical is that the key sellers have algorithms that responds to competitors’ pricing.  For this reason, a price leader in the e-tail market is far more disruptive than in traditional brick and mortar retail.

Walmart is a globally recognized retail leader. It became the biggest retailer on the planet by being a price leader. With Amazon’s market entrance, Walmart saw its sales impacted and their stock value going down. As the leader they are, Walmart started their ‘fight back’ strategy.

Walmart has been selling online for some time however they knew they needed to improve their strategy to re-take share.  They acquired Jet.com, with a great eCommerce leadership team then, leveraging on their existing stores, Walmart started to be much more aggressive online. They offer free shipping for orders above $35 and many items are exclusively available only online with attractive discounts.

Interestingly Amazon has done a great job convincing consumers that they are the cheapest, or at least offer fantastic value for money. Attractive promotions and superb public relations has been their key to attract more customers. They slashed the prices by 43% on the very first day after acquiring Wholefoods. Prices at Wholefoods have always been at the “top-end”. But now, after the “perception management” around pricing that Amazon has engineered, customers will start to change their view on pricing available from these stores.

Amazon+ Wholefoods = Amazon retail stores (looking more like Walmart)

Because of Amazon’s great perception management, it has been very successful in managing the interests of all its stakeholders - consumers, marketplace sellers and most of all, stock holders.

 

We think this is a super smart strategy.

 

However, in reality Amazon is a price follower rather than a price leader.  Amazon is constantly monitoring their own site, across all their platforms, and scraping the entire web to find competitive pricing and adjusting their price accordingly.  One frustration from Amazon is when a ‘rogue’ trader offers highly discounted pricing on a product and negatively impacts margins.  Enter Walmart.com a price leader.  As Amazon follows Walmart.com pricing down two things often happen.  Amazon asks the supplier of that product to pay Amazon for lost margin or they suppress the item meaning it won’t turn up most searches.  In both cases this can be challenging for suppliers doing significant business with Amazon.  Through these policies Amazon is making it clear that they hold suppliers responsible for managing pricing across the internet.

 

Will this ‘price follower’ strategy change? In the United States, there are MAP agreements to contend with, but in Europe, competition laws and the approach to resale price maintenance means that MAP is not allowed. Amazon is at an advantage with its existing online presence and now its expansion into bricks and mortar. We think it unlikely they will change their fundamental pricing policy.

 

As a manufacturer, you need to carefully consider and control your product placement and pricing across all channels and platforms.  Good management will contribute to the health of your eCommerce channel as well as your more traditional routes to market. It can seem daunting but can be done effectively and profitably.  Look out for future blogs that will help with tips and tactics that ensure your pricing is in-line with your objectives as well as that of Amazon’s.

 

 Gordon-Christiansen-1

Gordon Christiansen

 

Gordon is a 54 year old Australian who was born in Denmark, lived in the UK for 27 years and now wants to live in Atlanta.  After breaking his father’s heart by leaving the family ships’ chandlering business in Fremantle, Australia Gordon embarked on a career in sales and marketing with Pitney Bowes and Canon before investing in and running an office products and graphic arts dealership in London called London Graphic Centre.  Gordon is passionate about getting corporate messaging 100% clear and how alignment between marketing strategy, execution and sales effort will enhance and accelerate market penetration for Highlands’ clients.

 

Outside family, the things Gordon enjoys the most are cricket, Australian Rules football, music and socializing with good friends, good wine and good food.  So, for anyone interested in learning the intricacies of cricket or Aussie Rules I’m sure Gordon can be bribed with a charcuteries plate and a decent red.

 

Gordon is a partner at Highlands.

Aria_Glassboard

Ghent: Amazon marketing strategy increases product views + sales

To maximize Amazon sales growth, Ghent knew they needed a single point of contact to manage promotion-management strategies for eCommerce sales. The expert team at Highlands stepped in to produce double-digit increases in sales in just six months.

