The eCommerce Toy Story - How to win in the new Amazon-dominated toy market - Profitero
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The eCommerce
Toy Story
How to win in the new Amazon-dominated toy market
T H E E C O M M E R C E T OY S T O R Y 1
Contents
• Part 1: The state of play for eCommerce What you’ll learn
• What’s driving toy category growth online
• Part 2: What makes Amazon such a disruptor?
• How doing business on Amazon is different than brick and mortar
• Part 3: How to accelerate your toy sales online
• The importance of promotional events like Black Friday and
• 5 key takeaways Cyber Monday
• Where you should focus efforts to fast track your eCommerce
performance
About the author
Andrew supports Profitero’s customers, working closely with
them to drive their eCommerce performance across all areas
of the digital shelf. Prior to Profitero, Andrew spent 13 years
in Category Management and Shopper Marketing roles
Andrew Pearl
VP Strategy & at Mars, McCormick and Tata Global Beverages. Andrew
Insight, Profitero is a frequent speaker at industry events, including Kantar
Consulting and IGD, and his insights are regularly featured in
retail industry press.
2
Introduction Top retail destination for U.S. shoppers who purchased
toys from Toys “R” Us in last 12 months
Source: Profitero consumer survey, May 2019; n = 1,000 per market
The toy retail landscape changed dramatically in
Walmart 43%
2018 with industry giant Toys “R” Us announcing it
was closing all of its stores. While a long languishing Amazon 33%
company, its sudden exit from the market left a
vacuum in the toys & games market — one that looks Target 17%
set to be increasingly filled online.
Specialty toy store 6%
eMarketer predicts that eCommerce toy sales will
grow from 31.4% of U.S. retail sales in 2019 to nearly Other retailer 1%
half (47.9%) by 2023 — an increase influenced largely
by the closure of Toys “R” Us.
Amazon is now well-positioned to take advantage
of the $12 billion in annual sales that Toys “R” Us Top retail destination for U.K. shoppers who purchased
once generated. A Profitero survey conducted in May toys from Toys “R” Us in last 12 months
2019, surveying 1,000 respondents in the U.S. and
Source: Profitero consumer survey, May 2019; n = 1,000 per market
U.K., reveals that Amazon is second only to Walmart
as the top destination for U.S. shoppers who had
bought from Toys “R” Us in the previous 12 months;
Amazon 40%
for Toys “R” Us shoppers in the U.K., Amazon is now Argos 27%
viewed as the #1 choice for toys.
This playbook outlines strategies and tactics Smyths Toys 23%
designed to help toys & games manufacturers win
in this new Amazon-dominated toy market, and
Supermarket 5%
guidance to help you prioritize the levers you need to Other retailer 3%
pull to succeed on the digital shelf.
Specialty toy store 1%
T H E E C O M M E R C E T OY S T O R Y 3
PART 1.
The state of play for eCommerce
“The biggest thing we felt with Toys “R” Us being removed from the
market was shelf space. It really was the only national retailer that
we could showcase the range of products that Playmobil has to offer.
What does this do? It actually pushes customers online where the
range is more comprehensive.”
Alf Blohm
Sales Manager,
Playmobil
T H E E C O M M E R C E T OY S T O R Y 4
eCommerce growth is outpacing brick-and-mortar by 3:1
According to Euromonitor, the only channels with U.S. toy sales by channel share (2007 - 2022)
positive share growth in the last 10 years for U.S. toy
Source: Euromonitor International
sales have been eCommerce and hypermarkets (aka
supercenters in the U.S.), highlighting the importance
eCommerce Mass merchandisers Department stores Toy & hobby Hypermarkets
of price and product variety when deciding where to
shop for toys.
Analyst firm UBS suggests that online sales of 40%
toys are growing 2-3x faster than brick and mortar,
while eMarketer forecasts that the toys & hobby
30%
category will see a 23% growth on Amazon in
2019. Euromonitor’s analysis further predicts
that eCommerce will be the only channel to see
continued toys sales growth through 2022. Share 20%
10%
0%
2007 2010 2013 2016 2019 2022
T H E E C O M M E R C E T OY S T O R Y 5
3 in 4 U.S. online shoppers start their search for toys on Amazon
The results of Profitero’s consumer survey reveals that When shopping for toys online, where do you first start your product search?
toy shoppers have largely switched to a digital-first
Source: Profitero consumer survey, May 2019; n = 1,000 per market
mindset when shopping the category:
U.S. U.K.
