Amazon is preparing to expand its presence in the Swiss market. Jean-Gabriel Meylan, head of Swiss Post’s parcel distribution centre, recently confirmed in a TV report that logistics tests with the mail-order giant are under way. Swiss Post will also handle customs clearance for Amazon in future. Customers will then benefit from simpler payment, lower fees and a far wider choice of products than before. This is expected to happen from summer 2018.
What does Amazon’s arrival mean for online retail in Switzerland?
A few figures show just how well Amazon knows how to dominate. Amazon’s market value is higher than that of all major US retailers combined. More than 300 million active user accounts and over 65 million members of its Amazon Prime subscription programme give it a very solid customer base. According to market research firm Millward Brown, Amazon ranks fourth among the world’s most valuable brands. In a survey by Raymond James, 52% of respondents said they start their product searches on Amazon, not on Google.
Impressive as these figures are, they need to be put into perspective for the Swiss market. Swiss consumers have always had a special bond with domestic companies. That is why there is not only eBay but also Ricardo, not only Amazon but also Microspot (formerly Siroop), Galaxus and others. One reason is that the comparatively small Swiss market is often not a priority in the expansion strategies of the big players. Resourceful Swiss entrepreneurs have always used this oversight to develop and establish a “Swiss” solution. Another reason is that many Swiss people make a point of supporting their own companies.
It is also worth remembering that Amazon already serves the Swiss market. So this is not a new market entry. That, too, is likely to soften the impact on Swiss online retail.
A brief interim conclusion: Amazon’s stronger commitment to Switzerland is an important issue. The big Swiss retailers need to keep a close eye on this powerful competitor. Small and medium-sized mail-order retailers, and manufacturers that rely on retailers as partners, should above all see Amazon as an opportunity: a huge potential market.
E-commerce marketing with Amazon
How can retailers and manufacturers use Amazon for themselves? Amazon offers two platforms for marketing your own products: “Amazon Seller Central” for “sellers” and “Amazon Marketing Services” for “vendors”. The two platforms work in much the same way, except when it comes to marketing. Vendors can advertise their products more extensively than sellers can on “Amazon Seller Central”.
Here are the advantages of the two platforms at a glance:
Amazon Seller Central
- Lower commission to Amazon
- Your own pricing
- Direct feedback from customer contact
- No negotiation with Amazon required
Amazon Marketing Services
- Extensive advertising options
- No warehouse required
- Prime as a selling point (FBA fulfilment is possible for sellers, but involves more work)
- Returns handled by Amazon
- No staff needed for customer support
- Planning accuracy
Amazon ads
Sponsored Products: Sellers can promote individual products at SKU level by bidding against competitors for a prominent placement on the first page of search results.
Headline Search Ads: These ads let sellers raise awareness of a particular product group.
Product Display Ads: These ads increase product visibility through placements on other sellers’ product detail pages. They can be used, for example, to sell products that are often bought together with other products.
If you know Google’s search ads, you will find Amazon ads intuitive too. As with AdWords, advertisers can bid on certain keywords and exclude others. So Amazon has not reinvented the wheel, it has simply adapted proven processes. This lets retailers draw on their existing experience from AdWords campaigns.
Amazon’s advertising policies
Amazon has many restrictions and pitfalls to watch out for. We therefore recommend that you familiarise yourself with Amazon’s advertising policies.
Amazon advertising policies
Early adopters win
The big Swiss e-commerce companies should continue to play to their strengths: their roots in Switzerland and their close ties with Swiss customers. For every other player in Swiss mail-order retail, though, Amazon could be your chance to win a bigger market share. So we advise you to look into the opportunities of Amazon marketing quickly and benefit before others do. The early bird catches the worm.
Are you looking for a sparring partner and/or an agency partner for your Amazon strategy? Feel free to contact me: caduff@adisfaction.ch.
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