Imagine you walk into your local pharmacy to pick up your medication and you spot that phone charger you need for your car. Plus, a bag of Flamin’ Hot Cheetos sounds pretty good. Next thing you know, you’re paying for a basket full of small items when you just came in to grab some meds.
This is a huge driver for pharmacy stores like CVS, with retail sales making up around 30% of its business to the tune of $74B. Now, flip that formula on its head where you can shop for everything you want instantaneously…plus fill your prescriptions online. Welcome to Amazon Pharmacy – the next worldwide disruptor on Amazon’s roster.
Prescriptions on Prime
After buying PillPack in 2018 for $753MM, people were questioning what Amazon was going to do with a company that delivers monthly medications. Well, they just answered those questions with Amazon Pharmacy – an online platform to fill prescriptions and order medications.
Customers will be able to send their prescriptions directly to Amazon.com, which accepts most insurances, but also provides a discount to Prime members of up to 80% off generic and 40% off brand name medications when paying without insurance.
And yes, Primers will get that famous 2-day (maybe one-day?) shipping too.
PillPack gave Amazon license to operate a pharmacy in almost every state, which not only helps in America but also countries abroad like Germany that require a pharmacy license to even sell OTC drugs.
For brands like Sanofi, this could mean a huge opportunity has just presented itself where they can now finally sell products beyond their OTC lines.
Plus, Amazon has hired licensed members
to be available (delete) to answer questions 24/7, just like at your local pharmacy. But luckily, they won’t make you sit in a plastic chair playing with the blood pressure machine for 15 minutes.
This move has definitely had some ripple effects in the healthcare industry, too. Due to Amazon’s new ability to provide price matching on medication, GoodRx’s stock price dropped 22.5% the day of the announcement.
Convenience pharmacies like CVS and Walgreens also saw slight stock price dips as well. And we’ve even heard some new radio ads announcing steep discounts from CVS trying to bring in new customers.
But the same thing happened with the Whole Foods purchase back in 2017 – other brands smelled trouble and ramped up their efforts in response. Walmart added more grocery pickup stations, Costco launched its own same-day delivery, and Target bought delivery app Shipt.
This didn’t seem to completely upend the grocery industry. So, could Amazon really succeed in this new pharmacy space?
Amazon Has a Track Record of Winning (Almost) Anywhere
This is what Amazon does. They analyze verticals to see how they can beat the competition and then they jump right in.
We just haven’t seen them attack something this big since Amazon Web Services (AWS). And currently AWS holds a large majority of the top 100 sites’ cloud computing, so it looks like that was a solid move on their part.
Let’s go back to one aspect of Amazon Pharmacy’s offering: They allow competitive pricing for customers without insurance. And sometimes, the Prime price is the best price for prescription medications. Sound familiar?
Amazon does this with every industry, just look at AmazonBasics. And now they can even win adjacent customers as well as those looking for pharmaceuticals based on pricing and offerings.
This move could also help them win the 31% of customers aged 55+ shopping online more due to the pandemic, providing them a place to get their meds at competitive pricing that Medicaid can’t even compete with (or cover for that matter).
But winning the customer on pricing is just the first step. According to Sarah LaVallee, our VP of Client Success…
“This is just the gateway drug to the larger medical industry (pun obviously intended).”
So what is Amazon really up to?
What’s the Gameplan?
As with every other industry Amazon has invested in, just selling a few extra products here and there is not the end goal.
They bought Twitch to take over the gaming AND streaming markets. They bought Ring and Blink to become completely integrated into their customers homes. And now they can sell prescription medications online.
So here are a few of our predictions of what Amazon Pharmacy will lead to, rated from least to most bold:
(Least Bold) Amazon will deliver medications that require refrigeration on their trucks.
What if Amazon built up their delivery trucks to be able to transport medicines that require cold temperatures? They already refrigerate trucks enough to deliver AmazonFresh groceries, so it would just take a little more maintenance (and probably a lot of money, too).
(Bold-ish) Amazon will start opening pharmacies in brick-and-mortar stores.
Look out for pharmacies in Whole Foods and Amazon Fresh Stores pretty soon. They already have the locations, which would allow them to not only battle CVS and Walgreens online but also in the brick-and-mortar landscape.
(Getting Bolder) Amazon will deliver medications via drone.
UPS and CVS recently teamed up to deliver medications via drone in Florida. Automated delivery is a technology that Amazon has been developing since 2016, so if high-risk people don’t want to leave the house, Amazon can just deliver through the air. Plus, Alexa already reminds you when to take your meds, so why wouldn’t she automatically fly them to you too?