• Amazon is the go-to destination for consumers
at the start of their purchase journey — whether
Amazon
77%
that’s online or in-store. When shopping for toys
70%
online, 77% of U.S. consumers and 70% of U.K.
consumers start their search for toys on Amazon.
Google
18%
24%
• Online is the primary way shoppers are buying
toys today: more than two-thirds of U.K. 2%
Other online retailer
consumers (70%) and more than half of U.S. 2%
consumers (56%) say online is their preferred
3%
channel to shop. Other search engine
4%
• We expected a large number of shoppers to
research products online but then purchase in-
store, particularly for a category like toys, where Which of the following best describes your shopping behavior for toys?
kids and parents alike may want to try it before
Source: Profitero consumer survey, May 2019; n = 1,000 per market;
they buy it. But, this doesn’t seem to be the case. Note: Respondents could only select 1 shopping preference
Our survey shows just 16% of U.S. consumers
U.S. U.K.
and 14% of U.K. consumers prefer to research a
toy online before buying in a physical store.
Prefer to shop for toys 51%
The ability to see, touch and play with a toy before most often online 62%
buying is clearly less important versus the online
benefits of convenience, price and assortment — Prefer to shop for toys 28%
most often in-store 17%
and therefore less of a differentiator and protective
moat for brick-and-mortar retailers. It could be one Prefer to research online 16%
of the reasons why Toys “R” Us lost influence, and a but purchase in-store 14%
warning sign to other brick-and-mortar-only retailers.
Prefer to research in-store 5%
but purchase online 8%
T H E E C O M M E R C E T OY S T O R Y 6
Amazon is the beast driving toy category growth online
As with nearly every other category it has disrupted, Amazon dominates online sales of 4 major toy brands (based on 2017 online sales)
Amazon holds the lion’s share of online toy sales.
Source: Jumpshot Inc.
Analysis from Jumpshot across four major toy brands
— Nintendo, LEGO, Hasbro and Mattel — reveals Amazon Toys “R” Us Walmart
that Amazon captured more than 83% of online sales
for each of these brands in 2017. 92%
89%
Jumpshot’s Retail Winners, Losers and Amazon 85% 83%
report shows that Amazon continues to dominate
the toys category online, representing 81% of all U.S.
online transactions in 2018.
In the U.K., Argos is currently the top toy retailer with
a 12% market share, followed by Smyths and Amazon,
both holding a market share of 9.6%. GlobalData
predicts Amazon will soon overtake Argos as the #1
toy retailer in the next five years due to its wide
range, low prices, and fast and affordable delivery
options. 13%
11%
6% 5% 6% 6%
2% 2%
T H E E C O M M E R C E T OY S T O R Y 7
“With more options than physical stores can provide, and
customer reviews to help narrow those options, people
are choosing the convenience of digital commerce
for their toy shopping — especially when prices are
competitive and shipping is low-cost. While retailers of
all stripes will have opportunities in this channel, it is
Amazon that is best positioned.”
Source: Euromonitor as quoted in Global Toy News, December 2018
T H E E C O M M E R C E T OY S T O R Y 8
PART 2.
What makes Amazon such a disruptor?
Nearly everything about Amazon — from its endless assortment and
ultra-competitive pricing to dynamic merchandising and next-day
Prime delivery — is quite different than any other retailer you’ve ever
encountered.
Doing business on the Amazon platform really does require a new way
of thinking to succeed.
On the following pages, we uncover what really makes Amazon such a
disruptor for the toys category.
T H E E C O M M E R C E T OY S T O R Y 9
1. Shoppers have (a lot) more choice on Amazon
Traditional retailers, such as Walmart or Argos,
provide a limited assortment of products for the
shopper to choose from. If we take the example of a
popular toy keyword such as “construction toys” on
Amazon, the search results return more than 50,000
listings. This compares to the 13 SKUs available in a
local B&M Walmart store in Rogers, Arkansas.
