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Maneuvering Amazon as a new brand in the marketplace

Jun 3, 2022

If you type in “skincare” in the Amazon search bar, more than 30,000 results populate. After experiencing success as a Korean “K-beauty” skincare brand in Asia, Donginbi wanted to expand into the U.S. market. Donginbi wanted a relationship with a marketing company that had both a direct connection with Amazon as well as an understanding of Asian culture, said Hyoyeong Jeon, global director at Donginbi.

Donginbi connected with Oceanwing, a subsidiary of Anker, a consumer electronics brand and the largest seller on Amazon.com Inc.

“As a Chinese company, Oceanwing shares Asian culture with us. They can understand our products properly and, at the same time, demonstrate expertise in the U.S. market,” Jeon said in a written statement to Digital Commerce 360.

Donginbi_Kim

Hyoyeong Jeon, global director, Donginbi

Donginbi launched its Amazon store in September 2020. During Amazon Prime Days in June 2021, Donginbi reached Top 50 bestseller status with its “Essential Set” skincare kit — not easy to do, Jeon said.

Selling to U.S. customers required a regional advertising plan, Jeon said. Oceanwing conducted market research for Donginbi.

“Oceanwing did comprehensive research on our target [American] audience so that we could have a better understanding of them,” Jeon said. “This is vital for the success of cross-border commerce.”

Social media strategy for Prime Day

So how does a brand stand out among thousands of other skincare sellers on Amazon before Prime Day? Preparation in stages over a two-week period, according to Donginbi. Oceanwing advised Donginbi to break up its advertising campaign into a warm-up period, promotional period, and an after Prime Day outreach effort.

The warmup included a $1 purchase campaign where customers could try samples of Donginbi’s products for $1 each. This offer was promoted on Donginbi’s Instagram account.

“In less than two hours, we sold out of all our samples and the engagement rate increased 56.9% on Amazon,” Jeon said.

This was no simple feat, Jeon said.

“It’s very challenging for cross-border brands to run successful social media campaigns in the U.S.,” he said. “As a Korean brand, we needed to understand U.S. customers’ needs and adapt to their culture.”

Using different social channels at different times during the sales stages was unfamiliar to Donginbi, Jeon said.

“This is a new concept to us,” Jeon said.

Since working with Oceanwing, Jeon said Facebook ads have proven helpful in converting target audiences to Amazon beyond Prime Day. Oceanwing also advised Donginbi to focus on Instagram and YouTube rather than TikTok. Through influencer marketing, a loyalty club and other campaigns, Donginbi has amassed more than 50,000 followers on Instagram and thousands of views of influencer product reviews on YouTube.

“Instagram plays an important role in our overall ecommerce strategy and converts great sales,” Jeon said, without revealing by how much.

Oceanwing also targeted subscribe-and-save users on Amazon as another way to build customer loyalty on the platform. Donginbi had about 1,800 followers on Amazon in April 2022. Oceanwing worked with Donginbi to establish daily collaborations with influencers to focus on Prime Day, Cyber 5 (the five-day holiday shopping period including the weekend of Thanksgiving, Black Friday and Cyber Monday), a discount campaign, and a new product launch. During those periods, Donginbi spent about 60% of its ad budget on YouTube influencers.

Jeon said research showed YouTube had a longer retention rate compared to Instagram. YouTube videos of influencers rating the products range from about 10 to 15 minutes each. Conversion rates were better from YouTube ads compared with Instagram. Jeon did not disclose by how much but noted that successful campaigns with influencers resulted in 20% of sales during each campaign.

In Asia, by comparison, Donginbi appealed to customers by collaborating with Korean television series and dramas. Chinese customers responded to live streaming events. Donginbi worked with the top-ranking streaming influencer Jiaqi Li, known as the “Lipstick King” last year. He sold a record $1.9 billion in goods during a 12-hour live streaming marathon. Jeon believes live streaming will grow in popularity in the U.S.

“The U.S. is catching up with this [live streaming] trend as more and more young people use TikTok,” Jeon said.

Reliable forecasting

In 10 years, Anker was able to build a multi-billion-dollar brand using Amazon’s platform to grow the business, eventually venturing into other business channels, including its marketing subsidiary, Oceanwing. Oceanwing is growing, according to Steven Fish, head of growth. Oceanwing has expanded its services to include creative, distributor and marketing services, which include public relations, influencers and deal sites.

“The next step is to help as many sellers on Amazon as we can to reach their full potential,” Fish says.

Part of that strategy includes bringing Fish on board in 2022. Fish has two decades in direct-to-consumer strategy. He has experience launching brands on Amazon, such as consumer electronics DTC headphones brand Beats by Dre. Fish has also worked with large retailers like Clorox and worked on the distribution side of retail.

Steven Fish Oceanwing

Steven Fish, Oceanwing

Oceanwing helps brands with supply chain and logistics management by using artificial intelligence technology to forecast sales inventory — technology buoyed by its parent company, Fish says. Once a seller is brought on, Oceanwing signs a non-disclosure agreement and pulls real-time information from Amazon’s application programming interface (API), Fish says.

