4 ways retailer-brand relationships will change in 2018
Columnist Andrew Waber takes a look at four trends taking shape for 2018 that will help brands and retailers collaborate to improve the digital shopping experience.
Retailers have always been in the business of creating great shopping experiences. But Amazon has taken the old adage of “the customer is always right” and pushed it to what amounts to an algorithmically driven extreme.
Amazon (and now other retailers) are continuously adjusting just about everything regarding the shopping experience based on customer behavior and conversions. So, what’s changed? Optimizing towards greatness is done at a more rapid pace. The year 2018 is likely going to be a year when brand marketer savviness drives a more equitable relationship with retailers.
Brands are inherently put under increasing pressure by retailers to deliver the muscle that powers shopping experiences. Detailed copy, lots of photos, videos, experiential content, product specifications and more — and this is a list that continues to grow larger. As part of my job, we recently conducted a survey of 200 brands that found four trends to expect from brands and retailers in 2018 as they collaborate to satisfy digital shoppers.
1. APIs are the inevitable next step
Algorithms are feeding dynamic changes to retailers. Walmart and The Home Depot are two major retailers that have already rolled out an API-level connection to allow them to make adjustments to their schema, categories and more on the fly and let their suppliers meet these new requirements in short order via a direct connection. Other major retailers are in the process of rolling these systems out as well.
The aggregate sentiment from the brands we surveyed could be distilled as “It’s about damn time.” More than 31 percent of brands reported that refreshing product content takes over a month on Amazon, Walmart and Target, and 20 percent of brands said new products take three to four weeks to go live on Walmart, Target and The Home Depot. An API connection is only one side of this equation due to content approvals, but we’ve seen our customers get substantial improvements in speed to market once enabled.
Yet, even for retailers that have rolled out APIs, getting brands to ditch spreadsheets and get on board with the new system has been a slog. Our survey found just 52 percent of brands use software systems, rather than spreadsheets, to manage product content internally, creating a natural blocker to communicating product content to retailers via an API. While that figure is up from the 38 percent share observed in 2016, there remain a lot of brands who have been slow to change the status quo.
Brands need to get smart here. If you can’t respond to retailer changes as quickly as possible, your products will naturally get pushed down in the retailer’s SERP by those brands that have addressed those changes in their product content.
Meanwhile, retailers that haven’t yet rolled out API-level connections should absolutely do so to comprehensively address the customer experience hand-in-hand with their suppliers.
2. Data sharing will be a competitive advantage
As brands grow savvier when it comes to best practices in online retail, retailer-specific performance data is overwhelmingly a kind of holy grail. A full 79 percent of brands surveyed said they would dedicate more resources to retailers passing back performance data.
Google and Bing Shopping are the only two retail channels that pass back these types of insights readily. Amazon charges enormous fees to get this type of data, and even then, it is limited in scope. This needs to change. To be clear, in today’s landscape, a commitment to providing insights to brands will benefit retailers and be a point of differentiation to suppliers.
As in most cases, data will help suppliers make better decisions. Plus, if manufacturers are more likely to shift resources to retailers providing these capabilities, the result is richer content for the retailer, more frequent updates to content to conform to consumer preferences and a greater ability to meet new site capability or product categorization changes.
Collectively, this has a meaningful impact on retailers looking to create great shopping experiences and gain market share.
3. Retail is happening everywhere; brands are broadening their focus
The survey revealed an incredibly wide breadth of what brands consider high-priority channels for 2018:
- Online marketplaces: 45 percent
- Social media: 42 percent
- D2C (direct-to-consumer) channels: 39 percent
- Brick and mortar: 38 percent
- Mobile shopping apps: 37 percent
Meanwhile, a full 89 percent of brands surveyed are selling D2C (direct to consumer), and 59 percent of them are regionalizing their product content efforts for this purpose. The overarching theme is that suppliers are focused on developing a deeper connection with consumers — apart from the biggest retailers.
When viewed against the success of D2C companies like Dollar Shave Club and Warby Parker, it’s clear more brands feel this closer relationship is worth investing in. And increasingly, the technology is there to allow them to do it.
4. Increased pressure on brands will reflect back on retailers
There is a notable frustration across survey participants when it comes to working with retailers. One in four manufacturers surveyed reported lack of business insights, different criteria between retailers and complicated product setup processes as common challenges working with online retailers.
No supplier-retailer relationship can be perfect. But with retailers increasingly reliant on brands to help them sell goods, and the daily — even hourly — changes within retailer systems, the pressure should cause the pendulum to swing back the other way.
A sizable number of our large customers have taken to group “lobbying” of online retailers, specifically on the subjects of reducing friction on data access and product update capabilities. These efforts have produced results and are likely to continue as retailers recognize the need to reduce barriers for brands to be their best on their sites.
Opinions expressed in this article are those of the guest author and not necessarily MarTech Today. Staff authors are listed here.