42% More Brands Are Selling on Amazon Now Than Before COVID-19, According to Feedvisor Brand Survey
Feedvisor, the AI-powered optimization and intelligence platform for brands and large sellers on Amazon, announced the results of its third annual brand survey, which analyzed over 1,000 U.S. brands and their unique relationships with Amazon and e-marketplaces. The 2021 report, “Brands, Amazon, and the Rise of E-Marketplaces,” documents brands’ advertising and media strategies, plans for expansion, the pandemic’s impact on their businesses, as well as specific areas of challenges and opportunities.
- Brands see the imperative for an Amazon strategy: Now more than ever, brands recognize Amazon’s central role in their overall e-commerce strategy. Over three-quarters (78%) are currently selling on the platform, up from 55% last year.
- COVID-19 has accelerated adoption of Amazon Advertising: 41% of brands said Amazon Advertising was among the new strategies they had deployed during the pandemic. Currently, 88% of brands use Amazon’s advertising platform, up 21% from last year.
- Amazon has emerged as a full-funnel advertising solution: 26% more brands are leveraging Amazon DSP compared with last year, indicating brands’ growing awareness of the platform’s critical role in upper- and lower-funnel campaigns to reach shoppers on and off Amazon. Additionally, brands are increasing their investment in Amazon Advertising; 59% spend over $60,000 monthly compared with 38% who did so last year.
- Half of brands see at least a 7x return on Amazon Advertising: Brands’ increased investment in Amazon Advertising is backed by the considerable returns it provides. Over half (51%) of brands experience a return of 7x or more, while 39% of brands see between a 4x–6x return.
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“The growth of e-commerce during COVID-19 has substantially benefited e-marketplaces, especially Amazon,” said Dani Nadel, president and COO, Feedvisor. “The sentiments outlined in this report make it clear that brands can no longer afford to ignore Amazon’s significance, nor can they rely solely on their owned channels for the reach needed in today’s e-commerce landscape. As Amazon continues to pave the way for stronger customer-brand relationships and overall brand growth — driven by digital media offerings, enhanced advertising and content features, and reporting capabilities — we can expect to see more brands increase their investments as they see greater, tangible value from the platform.”
While Amazon continues to permeate brands’ strategies and grow in significance, other e-marketplaces are entering the mix. In the report, brands both on and off Amazon share similar sentiments around the challenges of operating on the platform, including increased competition and the inability to control the customer experience.
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As such, over half (57%) of brands on Amazon leverage additional e-marketplaces aside from Amazon to build brand awareness, up from 50% last year, followed by driving sales (52%) and product liquidation (43%). As brands invest in diversification across e-commerce and advertising tactics, survey insights include:
- Channel diversity is key for brand preservation: Nearly three-quarters (71%) of brands are currently advertising on Walmart, with 48% spending at least $60,000 monthly. In addition, 87% of brands plan to increase their ad spend on Walmart in 2021, with 68% planning to increase their spend by up to 50%.
- E-marketplaces are the future of e-commerce: 53% of brands believe e-marketplaces are their greatest source of opportunity in 2021, up from 43% last year.
- Google Shopping and Kroger are top considerations for expansion: Emerging marketplaces such as Google, Target, Instacart, and Kroger are earning a growing share of brands’ e-commerce presence; 27% of brands said they would consider expanding to Google Shopping and 21% said they would consider expanding to Kroger.
“In a complex, dynamic marketplace ecosystem, it is essential for brands to leverage deep marketplace expertise and sophisticated technology to help them drive sales and traffic to their product listings, provide personalized and engaging shopper experiences, and optimize their ad campaigns to reach the right audiences,” said Victor Rosenman, founder and CEO, Feedvisor. “The brands that embrace the digital revolution of retail, invest in data and technology solutions, and optimize their presence on Amazon and e-marketplaces will be well-positioned for long-term growth in the inevitable new normal.”
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