The Client

Ghent offers a full range of visual communications products including whiteboards, glassboards, mobiles, traditional bulletin boards, and enclosed boards, along with accessories, to personalize, add value, and enhance the customer experience.

The Challenge

With over 50 million monthly visitors, Ghent realized that developing a sales and marketing strategy on Amazon.com had overwhelming potential for incremental sales growth. Without a dedicated team to manage content, pricing, and testing of different promotional strategies, they saw gaps in competitive pricing and targeting strategies that, if filled, could showcase product strengths. 

Knowing the immense value and quality of their products, Ghent realized a new strategy was needed to increase site exposure, decrease costs, and fully realize the immense potential of their eCommerce sales in the visual communications channel.

The Highlands Difference

Highlands’ eCommerce team helped uncover value-added strengths of Ghent’s products over the competition and assisted in developing a plan to drive incremental eCommerce sales growth. 

Highlands recognized the need for product differentiation and focused on analyzing the strengths of Ghent’s product offerings, like the fact that all products are made in the USA, using premium components. By narrowing the search relevance and strategies for their products, Highlands targeted the promotions and advertising strategy to take advantage of Ghent’s competitive strengths. 

The Results

Ghent partnered with Highlands’ eCommerce team to drive incremental sales 
growth. While the company had recently seen a slight drop in eCommerce sales through Amazon, Highlands delivered an outstanding return on investment in the first six months.

With the help of Highlands, Ghent’s sales through July of 2016 had already reached a stunning 94% of the total sales for the entire previous year. 

Optimizing the product descriptions to include targeted strategies, Highlands maximized Amazon.com’s search engine priority system. Once lost among the thousands of product offerings, customers were now able to easily find the high-quality and innovative Visual Communication Products provided by Ghent, leading to significant double-digit sales growth.

Influenster infographic header v2

Why reviews are critical for e-commerce success

February 28, 2017

A poll of over 11,000 women in the US conducted by Influenster shows how women use social media and reviews to make their purchasing decisions.  A staggering 67% of reviews were sort using mobile devices, clearly demonstrating the need for a 'mobile first' strategy when creating your e-commerce platform.

We shouldn't be surprised by these results.  We've always trusted our friends to provide a tip for the latest trendy restaurant.  Now, we have millions of 'friends' all over the world who can provide us with insight into restaurants, hotels, airlines, taxis... everything.   Social media and specialist apps like Trip Advisor and Yelp make these reviews easily accessible.  And who doesn't look at the star ratings on Amazon or eBay to help with your decision process?  

The lesson for retailers and etailers is simple.  Earn great reviews, get those star ratings up and you will sell more.

Influenster women-use-reviews-shopping-infographic

LionTamer

Taming the Beast

February 15, 2017

Ecommerce has dramatically effected retailing forever and, in time, may overtake brick and mortar. It’s easy to imagine such a shift as ecommerce continues to grow at double-digits while traditional retailers do their best to hold on. Even categories not normally associated with etailing show promise. Carvana lets you buy a car online! They deliver on a flatbed, you test drive, you buy or return it for a different car. Mattresses can be bought online. Couches, refrigerators, frozen foods - you name it. Even groceries are moving toward ecommerce with 29% of U.K. grocery sales coming online!  In the U.S., online grocery sales is expected to exceed $18 Billion by 2020.

These behaviors have transformed the office category as well. Staples relies heavily on ecommerce with over 50% of its revenue coming online (source: emarketer). Amazon just reported 2016 revenues of $136 Billion, of which Amazon Business contributed heartily. As more B2B players market online, Amazon will continue to take share from etailers and retailers with its powerful brand presence, support, and pricing model. Like it or not, Amazon is a hungry lion that can eat at your margins, prices, and customers.  

But there are ways to tame the beast.


First

. Understand what Amazon does well and clearly define where and how it can help you. Same for the other etailers (Wayfair, Hayneedle, Staples, Tesco, John Lewis, etc.).  Many of our partners find value in Amazon’s fast-turn, free delivery capabilities. Others leverage its easy-to-use storefront option on the world’s best-known etailer. That said, Amazon is not a cure-all. Make sure you understand why you need Amazon -- and why you don’t.

