“The vast majority of purchases – 55% — are digitally influenced, meaning either people are buying them online or they are influenced by patterns of what they see online in ratings and reviews,” John Denny, VP of eCommerce & digital marketing at the investment Cavu Ventures, told FoodNavigator-USA at the Digital Food & Beverage conference in Austin, Texas.
He explained that most consumers are more likely to trust other consumers about the quality of a product or their experience, and as such they not only read the reviews, but they also ask each other questions online before buying a product.
“You have an amazing effect,” and the best way to harness that potential is by having products on Amazon, which is “the number one product search engine,” he explained.
He added that many “insurgent brands” understand this and are placing their products on Amazon to ensure that when consumers look for it – or a similar product – they can find it and learn more. Larger established companies, however, are struggling to grasp this trend, he added.
‘An advertising machine’
On top of this, Denny says, Amazon is an advertising machine that can help boost sales across channels – something CPG brands need to remember when measuring their return on investment.
“Amazon knows … what my wife is buying, what my kids re buying, what my neighbors are buying. They know pretty much what you are going to buy before you do,” and as such can target ads for products to meet that demand, Denny said.
Again, he noted, many new companies are taking advantage of this but larger companies are not because they don’t fully understand that an investment in Amazon advertising is an investment in cross-channel marketing.