“We formulate a strategy based on that information and it typically works really well,” he says.

“We’re able to provide reliable forecasting and accurately predict and navigate challenges down to the last mile,” he says. “Both big and small brands run into logistics issues they don’t know how to handle. They know we’re anchored by an $8 billion parent company and can use that network.”

Paid media and organic campaigns are often inefficient, Fish says. Oceanwing offers its sellers Amazon DSP, a demand-side platform, which allows sellers to programmatically buy ads to reach new and existing customers on and off Amazon.

“Sellers spend a lot of money, and they don’t really get a return on investment or return on advertising spend,” Fish says.

Fish says Oceanwing has its own proprietary information it has developed, as well as access to tools that other advertising agencies use.

“We aggregate tools from several different modules,” he says. “Some are our own proprietary AI software. We’re able to get some really deep insights into every facet of a seller’s business. In my 20 years working at agencies, I’ve never had the kind of insight Oceanwing provides customers.”

“For the most part, Anker has grown in Amazon,” Fish says. “That unique relationship with Anker gives us insight and that power to use the same playbook in strategy to grow another brand’s business.”

While Oceanwing declined to name what brands have signed on recently with the company, Fish says several brands owned by large conglomerates are now working with Oceanwing for Amazon account management focused on strategic execution for Prime Day in July 2022 and Q4 2022. One brand is a top 10 leader in the food and beverage space, and another in the sustainable drinkware category, he says.

Amazon keywords make all the difference

Keywords are a big part of strategy when selling on Amazon. Fish says there is a strategy to getting the most value per click.

“Typically, what brands do — which I believe is not the correct course of action — is to bid on low converting, high cost per click keywords,” he says.

In the beauty category, for example, the cost can be as much as $4 per click, “which is very expensive,” Fish says. “Bidding on words like ‘beauty’ or ‘mascara’ can be very costly and they don’t get a nice return. So we look for high-converting, below-cost phrases. Instead of ‘skincare,’ use ‘skincare for a face that’s dry.’”

Other details that might seem obvious, “don’t use a blurry, low-resolution product image or poorly written product descriptions,” Fish says.

“Brands won’t have infographics or other images that call out certain features of the product,” he says. “Or they don’t have a sponsor or brand videos on file. Amazon requires some kind of video and some brands don’t realize this.”

And if a seller doesn’t pay attention to the details, they’ll suffer for it. “I think in 2022, the quality of sellers — particularly in retail — is improving. Because they realize if they have subpar listings, people will write negative reviews and it will hurt their business.”

Fish says conversational shopping, using social media, will continue to appeal to shoppers, as is the case with Donginbi. The ability to message sellers on Amazon is also beneficial, he says.

The cost varies depending on the customer, Fish says. While not disclosing what Oceanwing’s rates are, he noted that “if there is going to be a 200-person team involved, the cost might be higher than another client,” he says.

Amazon Prime Day 2022 Plan B strategy

Amazon Prime Day 2022 is in July and Oceanwing has some last-minute pointers for retailers looking to win more customers and generate recurring revenue year-round.

“Before Prime Day, always have a plan B,” says Joe Wu, general manager of Oceanwing. “Since there’s a risk of Amazon revoking your deal approval, you must have a plan B for your Prime Day campaign.”

On Prime Day, “traffic is huge,” Wu says. “Your brand page can get far more customers on Prime Day than any other time of the year.” It is essential for brands to make any updates or optimize the page to ensure it appeals to customers, he says.

During Prime Day, Wu advises brands to monitor competitors’ activities. “Prime Day is a good opportunity to learn something new from your competitors, and you can still adjust your strategy at the same time,” he says.

Before Prime Day, it’s unlikely a seller will have much information on a competitor’s discount plans.

“But keep tracking your competitors’ performance when the war starts,” Wu says. “If you find some are offering significant discounts on certain products that lead to excellent sales performance, you can still adjust your strategy.”

That goes for out-of-stock notices. “Congratulations, that means you can spend less budget to reach your sales goal,” Wu says.

Wu advises brands to monitor all sales indicators and listings early in the morning on Prime Day.

“You can quickly put out any potential fires if something unusual happens,” Wu says. “Simultaneously, run some tests to optimize your sales performance.”

Potential fires include when something sells out immediately. One example of a plan B is to prepare extra inventory besides Fulfilled by Amazon (FBA) items. Oceanwing works with its clients to prepare Fulfilled by Merchant (FBM) items. This is particularly helpful since Amazon has recently increased its FBA limitations to all categories, according to Oceanwing, making it difficult to make changes. Oceanwing cites its full-cycle supply chain and logistics services as tools to help clients establish a reliable FBM plan B.

During Prime Day 2020, Oceanwing ran a split test for a client to compare two different discounts. Oceanwing set the higher-performing discount across the client’s offerings for the remainder of the day. As a result, the client was able to meet its sales target.

Once Prime Day is over, the opportunity is still there, Wu says.

“Run an after-Prime-Day campaign,” he says. “The traffic to Amazon and other discount sites is typically very high for the entire Prime Day week. With an after-Prime-Day campaign, you can take advantage of that and win more customers for your brand.”

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