Second

. Consider white-labeling products you feature on Amazon, and other ecommerce sites, with different pricing strategies. Amazon charges upward of 20%, which undermines the investment made in your brand. White-labeling allows you to leverage multiple etailers while maintaining strong branding and higher margins on your own site. Remember, Amazon is a price follower, not a leader. Margin erosion can be avoided with effective pricing strategies for each online reseller.

Third

. Social media can make all the difference. Depending on your brand and product line, platforms such as Pinterest, Facebook and Twitter are fantastic ways to extend online marketing efforts.  

Fourth

. Amazon is no longer the only mega-player. WalMart’s acquisition of Jet creates an interesting opportunity as it charges lighter fees (stronger margins for you) and does not require an annual fee (ala ‘Prime’) to get free two-day shipping. Plus, you can usually get same-day pick-up at your nearest WalMart.  FedEx is also taking on Amazon, recently announcing plans to warehouse and distribute online purchases for small to medium-sized manufacturers. More and more, strong alternatives to Amazon are appearing across the globe.

These are very disruptive times, exciting times. Those willing to take a smart, strategic, clear-eyed jump online will be rewarded. But jump in with an informed, committed strategy or risk getting eaten alive.

Cheryl-Whyers

Cheryl Whyers

SVP New Business Development

Tombow-CaseStudy-image

Tombow: Powerful social media strategy

Powerful social media strategy brings 10 x brand visibility.

Seeking to increase premium exposure, impressions, and sales, Tombow partnered with Highlands for marketing and promotions during Amazon.com’s Prime Day event. The power of social media in marketing brought higher-than-expected results. 

The Client

As an already-established industry leader in the office supplies and arts and crafts channel, Tombow offers the most innovative and finest adhesives, writing, crafting, and correction tape products on the market today. Bridging the gap between cutting-edge and affordability, Tombow maintains their status for unmatched quality and design.

The Challenge

Already well-established in the market, Tombow wanted a winning strategy for Amazon. com’s Prime Day promotion. With the limits Amazon.com places on product entries and parameters surrounding profit margins, competition is fierce during Prime Day. Only the best of the best are accepted for their Lightning Deals, which provides for a significant promotion for the Prime Day event.
With the opportunity to break more online sales records than Black Friday, Tombow sought the revenue-driving exposure of Prime Day to drive marketing and traffic conversions. Knowing the potential impact, Tombow asked Highlands to step in and leverage all available marketing strategies to make the event a success.

The Highlands Difference

Collaborating with the manufacturer’s sales and marketing teams, Highlands’ strategy included an aggressive promotion, specifically targeting a highly active social media campaign. Building awareness and creating anticipation was a key factor in the promotional planning, and a series of pre-launch buzz was a driving factor for the success.
Maximizing on that momentum, Highlands ramped up the promotion to draw attention during and after the Lightning Deal promotional period. Through targeting the right market and strategizing a hugely effective social media campaign, Highlands helped Tombow reach out and create continued awareness of the Prime Day and Lightning Deal discounts.

“The Tombow and Highlands teams came together to execute an amazing Prime Day event. Not only did we have a very successful Prime Day, we have also enjoyed sustained growth from those activities. I’m extremely proud of everyone’s efforts and collaboration to make our digital strategy such a successful one” Greg DiLaura, Director of Sales

The Results
As Highlands anticipated, leveraging social media proved a success. Tombow sold out of their Lightning Deals within three minutes. Though limited to 500 units by the rules and regulations of Amazon.com, the actual sales dollars did not reach staggering heights. However, the impressions and brand awareness of this event was priceless in driving the brand to the top of the market.
The expertise Highlands has in social media marketing and implementation is unmatched by any other sales and marketing agency. Since this powerful strategy was first implemented in early 2016, the Tombow brand has increased its brand visibility 10x over.