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Amazon 101:Grow your business with Amazon
AMAZON EU SARL CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
1. Confidential Information. As used in this Agreement, “Confidential Information” means all nonpublic information relating to Amazon or disclosed by Amazon to the above-referenced company, its affiliates or the agents of any of the foregoing (collectively, “Supplier”) that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, reasonably should be considered as confidential. Confidential Information includes, without limitation (i) all nonpublic information relating to Amazon’s technology, customers, business plans, promotional and marketing activities, finances and other business affairs, and (ii) all third-party information that Amazon is obligated to keep confidential. Confidential Information may be contained in tangible materials, such as drawings, data, specifications, reports and computer programs, or may be in the nature of unwritten knowledge.2. Exclusions. Confidential Information does not include any information that (i) is or becomes publicly available without breach of this Agreement, (ii) can be shown by documentation to have been known to Supplier at the time of its receipt from Amazon, (iii) is received from a third party who did not acquire or disclose such information by a wrongful or tortious act, or (iv) can be shown by documentation to have been independently developed by Supplier without reference to any Confidential Information.3. Use of Confidential Information. Supplier may use Confidential Information only in pursuance of its business relationship with Amazon. Except as expressly provided in this Agreement, Supplier will not disclose Confidential Information to any person or entity without Amazon’s prior written consent. Supplier will take all reasonable measures to avoid disclosure, dissemination or unauthorized use of Confidential Information, including, at a minimum, those measures it takes to protect its own confidential information of a similar nature. Supplier will segregate Confidential Information from the confidential materials of third parties to prevent commingling. Supplier will not export any Confidential Information in any manner contrary to the export regulations of the United States.
Confidentiality: The Short Version
»Information we are sharing with you is confidential
»We want you to learn more about our business
»We ask that this presentation and its content be shared only with persons inside your company who have a need to know
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Agenda
»Retail is Evolving
»The Vision
»Why Amazon
»Myths vs. Reality
»Work with US3
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
E-Commerce Growth Driver
Consumer shopping behavior is changing
RETAIL IS EVOLVING
TIME
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
The State of e-Commerce
E-Commerce growth
significantly
exceeds the growth of total retail-comScore, August 2011
14%
3%
Retail Growth1E-Commerce Sales Growth1
Q4 2011 YoY Growth
Source: 1. ComScore “State of the U.S. Online Retail Economy in Q4 2011,” January 2012; Note: Retail growth does not include auto sales, gas, or food and beverage.
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Online Research Influences Offline Sales
2012 2013 2014 2015$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
43%
44%
45%
46%
47%
48%
49%
50%
51%
52%
53%
$218 $239 $259 $279 $1,229 $1,347 $1,458 $1,553
46%
49%
51%52%
Web-Influenced Retail Sales(000) Online Retail Sales US online and Web-influenced retails sales as a % of total sales
Sources: Forrester Research Web-influenced Retail Sales Report, 2010 to 2015 (US), Jan 2011
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Decision
Ecommerce Empowers Customers
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Traditional Distributor
End User
E-Commerce
End User
Decision
Garage
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Top Global Retailer Brand
Sources: Millward Brown Top 100 Most Valuable Global Brands 2011
#1 Global Retailer Brand:
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
>$50 $50-$200 $200+
36%
27%
37%
Amazon’s Large and Active Audience
Monthly Unique Visitors (US):
90MM
Avg. Visits per Visitor (US):
5.2
Active Global Customer Accounts:
173MM
Avg. Daily Unique Visitors (US):
11.1MM
Note: Active Customer Accounts are unique email addresses that have placed an order in the last 12 monthsSources: 1. Amazon Investor Relations; 2. ComScore PlanMetrix March, 2012.
