Matt Rees, managing director of Fiora
The agency model ebbs and flows, with specialisms being in vogue one minute and integration taking centre stage the next. Fiora was founded on the principle that expertise shouldn’t be outsourced – that an agency should have the talent and experience to run end-to-end campaigns under one roof. Four companies came together to form that.
And that model has proved more adaptable than many predicted – especially through the darkest days of the pandemic when the “one roof” principle was stretched, and the term “hybrid” entered our consciousness.
So, when we were thinking about launching a new service, we discussed whether it should be part of our integrated offering, or should sit as its own entity. Here’s why we went down the consultancy route:
- Amazon doesn’t fit the mould
Amazon is its own beast. It doesn’t fit neatly into other ecommerce moulds, which is why it’s the most successful online retailer in the western world. Respecting this is treating it as a separate entity, and a big part of this was also bringing in a specialist to lead who’s been focussing on Amazon for over a decade, through all its transitions.
A slew of media announcements in 2022 championing Retail Media Networks as the next big advertising channel provided further impetus to our decision, accompanied by various impressive growth forecasts from trusted sources. In the UK alone, Tesco, Sainsburys, Boots and Ocado have all moved in on this space. The Financial Times referred to this phenomenon as the “third wave” of digital advertising.
- A laser focus on Amazon
We embrace a wider digital offering but we understand that some brands have a specific focus on Amazon, and a consultancy approach allows us to work with those companies on a standalone basis. The model also enables us to work with smaller, challenger brands that have enormous potential but are starting small.
We can offer more in-depth consultancy, going back to basics – such as how to set up a business or channel on Amazon which covers product research, product sourcing, logistics, importing and price and margin analysis. There’s still a layer of mystique around Amazon that we’re trying to counteract.
- Amazon and cross-channel behaviour
A consultancy approach also allows us to better focus on cross-channel behaviour. We know the importance of an e-commerce channel for introducing consumers to new brands and driving trial. But once customers have bought into your brand, they will search for cheaper and more convenient ways of getting their hands on it. Perhaps not surprising given the security and convenience Amazon offers.
To illustrate the point, an FMCG brand we launched online a few years back listed on Amazon shortly after we built their e-commerce site. After 18 months of driving traffic and sales via the website through paid social media and PPC search, we conducted some customer research. We were trying to understand the cross-channel relationship between the ecommerce website and their Amazon sales.
Research showed that 78% of e-commerce customers had first purchased the brand direct from the e-commerce site, but only 55% went on to purchase again from the website. Conversely, only 8.5% of customers had first purchased from Amazon, but 15.5% subsequently purchased via Amazon. We also saw the proportion of ongoing purchasing through other online retail sites double over the proportion of first purchases.
However, from an effectiveness point of view, this diminished the true value we were creating for the client through e-commerce. When customers go on to purchase via Amazon, we lose sight of their lifetime value, making it hard to truly assess the value of customer acquisition via the website. At the same time, we were building a core consumer base on Amazon that needed protection through effective PPC bidding and store content.
Our Amazon Consultancy enables us to have a better, longer-lasting oversight of cross-channel behaviour. Amazon is also increasingly aggressive on Google Search, surpassing over 50% of Google Shopping search impressions in 2021 according to some sources. It’s now everyone’s biggest competitor in Search, and we see this on a daily basis when managing campaigns for our clients. Developing a standalone capability on Amazon equally offers some defensive protection against this trend.
The agency model has been tested to the extreme, but it’s bending rather than breaking. By introducing specialist consultancies we can offer the best of both worlds – an in-depth, expert focus but always, with one eye on the bigger picture.