Shopper Marketing - January 2018 - 15

TRENDS 2018 15

JANUARY 2018 SHOPPER MARKETING

They win, you lose

Can Walmart and Target
successfully compete with
Amazon over the long haul?

Ideally, brands and retailers
work for a win-win relationship.
In your experience working
with Amazon, is it:

YES

68.2%

NO

INSTITUTE ANALYSIS:
Along with this
question, we asked
respondents to
explain their answers.
Among those who
answered "no,"
here's a sampling of
comments:

As the numbers
indicate - 68.2%
answered "yes" - the
future is still bright
for Walmart and
Target, according to
many. Here are just a
few of the comments
in support of Walmart
and Target:

31.8%

" Amazon is king."

INSTITUTE ANALYSIS:
With the open-ended
"please explain"
request for this
question, we were
trying to get a deeper
understanding of
brands' relationships
with Amazon. And
like the numbers
indicate, the tone
of the explanations
varied greatly. Here's
a sampling:

" I'm thinking Amazon is
going to own everything at
some point."
" Amazon is at the cutting edge in every industry, and Target
and Walmart will fall behind because these companies are
not risk takers."
" Walmart and Target have a lot of baggage that will prevent
them from large success. They will play in the game, but
Amazon will dominate."
" Amazon is just item and price with no inspiration. There
is still no substitute for a 30-minute trip to the store to get
exactly what you want - across all categories."

36.1%
25%

They win,
you win

" Amazon is constantly
evolving. They test, learn,
then adapt. CPG companies
need to think the same way."

38.9%
Pretty much like working

with any retailer
" Just started working with Amazon,
however they don't seem very collaborative."
" Amazon will not share back any of their data."
" Seems they still require a significant investment to play."

" Amazon's cost-to-serve model is higher than other pure-play
and omnichannel retailers."
" I think in some cases we both win, but in a lot of cases they
are the only one winning due to their relationship with thirdparty sellers."
" If you can get to a strategic relationship, they can be much
more willing for a win-win like all other retailers."

" As we near the tipping point for online grocery (pickup and
delivery), Walmart is poised to win big due to infrastructure, technology, and first mover advantage (pickup)."

" Amazon has provided us with options to reach shoppers we
were not effectively interacting with before and we are satisfied with margins at this time."

" Going to Target is an experience. It can be therapeutic to
many. A lot of people love shopping online, which both
Walmart and Target cater to, but being in-store is a different occasion and a tradition for many. People also need
items last-minute, which online can't always compete
with."

" They are a giant and making decisions solely based on their
machine intelligence, which works but will be tested over time."
" They are rigid, but once you fit into their model, you can both
win."

" They both have the scale and are demonstrating a willingness to make incremental investments."

" They are tough to work with."
" They are willing to work with us and never required ransom
money to do business with us, like some brick-and-mortar
retailers attempted (and failed)."

" They can compete if they execute their digital strategies
properly. Having a storefront in addition to a strong online
retailer element can be a major advantage."

" They can shut you down whenever they please and have
computer glitches all the time."

" They have the experience, resources and ability to impact
the consumer in-store."

" They know their power. The economics of the deal with them
only enforce that."

" They have their loyal customers and stand for something in
the minds of consumers. If they can still stay loyal to their
personas and link on- and off-line, they can be successful."

" They win, you win, as long as you are willing to play by their
rules."

More than a few
respondents were
bullish on Walmart,
while not so much
on Target. Here
are some of their
thoughts:

" Maybe Walmart, however they have a huge reputation gap to
overcome. Target doesn't have the spending power - period."

And, as this
respondent indicates,
things are still to be
determined:

"The race will be won by how quickly Walmart and/or Target can satisfy the online experience vs. Amazon satisfying
the in-store experience."

" Walmart can due to its size and ability to purchase capabilities. Target has no strategy (long term) at this time."

To us, this seems like
some logical advice:

" You have to know how to work with Amazon to make it
win-win. If you use typical brand/retailer tools and capabilities, you will lose."

" Walmart has a shot. It feels like Target is falling behind quickly."
" Walmart, absolutely. They have the capital to invest in this
space. Target is to be determined, but it isn't looking good."

Amazon offers a plethora of advertising opportunities.
Which ones have proven most effective?
E-commerce ads (add to list,
add to cart, subscribe & save,
coupons, customer reviews)

If you sell through Amazon.com,
are you using first- and/or
third-party selling?

Campaign landing pages/brand
showcases

3rd only

24.1%

Standard ads (desktop/mobile
web display ads, mobile app
banner ads, video ads)

7.4%

19%

Device-specific ads
(Fire TV, Kindle, etc.)

45.7%
NOTE: After conducting our survey,
1st only
we realized that understanding exactly
what first- and third-party selling is can
be difficult - at least for those without
deep knowledge of Amazon. Here's our
understanding: First-party selling means
selling your inventory wholesale to Amazon,
which then acts as a retailer and sells it to
consumers. A third-party Amazon relationship
means you are the retailer and you are selling your
product directly to consumers on the Amazon marketplace. To add to the confusion, some third-party sellers use
Fulfillment by Amazon, which is kind of an in-between.

45.6%

29.6%

Both

7.6%

Non-standard media

3.8%

Other

17.3%
We don't
sell there

10.1%

We're not advertising
on Amazon

38%
0

10

20

NOTE: The "Other" responses indicated that paid search
via Amazon Marketing Services is extremely effective.

30

40

50


http://www.Amazon.com http://www.Amazon.com

Table of Contents for the Digital Edition of Shopper Marketing - January 2018

Contents
Shopper Marketing - January 2018 - 1
Shopper Marketing - January 2018 - 2
Shopper Marketing - January 2018 - Contents
Shopper Marketing - January 2018 - 4
Shopper Marketing - January 2018 - 5
Shopper Marketing - January 2018 - 6
Shopper Marketing - January 2018 - 7
Shopper Marketing - January 2018 - 8
Shopper Marketing - January 2018 - 9
Shopper Marketing - January 2018 - 10
Shopper Marketing - January 2018 - 11
Shopper Marketing - January 2018 - 12
Shopper Marketing - January 2018 - 13
Shopper Marketing - January 2018 - 14
Shopper Marketing - January 2018 - 15
Shopper Marketing - January 2018 - 16
Shopper Marketing - January 2018 - 17
Shopper Marketing - January 2018 - 18
Shopper Marketing - January 2018 - 19
Shopper Marketing - January 2018 - 20
Shopper Marketing - January 2018 - 21
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Shopper Marketing - January 2018 - 23
Shopper Marketing - January 2018 - 24
Shopper Marketing - January 2018 - 25
Shopper Marketing - January 2018 - 26
Shopper Marketing - January 2018 - 27
Shopper Marketing - January 2018 - 28
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Shopper Marketing - January 2018 - 30
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