12 2 2
8%
37%
22%
33%
0-18 18-34 35-44 45+ <$25K $25K-$75K $75K +
14%
46%40%
Household Income of Amazon Unique Visitor’s2
Age Composition of Amazon Unique Visitor’s2
% of Amazon Shoppers Who have Made an Online Purchase2
Amount Spent
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'02 '03 '04 '05 '06 '07 '08 '09 '10 '11$
$10,000
$20,000
$30,000
$40,000
$50,000
Media EGM Other
Net Sales History
Sources: Amazon Investor Relations
$3.9$5.3
$10.7$8.5
$14.8
$19.2
$24.5
$6.9
$34.2
$48.1
10
Mill
ions
$
Growth in sales YoY (2010-2011)
41%
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Much More Than a Bookstore
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Electronics & General Merchandise now account for
64% of Net Sales (as of Q2 2012)
In Q2 2012, Worldwide EGM was $8.16 billion
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
—Jeff Bezos
start with the
customerand work backwards
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Amazon’s Vendor Vision
Create strategic, long-term vendor relationships
enabling our virtuous cycle of
value, selection & convenience
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Part Finder on Amazon.com
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Part Search Results
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Part Detail Page
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Full Selection
Part finder allows customers to find every possible part out of millions of application specific
parts
Offering your full selection on Amazon is important: if your part is not there, somebody
else’s will be
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AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Full control over your product information
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100% on-message, all day, everyday, 24/7/365
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Customer Reviews
of consumers read product reviews
when considering a purchase
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Increase trust in your brand and improve your sales
92%
Source: Channel Advisor Consumer Shopping Habits Survey 2010
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
How does Amazon promote Brands
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Search Engine
Marketing
Search Engine
Optimization
Vine Community
Affiliate Marketing
Amazon Prime
Email Marketing
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Myth vs. Reality
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Amazon
brands.premium doesn’t sell
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Myth vs. Reality
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Amazon is a:A. RetailerB. Marketing ChannelC. Research DestinationD. Digital Content
Provider
E. All of the Above
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Myth vs. Reality
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I do not plan to go on-line
You are on-line. At Amazon you have full control
over the customer
experience
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
What’s next?
• Sign terms and conditions using Amazon Vendor Central
• You create all detail pages in 5 languages in Amazon Vendor Central
• Amazon makes initial stock-up PO based on your advice
• Additional inventory is ordered based on customer demand and customer visits to your detail pages
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For more information contact » Viabhav Kalway – Sr. Vendor Manager
» +352 691 999 864
» kalway@amazon.lu
APPENDIX
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Adjusting Your Strategy for Online Retailing
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Amazon Differences Winning Manufacturer Approach
1. New Retail Channel Redesign your partnering strategy to reflect the new channel needs
2. Online Shelf Invest in appropriate “e-packaging” for your customers
3. Consumer Direct Supply Chain Optimize for the radically different product flow
4. Merchandising and Marketing Environment
Leverage the Amazon customers/viewers to the fullest extent
5. Platform for Innovation Exploit the Amazon platform to create new capabilities, products, or businesses
Amazon is Different: successful vendors who partner with us keep these differences in mind.
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Pitfalls to Avoid
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Common Pitfalls Considerations
Simply offering the same products and merchandising material developed for offline channel
-Make your entire assortment available on Amazon-Ensure appropriate packaging-Provide thoughtful and extensive digital content-Submit products well in advance to allow for pre-order
Not reallocating funds from unused offline-focused activities
Funds and resources available for reinvestment include:-Slotting Fees-Field support for in-store execution-Physical promotion support (mods, shippers, displays)-FSI coupons
Underfunding new activities or new services not offered by offline retailers
-Support free shipping for heavy/bulky items-Take advantage of Amazon advertising opportunities-Invest in Subscribe & Save, Free Financing, etc.
Failing to take advantage of online efficiencies
-Avoid unfavorable “Channel” terms-Reconsider order minimums to optimize for the new flow-Offer returns, damage, and expired product allowances
Web-savvy manufacturers have learned to avoid these common errors
AMAZON SERVICES CONFIDENTIAL© 2012 Amazon.com, Inc. or its affiliates
Keys to Your Success
Keys
Give us best-in-class support by assigning your “A” Team…direct contacts to Marketing, Merchandising, Brand, and Logistics teams
Leverage Amazon.com as a customer education and marketing channel, not just a retailer
Ensure that we have full-line selection
Optimize your “e-packaging” by loading your richest content
Partner for logistics integration to ensure high “in-stock” levels
Launch new products in advance on pre-order
Leverage cross-category branding opportunities
Avoid complex and hard-to-implement policies
Use our customer base for product and market input
Use our analytical tools in conjunction with your offline efforts
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Collaboration Supports Both Online and Offline Sales