Amazon says majority of brand purchases are serendipitous

The majority of searches on Amazon contain no brand names, while in Japan, nearly three-quarters (74%) of customers end up discovering new products and making an unplanned purchase when they visit the ecommerce site.

This serendipitous nature of shopping mirrors how consumers have browsed physical stores for years, and marketers should evolve their ecommerce strategies accordingly, the country manager of Amazon Advertising Japan said on Wednesday (June 10). 

Shinji Tsukamoto was speaking at Advertising Week JAPAC in a session with Shinji Okuyama, the chief marketing officer of Japenese confectionary manufacturer Ezaki Glico.

Okuyama, who is responsible for the marketing of popular brands including Pocky and Pretz, said the businesses' online commerce strategy takes inspiration from the offline shopping experience, which envelops much more than just a purchase, referring to the strategy as 'C-commerce', meaning conversational commerce. 

"The 'e' in ecommerce stands for electric, it translates to an electric transaction. Since business is more human contact by its meaning it should be 'C-commerce' where there should be communication through the transaction," he said. "For example, I don't go to the grocery store just to make a purchase but rather to gather information from the interaction, find some good unexpected vegetables and recommend to my neighbours the grocery store has so-and-so selection. In marketing terms, awareness, consideration, purchasing, recommendation."

"We have positioned 'C-commerce' to digitally supporting the shopping experience many of us engaged in prior to the digital age," Okuyama added.

Tsukamoto said Ezaki Glico's concept of ‘C-commerce’ is being applied at Amazon as well. He said Amazon’s internal data in the US revealed that nearly 70% of Amazon customers 'window shop', also called ‘webrooming’.

"We have seen insights where customers seem to choose Amazon from the upper phase of the purchase funnel—discovery and consideration," he said.

He also revealed that in 2020, nearly three-quarters (74%) of customers in Japan discovered new products on Amazon Japan and made an unplanned purchase. Furthermore, up to 69% of customer queries on Amazon contain no specific brand names.

"This means customers are open to discovering new brands," he commented. "I think the goal is for consumers to have a seamless experience regardless of whether they are online or offline."

In response, Okuyama said this proves why brands should shift from viewing online purchasing as 'ecommerce' to 'C-commerce', since ecommerce is predominantly focused on efficiency, and 'C-commerce' is developed around consumer insights.

“The challenges, strategies, measures and outputs will be completely different depending on whether the opportunity to connect with consumers online is viewed as ecommerce or 'c-commerce'," he said. "In ecommerce the main focus will be on simplicity, efficiency and convenience compared to offline. What we need to be aware of is that if the value of consumers is categorised for efficiency via ecommerce, we risk losing the original brand value.

"On the other hand, if we look at it as 'C-commerce' the starting point will naturally revolve around consumer insights. While interacting with consumers, we can learn what the value of the brand is, why it is recognised, purchased and recommended. Digitally, we are able to have this conversation and understand the meaning of a brand."

The sentiment was shared by Tsukamoto: "The most important thing is to start from the customer. At Amazon this is our ‘customer obsession’ principle. The second [most important thing] is to listen to customer voices and insights and innovate products and service offerings. It's easy to forget, but it's vital to remember to work backwards [from the customer]."

Amazon is the top ecommerce platform in Japan for traffic, according to data from SimilarWeb, but several reports cite Rakuten as having a higher share of market by annual sales.

Okuyama also offered insight into how brands can deliver appropriate marketing messages during COVID-19.

"At times like this, it is important to focus on the brand purpose and deliver true value to our customers. The brand purpose becomes our ‘north star’ in identifying our location and core values within society," he said, adding that customers are "becoming stricter in identifying authenticity". 

"To me a good brand purpose does not change under any circumstances, it could be peaceful or chaotic in society. Brands should always deliver their promised values to their customers at all times. For example, Pocky's ‘Share happiness’ is to me a good purpose where no matter the circumstances the emotion of sharing happiness does not change," he added.

The Advertising Week session described above was conducted in Japanese. Quotes and comments in this story come from translations provided by Advertising Week.