I have been researching what obstacles brands face when trying to succeed online and in-store through my contacts on LinkedIn. It has been very enlightening and has confirmed some of what I already suspected and opened my eyes to other barriers. Most of the conversations started out with my contact saying either, “how long do you have to talk” or “you sure have opened a can of worms”. Others were able to pinpoint exactly what was in their way. This blog outlines the most prevalent obstacles that were mentioned.
Obstacle 1: Amazon
According to BloomReach’s 2016 survey research, 55 percent of product searches in the US begin on Amazon.com and 28 percent start on search engines like Google, so Amazon can’t be ignored. Below are a few items my contacts cited regarding Amazon and why it can be an obstacle for them to succeed online:
- Setting margins too low
- Selling knock-0ffs of their products
- Amazon’s private label products compete with theirs
- Amazon owns the customer data
- Reviews can’t be trusted
For some of the marketers I spoke with, Amazon was their only online store besides their own website so it was important for them to succeed.
Obstacle 2: Homogenization
This homogenization is happening online as well as in-store. It is hard for any brand to stand apart from the competition. The product listing pages and product detail pages look the same from one online store to the next. Some websites use thumbnails in order for the viewer to see other views of the product and in some cases, there are videos. The fashion sector has done a great job of providing customers with different views and sizing options but when looking at a consumer technology product webpage, it is a long scrolling page of specifications. Brands can be compared, but there is no compelling why-to-buy for most products.
In-store, unless you are a store within a store, all products are displayed in the same way with a fact tag and pricing. The product brand only stands out if merchandising space in-store has been purchased. A large retailer, such as Best Buy, provides a template for signage for each brand that allows for very little, if any, differentiation. Product packaging is the only way for a CPG or consumer technology product to stand apart from their competitor.
Obstacle 3: Cost
Purchasing an endcap or paying for a branded area within a store is very costly. The costs can be controlled by limiting the amount of time the display stays in a store, if the bells and whistles are kept to a minimum and if it doesn’t need constant upkeep. If a brand can afford the space, it has great ROI but this leaves smaller brands unable to compete.
There are many digital methods to drive traffic to your brand on a dealer’s website or your own e-commerce website, and the prices vary. Native online advertising on a reputable publishers website can be really expensive. Here is a statistic from The Daily Egg: “When we included all publishers with a Domain Authority (DA) over 80, the average cost of launching a native advertising campaign was $35,482.50*.”
A brand can look at all of the ways to promote their brand and work within a budget but they can always be outspent. A brand needs to look at all the options: pay per click, social media, blogs, banner ads and come up with their own strategy based on how their customer shops.
Obstacle 4: Man-Hours
When promoting a brand at brick-and-mortar, designing a display takes time. Time is money so this obstacle is connected with the above barrier. Once space is secured, it needs to be designed, approved, fabricated and installed. Anything can happen along this journey and I can honestly say I have worked on displays for months before I saw the final product in-store. Once the display is in-store, it may need to be updated and repaired.
For brands that rely on selling items on Amazon, managing your online presence is a full-time job. If you are trying to build an online advertising strategy, this very time-consuming. There is lots of testing, waiting for results, tweaking the strategy and fine-tuning the strategy along the way as technology changes.