(Most Bold) Amazon is going to take over the healthcare industry.
Now that’s an end goal. Amazon has been setting up for something of this caliber for a while now. Last year, they created Haven along with Berkshire Hathaway and JP Morgan to provide affordable and efficient healthcare services to their own employees.
This year, they released the Halo band, which is wearable technology that can track your physical health, sleep, and even stress levels through your voice.
And now Amazon can fulfill prescriptions online (not to mention sell their own brand of OTC products called Amazon Basic Care). All of these services bundled together with every other aspect of Amazon’s product line will give them the perfect look into a customer’s health.
Creating Amazon Insurance would be the perfect end solution to drive to. Everything would be housed online, plus Amazon’s 24/7 service is leading the way for them to enable telemedicine.
Customers could even set up virtual meetups with an Amazon doctor, paid for by Amazon Insurance, who then writes a prescription that’s automatically sent to Amazon.com, fulfilled, and shipped the same day on a truck with a smile on it. Hell, why not just call it Smile Insurance?
Wrap It Up
To sum up, convenience pharmacies like CVS are going to have to rethink their whole strategy to retain customers and insurance companies might even have to wise up too. Amazon has the infrastructure, digital capacity, and backing to be able to take on whatever industry they want.
After all, healthcare is an $8T industry while retail is just a measly $2.4T. So buckle up because this is just the beginning.
Video Marketing can be extremely beneficial and lucrative for your business. Not only does it have higher rates of conversion, but it can positively impact the customer journey throughout their entire purchase cycle.
That’s why we suggest incorporating video into your full-funnel advertising strategy. But don’t just take our word for it. Here’s 20 reasons why video marketing should be on your radar and in your plans for 2021.
At first glance, you can usually tell if an Amazon product page is engaging or if it falls flat. And since A+ content (formerly Enhanced Brand Content) is a tried and true way to increase conversion on detail pages, it’s safe to say that shoppers can sniff out great products just by looking at the image gallery as well.
Of course there are a bunch of other things you can be doing to rank higher and sell more on Amazon, but if a single tool can have that large of an impact, why wouldn’t you utilize it?
The History of A+ pages also known as Enhanced Brand Content (EBC)
If there’s one thing we do know, it’s that Amazon will never get tired of coming up with acronyms. But don’t worry, we’re compiling a list of that Amazonian alphabet soup for you right now, so stay tuned.
However, the following acronym was pretty well known up until a couple of years ago: EBC, also known as Enhanced Brand Content. This “Brand Content” was simply better-than-average images and more engaging content below the fold.
Enhanced Brand Content was originally only available in Vendor Central. Smaller startup challenger brands who grew up on Seller Central usually didn’t have a relationship with Amazon (predating Amazon LaunchPad) and had no access to EBC or anything like it.
Like all startups, when there’s a roadblock, they’ll always find a workaround. That workaround paved the way for today’s best practices for all brands, whether they are based in Vendor Central or Seller Central. (We’ll dig deeper into that workaround in a minute!)
Flashback to 2017, Enhanced Brand Content became available for free to Seller Central-based brands (who were registered with Brand Registry), while brands in Vendor Central were still having to pay for the original version of A+ Basic – aka the next level above EBC.
In January 2018, Amazon made A+ Basic free for brands in Vendor Central. Just a few months prior to that, Amazon had launched A+ Premium, which was a more advanced version of A+ content that was optimized for mobile and Amazon’s mobile app.
Fast forward a couple of years and A+ Content has become the norm, allowing vendors and sellers alike to create awesome content from pre-determined modules on the platform.
According to Amazon, “Adding A+ to your product detail pages can result in higher conversion rates, increased traffic, and increased sales when used effectively.” So that begs the question…
Why Doesn’t Everyone Use It Then?
First of all, it takes time to build. That’s why it’s often best to employ an agency to devote the time, care, and attention needed to create it for you (*cough* Channel Bakers *cough*).
Now, it is possible to roll up your sleeves and get into the platform yourself for some good ‘ol fashioned content creation. Amazon does provide detailed descriptions on what each section requires, but that’s just the half of it.
When it comes to your product title, description, and bullet points, we highly suggest having a skilled Copywriter take care of this so that your Detailed Page Optimization (DPO) is clean and SEO-friendly, ranking your products higher in search.
