Change is in the air as Amazon and Whole Foods unite to position themselves as disruptors in the grocery space. Whole Foods grocers will likely act as local fulfillment centers for groceries ordered through both the Amazon website and through voice requests on the Amazon Echo. The model represents another innovative leap toward an AI-first world where intelligence is seeping into our most mundane daily activities, such as grocery shopping.
The digital transformation is hardly limited to food and consumer packaged goods (CPG). The entire retail industry is changing before our eyes as retailers scramble to keep up with evolving consumer behavior. The Amazon/Whole Foods merger raises many fascinating questions such as “what impact does this have on the future of retail?” and “how does Amazon fit into the larger world of advertising?” And for CPG retailers, “should I only advertise on Amazon?”
One answer remains clear. For today's retailers to unlock the full potential of Amazon and its innovative modeling, they should also continue to leverage the power of search to create holistic campaigns that touch and influence customers throughout the entire consumer decision journey.
Amazon + Search = The Ultimate Merger For Advertisers
Although Amazon is grabbing headlines with its bold and pricey merger, it's important to remember that Amazon still does not function as a replacement for search, or as the primary channel that consumers go to begin their product searches. Far from it. Based on the millions of users across our internal data and comScore’s panel, we have seen that more than 70% of retail searches still occur within the engines where consumers are beginning their journeys, researching products and comparison shopping.
Advertisements on early, broad category searches -- even when not clicked on -- function as billboards to spark brand awareness and keep retailers top of mind.
Think Omnichannel
The entire retail industry is transforming into an omnichannel experience that breaks down the walls between online activity and brick-and-mortar stores. eCommerce is no longer a separate channel that functions alongside brick-and-mortar operations. Rather, online and offline operations function as one within a new ecosystem of smart stores and always-on shopping across devices.
Amazon is an early adapter of this shift, creating a model that works between online orders and front-door delivery. Search is also a core driver of the omnichannel experience, enabling retailers to reach customers through a variety of modalities at the moments that matter most. Cortana, powered by Bing, is a personal digital assistant that can be accessed via text or voice over a variety of devices, including your desktop and phone. Consider the following cold medicine example:
When I felt a massive head cold coming on, I conducted a quick search for “cold symptoms” followed by “which non-drowsy cold medicine works best?” Vicks DayQuil immediately appeared with a branded ad, 5-star reviews and numerous purchase options. I decided to run to the corner pharmacy for a quick purchase. Not only did Vicks win a sale, but they kept a potential new customer away from their competitors.
When was the last time you asked Amazon for flu symptoms or information about a sore throat? All of this would have been missed if this CPG brand or retailer was only advertising on Amazon. The retail and CPG consumer decision journey is indirect in nature -- and Amazon is one of the channels consumers go to for purchases. It's important for brands to remember that shoppers depend on a variety of sources from search engines to retail sites during their shopping journey, especially the research and comparison phases.
A Post-Merger Future
All retailers, not just grocers, should be preparing for the post-merger landscape where intelligence will play an increasingly larger role across the industry. Advertisers should remain focused on both starting -- and ending -- their consumer decision journeys with innovative touchpoints for a holistic experience. There will be no shortage of opportunity as conversational commerce, connected technology and even mixed reality devices enter the scene. The focus should always remain on the customer -- and right now Amazon and search make a powerful combination for staying connected with the customers of tomorrow.