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How Brands Are Building Synergistic Relationships With Amazon
You have likely heard the news: Brick-and-mortar retail is dying a gradual death at the hands of e-commerce and particularly Amazon. This cliche, well-worn narrative does not paint a very accurate picture of the evolving retail landscape. It certainly does not explain why Amazon has opened its own physical locations for 4-star products, books, and other goods.
Although some brands and retailers have struggled to keep up in the age of e-commerce, others across numerous industries have taken the initiative to create innovative, new partnerships with Amazon.
In this post, we will investigate these partnerships to reveal how brands can potentially leverage Amazon’s massive consumer base and logistical operation for their own goals. Some of these partnerships entail brick-and-mortar retail and some do not.
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Big Box Retail
In 2017, Kohl’s struck a deal where Amazon customers could drop off their unboxed returns at participating stores in Chicago and Los Angeles for free shipping. Through this pilot program, Kohl’s was able to boost their sales numbers by driving new foot traffic to their stores.
In exchange, the big box retailer set aside space where customers could learn more about the “Amazon Smart Home Experience” and the Amazon Echo. Amazon also could simplify the returns process, one of its major customer pain points. Since then, this successful program has expanded to Milwaukee.
Big Box Electronics
In the spring of 2018, Best Buy and Amazon partnered to sell smart televisions programmed with Amazon’s Fire TV operating system. Both Toshiba and Best Buy’s house brand, Insignia, offer “Fire TV Edition” models, which are sold in Best Buy stores and on Amazon. These televisions are also compatible with Amazon Echo which includes the Alexa voice assistant.
Through this deal, Best Buy agreed to no longer program Roku’s operating system in its Insignia lines. In exchange, it received a preferred third-party status on Amazon for these products.
The World’s Leading Apparel Brands
Adidas, Nike, and J-Crew are world-renowned apparel brands that have all partnered with Amazon. Through this partnership, each brand has access to a vast consumer base that consists of both Prime and non-Prime members. Although each brand does not sell its full range of products on the e-commerce platform, it can more carefully control its brand storytelling with Amazon Stores and EBC or A+ content.
In the summer of 2018, Hyundai partnered with Amazon to create a unique digital showroom. Through this showroom, customers can compare pricing and reviews, book a test drive, and find a dealer in their local area. In terms of brand strategy, Hyundai could own the top-of-the-funnel research, make the shopping experience more streamlined, and drive customer engagement for select brick-and-mortar locations.
Sears, the original everything store, struck an innovative automotive partnership with Amazon in May of 2018. Customers who purchased any brand of tires through Amazon could have them sent to the nearest Sears Auto Center and installed on their car. Installation, wheel balancing, and other smaller services are all included in the price. Even though Sears has since filed for bankruptcy, this program proved to be enough of a success that it was eventually rolled out nationwide.
This October, Travelers Insurance announced a partnership to create an innovative Amazon storefront promoting home insurance. The store provides home insurance and risk management info, smart home kits, discounts, and installation services. Through this storefront, customers can purchase Alexa-compatible smart home kits with security cameras, motion detectors, and other similar devices, which can also make them eligible for home insurance discounts. A free Amazon Echo Dot with Travelers Skills is included.
Arcadia Power helps people enroll in programs that promote clean energy and cost savings. This past October, they partnered with Amazon’s Home Services to have Arcadia’s two new subscription-based, home efficiency bundles and products installed. The bundles include smart home devices like smart LED bulbs, an Amazon Echo Dot, Wi-Fi enabled smart plugs, and the ecobee smart thermostat.
Amazon and Amex unveiled a co-branded card for small businesses. American Express claims to be the top card issuer for small businesses and Amazon wants to drive up its special Prime membership program for small businesses.
Cardholders with an Amazon Prime membership will have a few options with the card. They can choose between an interest-free loan for 90 days or 5% back on purchases through Amazon. Those purchase can be made on Amazon.com, Amazon Business, Amazon Web Services, and Whole Foods Market. The no-fee card will also reportedly offer 2% back on purchases at U.S. restaurants, gas stations, and on mobile-phone services.
Buzzfeed partnered with Amazon to found a new book club just in time for those cold winter months. At the start of each month, Buzzfeed announces a new book which members can pre-order for a discount on Amazon. Buzzfeed will also receive a percentage of sales Amazon makes when members use affiliate links.
Brands can no longer ignore Amazon as an independent and wholly unique sales channel in their overall business strategies. With over 55% of product searches starting on Amazon, not Google, the e-commerce giant offers a vast consumer base, including over 100 million Prime members worldwide, and incredible exposure for any brand that wants to capture new revenue or continue to solidify their brand presence in the digital world.