The Seller’s Guide to Ecommerce Success on Amazon, Instacart, Walmart and Target

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The Seller's Guide to Ecommerce Success on Amazon, Instacart, Walmart and Target

April 7, 2021 7 min read

The opinions expressed by the entrepreneur’s contributors are their own.

The past year has seen a seismic shift in digital commerce. The pace of change has put many consumer brands in reactive mode, ensuring they are set up and promoted across all platforms.

However, it is a serious mistake to approach each platform individually – and without understanding its nuances. A cross-platform strategy is critical to sustainable ecommerce success, and there are several strategies you can use to get there. With these retailers aggressively competing for the e-commerce consumer and wallet share, brand manufacturers are often left in the dust. When brands feel lost in the nuances of these ecommerce platforms, they are not alone.

This is what you need to know as you dig into the top four retail and advertising platforms: Amazon, Instacart, Walmart, and Target.

Amazon

Amazon, the largest e-commerce retailer in the United States, is a pure e-commerce retailer. In stark contrast to value-added retailers like Target and Walmart, Amazon doesn’t think they’re selling things – they help people buy things. They are a platform for the sale and delivery of products, with more than half of their 2020 package volume being delivered by their own logistics company.

Successful search is critical to the success of a brand on Amazon, and Amazon’s platform is mostly paid for. With a low barrier to market entry for brand manufacturers, a loyalty-building Amazon Prime program, and fast shipping, Amazon is a necessary player for most consumer brands. However, Amazon can be expensive for brands. Between aggressive negotiation tactics with 1P providers, chargebacks, claims for defects, advertising costs and FBA (Fulfilled-by-Amazon) fees from third-party providers, Amazon is often the channel with the highest service costs for a manufacturer.

From a consumer perspective, Amazon’s weaknesses lie in its overwhelming consumer shopping experience, distrust of product and verification authenticity, and the environmental impact. Amazon’s future success is based on continuous innovation in both the advertising platform and operations to offset pure e-commerce shipping costs. You need to keep your focus on addressing consumer confidence challenges related to counterfeit products and fake reviews. Finally, the past year of antitrust activity may present new challenges and requirements for Amazon that will impact future profit streams.

Related: Gen Zers brag about making more than $ 3 million as an Amazon seller. Is it really that simple?

Instacart

Instacart is a food services platform that works with more than 500 retailers and 40,000 stores in the United States and Canada. Instacart is not a grocery or e-commerce retailer. They are a platform broker who stands above the retailer’s range and offers a delivery service. The consumer can order through Instacart directly from Instacart.com or on the retailer’s website using Instacart’s technology and delivery service.

Instacart has two sources of income: retailers who pay Instacart to be listed on their platform or use Instacart’s fulfillment and technology on their websites, and advertising income from consumer brands (CPGs) who advertise on their platform. The more brands rely on their articles at sales speed, the more they will be further advertised by the Instacart algorithms, for example with their highly converting and coveted personalized merchandising “Buy it again”. Instacart is generally generous with data on advertising results, but does not share retailer-specific data. This is a complicated factor when manufacturers want to map sales to a specific channel.

The future of Instacart depends on the ability to get consumers to begin their shopping experience on Instacart rather than on the retailer’s website. As more and more stationary grocery stores build their own online shops and fulfill orders, Instacart needs to be positioned as an incremental platform for traffic control. Otherwise, brands will try to build or buy these features instead of renting them from Instacart. Additionally, product prices for retailers at Instacart are often higher to cover the increased costs of the platform. During the pandemic, Instacart flourished. But after normalcy is restored, will consumers still tolerate higher prices or choose a cheaper BOPIS (Buy Online Pickup In Store) solution? The answer is still unknown.

Walmart

For many manufacturers, Walmart Bricks and Mortar’s approximately 5,000 locations have long been an integral part of their business. However, the past two years have seen significant and aggressive investments in e-commerce as Walmart takes a ditch with Amazon. Walmart is throwing everything on the wall trying to cut order fulfillment costs and find a path to profitable grocery e-commerce.

Walmart has some Amazon-like programs: Walmart + only launched a year ago and 21% of all consumers subscribe to it, making it a strong competitor for Amazon’s Prime program. Walmart offers manufacturers the ability to syndicate reviews from their own websites in order to best compete with Amazon’s customer reviews. Walmart has also expanded its Walmart Connect ad platform to offset the cost of shipping it directly to consumers. The third-party platform is also similar to Amazon’s, but Walmart vendors and sellers have yet to apply and be approved to join.

While Walmart has consolidated its brick and mortar and e-commerce purchasing teams to improve efficiency, the platform is not yet self-service. Unlike Amazon, most of the changes, promotions, and the like for ecommerce items have to be handled through a Walmart buyer, which can slow consumer brands’ success.

Unfortunately for Walmart, they are subject to different standards on Wall Street than Amazon. While Amazon was viewed as a technology company and allowed to “lose money” for many years while building its infrastructure, fulfillment, and free shipping money as it acquired consumers, Walmart is being subjected to the standards of an established retailer. Your challenge will be to manage this next surge in ecommerce investments to increase scalability and reduce costs.

Related: 4 Pillars of the New Ecommerce Frontier Business owners need to embrace

target

For Target, a trendy range is the key to their success and to ensuring that consumers keep coming back. It has long been part of the business for consumer brands to have shelf space in the busy Target stores. Target is known to be less interested in e-commerce and continues to focus on in-store and BOPIS consumer traffic.

Target recently stepped into the digital advertising game for retailers with the introduction of Roundel advertising. However, the platform is not yet self-service. All advertising initiatives and changes must be made through Criteo, Target’s ad platform provider.

Many brands are increasingly seeing Target as a competitor. Target is ideal for bringing branded products to market and expanding them. Target activewear brand All in Motion had sales of more than $ 1 billion in one year, and Mondo Llama Art Supplies’ recent launch is off to a good start.

Given that making trendy, inspiring decisions are critical success factors, it’s no surprise that Target has a high barrier to market entry for brands and sellers. Buyers must approve all new ranges online, and their third-party marketplace is closed to some trusted resellers.

Target’s success relies on really understanding the consumer, getting their inventory right, and sticking to what they can. Going forward, Target must find ways to continue winning in key categories like grocery and beauty to break a foothold against Amazon and Walmart. This will also help them ensure repeated foot traffic in their stores.

The central theses

Who wins when Amazon, Target, Walmart and Instacart challenge it for the ecommerce consumer? Are consumers winning or benefiting from this aggressive tactic? Are the brand manufacturers winning as they have more e-commerce platforms to deliver products to consumers? Or do the retailers win because they have the power to make product range decisions and have advertising dollars?

While it would appear that Amazon, Target, Walmart, and Instacart are in the country for the ecommerce consumer, a closer look reveals that their strategies and tactics are vastly different. Understanding the key differences and how to optimize them is key to manufacturers’ success on market platforms.

Related Topics: A Beginners Guide To Building A Profitable Ecommerce Business

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