And yes, you most likely have some beautiful images from a recent shoot, showcasing each angle of your product. While we definitely believe that’s great to have, we suggest using your image gallery for something that’s much, much more important: telling your brand’s story.
As you can guess, product shots alone don’t exactly tell a story. Sure, the customer gets to see every angle of the product, but it doesn’t give them any reasons to believe in the product.
Once upon a time the best practice was to leverage lifestyle images as the way to tell your product’s story, but that was literally decades ago (think back to the early dotcom boom).
Back then and even up until 2014, Amazon’s Vendor Central Retail Business Services (RBS) moderation team would reject any images that had content embedded in them. The data standards rule in Vendor Central was “85% product, 15% white background”.
And this is where the challenger startup brand workaround comes into play. (Told ya we’d get there!)
Challenger brands that began their Amazon selling journey started on Seller Central. Well…Seller Central didn’t (and still doesn’t) have a data standards moderation team that rejects images that brands submit through the Seller Central console.
Boom! Seller-based challenge startup brands began injecting their A+ content into their images in the image gallery carousel, which was scrappy, way ahead of their time, and super-effective.
Here’s a few examples of awesome Seller Central based challenger brands (*cough* Channel Bakers clients *cough*).
You might be saying, “Ah yes Josh, but I’m a larger, non-startup brand that lives in Vendor Central and we’re not allowed to upload images with A+ content embedded.” As of 2013, I would have agreed wholeheartedly with you…but what if I told you that was not the case for your ASINs today?
You see, Samsung gets it…(*cough* also a Channel Bakers client *cough*).
Compare Samsung Galaxy Buds to the most popular product on Prime Day 2020, according to Amazon search terms data.
Apple doesn’t get it…
Looking at this image gallery we’re seeing a handful of pictures that give us absolutely no context as to why we’re looking at them, let alone why they selected these images.
According to Euclid Analytics, 51% of U.S. households use the Amazon Mobile App. With a recent update to this app, the image gallery now overtakes the entire screen when you click to zoom in on the images inside the carousel.
These Amazon Mobile App optimized images are something we call an “Enhanced Image Gallery” (and no, we are not calling it the EIG).
Brad Malm, our Creative Director at Channel Bakers, calls the Enhanced Image Galleries…
a beautiful combination of art and science that use your brand’s guidelines and messaging to educate your consumers with easily digestible information. It looks great, but it also gives a quick snapshot into how this product can make your life easier.”
Plus, this kind of information does a great job of informing potential customers of your product’s features, leading to less returns and negative reviews.
It’s All About the Execution
The ultimate goal is to have a unique mix of engaging content and informative, stylized imagery. The entire image gallery should take the customer on a journey, answering their questions along the way.
Key points like verified 5-star reviews, industry awards, and sizzle videos are great ways to legitimize your product in the image gallery. Also, including a 360° spin image has been proven to add a 6-8% increase in conversion.
But the best way to make your Enhanced Image Gallery shine? User experience.
With 151M monthly users on the Amazon Mobile App, the best thing you can do is optimize your images so that they’re mobile-friendly.
This means adding in portrait images to take over more of the screen while they scroll. For instance, you can fit quite a lot of information into one of these images while still providing some product imagery to tie it all together.
And according to a survey we ran on Suzy.com, 61% of users prefer to swipe left and right on an image gallery while mobile shopping (thank you, Tinder).
Also, consider that a desktop allows for 9 images (or 7 if you add a video), which is a great amount of shots for people to peruse through. However, mobile only shows the first 5 to 7 depending on the category. So, we typically frontload the first 5-6 images with the strongest storytelling pieces possible to grab the user’s attention.
But that trend is changing every year. The worst thing you can do is let someone else register your product’s ASIN on Amazon before you do.
If a third party (3P) seller gets into the Brand Registry before you list it, they have complete control over the product’s description, bullets, and worst of all, the image gallery. Unfortunately, if they beat you to the punch then Amazon doesn’t have much power to kick their images out for yours.
This is where 3P sellers can really be detrimental to your brand’s story, so get in first and get in fast.
But that’s just the tip of the iceberg. We’ve got a bunch of other secret sauce that we’d love to implement to build your following and educate your customers on just how fantastic your brand is.
Reach out to firstname.lastname@example.org to see how we can optimize your Enhanced Brand Images today.
Going into 2020, Amazon was already primed to have a record setting year with a projected revenue of $350B, up 50% from 2019…and then the pandemic struck. After the initial toilet paper rush into brick and mortar stores, people started switching to online shopping.
The pandemic brought 145MM new online shoppers (you know…the folks who are still afraid to use their credit card on the interwebs), which resulted in plenty of success for Amazon, especially during their recent, record-setting Prime Day.
But that doesn’t mean Amazon is capitalizing on this pandemic. On the contrary, they’ve been extending a helping hand by emphasizing essentials like hand sanitizer (pun intended).
Looking Out for the Little Guys
Small and medium-sized businesses (SMBs) have been hit the hardest by the economic shutdown of 2020. With over 100,000 SMBs shutting their doors for good, Amazon brought it upon themselves to lend a helping hand.
So they set forth a corporate social responsibility (CSR) initiative, aiming to invest $18B in SMBs to get them back on their feet. And if there’s one thing we can expect from entrepreneurs, it’s that they know how to pivot when faced with adversity. In fact, for many of them, when the doors closed, the laptops opened.
As for shoppers, Amazon made it a point to keep production running, but only for essential items so that consumers could get all the face masks, hand sanitizer, and diapers they needed. This ethical move was coupled with a price cap on many essential items to make sure shoppers weren’t getting gouged in a time where unemployment was teetering on 20%.
Society’s shift to online shopping has brought a significant change in the way we view the holiday season as well. According to Radial, 60% of consumers plan to shop less in-store this season due to fear of COVID-19 exposure. But it also follows a trend that’s been popping up every year around Black Friday…
Does this mean Black Friday’s in the Dark?
According to the CDC, shopping at crowded stores around Thanksgiving is a high-risk activity that should be avoided. Over the past couple of years, society has been pushing for a new way to get their holiday shopping done. From REI’s Opt Outside campaign to worldwide protests against consumerism, there has been an “anti-Black Friday” perspective emerging.
So what does this mean for Black Friday and brick and mortar retailers?
One thing that we can glean from this pandemic is that brick and mortar stores have had to re-invent their in-store experience.
Both Walmart and Target have put a huge emphasis on click and collect over the past few years, which has contributed to their omni-channel success this year – Walmart.com with 65.4% YoY growth and Target with 103.5% growth.
Walmart also recently announced that they’ll be revamping their Black Friday sales structure. Rather than having crowds of bargain hunters in-store, they’ll be limiting the amount of shoppers allowed inside while spreading the savings “throughout the season”. They’ll also be implementing shorter store hours and keeping up with all coronavirus prevention guidelines.
So, Who Won Prime Day Then?
According to NBC, Apple Airpods Pro were the top selling item during Prime Day, but in second place? Safe+Mate face masks! Next came Samsung’s 65” QLED Smart TV followed by the Yosuda Stationary Bike. This trend of purchasing health and wellness items mirrors what has been consistent throughout this entire year of quarantine.
Amazon also put out a press release stating that marketplace sellers were the winners this year with 60% growth to reach more than $3.5B. And with 2.3MM SMBs making up Amazon’s online marketplace and Prime Day sales skyrocketing to over 260 million items, that’s a solid win for sellers everywhere.
At Channel Bakers, we’re keeping our finger on the pulse and watching this data closely. Where others may see barriers, we try to help our clients find a strategic advantage.
Sarah Lavallee, our VP of Client Success at Channel Bakers, said, “The brands that “win Prime Day” are those that use it strategically as a springboard to make Black Friday/Cyber Monday even more successful. It is rare to have three major high-traffic events in Q4 during a time where we’ve seen a significant shift in consumer purchasing behavior. Brands that don’t leverage this to their advantage are missing a once in a lifetime opportunity.”
Let’s switch gears back to brick and mortar.
Near the end of every year, brick and mortar stores go through a re-evaluation “reset” to see what products have been moving and what has gone stale on their shelves. Unfortunately, the pandemic has had massive consequences on brands like JC Penney, Pier 1, and Neiman Marcus.
Other brands took advantage of Prime Day’s online traffic surge. For instance, Target hosted their “Deal Days” during the Prime Day event and saw more than double the sales compared to last year. Best Buy brought back their own “Black Friday” deals at the same time and it was reported that 51% of the top 100 online retailers had sales on Tuesday too. This led to Amazon realizing a 1.5% drop of total share of commerce.
It’s safe to say, when it comes to a sound retail strategy, sometimes the best advice is to meet the customer where they are. It doesn’t hurt to have a kickass product and a hot deal too.