What this means is your list of competitors multiplies
exponentially on Amazon. It also means that
competitors winning on Amazon may not be the
same ones you’re competing against in traditional
retail. Increasingly, they may also be an Amazon
private label brand, for example, this AmazonBasics
toy storage organizer.
So, cracking the code on competing with the long tail
— e.g., the importance of search placement, winning
page 1, and other execution-oriented tactics covered
in Part 3 of this playbook — becomes increasingly
paramount. “Amazon is a very different retailer. They don’t curate a
range to present to the consumer — they allow the consumer
to browse the full product range and make their own
decisions on what they are going to purchase. On one hand,
that’s great if you’ve got Playmobil fans who want to easily
go and find those products. However, the competition is
much higher for consumers that are simply browsing.”
Alf Blohm
Sales Manager,
Playmobil
T H E E C O M M E R C E T OY S T O R Y 10PR O T I P:
“How can I tell who my serious competitors are?”
Not every competitor in the long tail of Amazon is a
threat. Some ways to prioritize where to focus:
1 2 3 4
Look at the biggest Track Fast Movers. These Always be aware of Look at who is bidding
brands in terms of sales are the ASINs that are the ASINs that are for your own keywords.
& share of sales in your moving up fastest on showing up on page 1 These brands are clearly
category and within the list of best selling on search results for the gunning for you and
those brands identify items in your category top keywords in your likely competitors to
their top selling ASINs. (Profitero offers free category. watch.
Which products are monthly reports to help
growing faster than yours you track them).
at the moment?
T H E E C O M M E R C E T OY S T O R Y 112. If you’re not online, smaller challenger brands will eat your lunch
One of the most common comments we hear from
our clients is: “Who are these challenger brands
selling online? I just don’t recognize them from the
brick-and-mortar world.”
That’s because the virtual aisles online are indeed
endless. Low barriers to entry for selling on Amazon
empower small brands to reach more shoppers and
defy the distribution moats large brands enjoy at
brick-and-mortar stores. These challenger brands
could easily steal away market share and gain ground
if you’re not there — or even if you are, and not
paying attention.
There’s no way around it, you will find a proliferation
of small challenger brands and low-priced imports
making a play for your category on Amazon — this is
very different than brick and mortar.
This example shows two challengers appearing on
page 1 of Amazon’s search results for “toys.”
It also underscores the importance that (1) not only
do you need to make your products available on
Amazon, but (2) you must clearly define your value
proposition in light of the increased competition, and
(3) figure out how to optimize your digital shelf so
shoppers can find and choose your brand and not
the competitor’s.
T H E E C O M M E R C E T OY S T O R Y 123. The Amazon Marketplace reacts quickly to market demand
Amazon’s third-party (3P) marketplace is a dynamic
beast and opens up a whole new set of challenges.
Take the example on the right in the U.K. — the
classic game of Monopoly. Besides the product being
sold directly (1P) on Amazon.co.uk, there are more
than 40 different 3P sellers offering the same item.
Consequently, on any given day, one of them can
drop the price to gain the Buy Box and steal away
some of your sales.
Inventory issues like out-of-stocks are also a huge
deal on Amazon, playing right into the hands of 3P
sellers. If you run into stock issues (which frequently
happens on Amazon), there’s likely a 3P marketplace
seller waiting to pick up the slack. This underscores
the importance of having the ability to regularly
and routinely monitor your assortment and the
marketplace situation for your products. If you don’t,
you’re in danger of losing control of your distribution
and sales on Amazon.
It’s equally important to pay heed to the risk of
counterfeit toy products. Inc. magazine reported
a story of a fake popular child’s pacifier, the
Mustachifier, which was being manufactured in China
and sold to U.S. consumers via Amazon’s third-
party marketplace, is a case in point. The genuine
manufacturer was only alerted to the counterfeit
product by consumer reviews where the product
was noted to be defective. They alerted the issue
to Amazon to remove the products but would have
been blind if not for careful monitoring of consumer
feedback.
T H E E C O M M E R C E T OY S T O R Y 134. Marketing & merchandising dynamics change daily on Amazon
As an online business, Amazon’s competitive and Example of a product designated as an Add-on Item by Amazon
marketing dynamics change more quickly compared
to a brick-and-mortar retailer.
For example:
In a brick-and-mortar store, promotions have to be
planned months in advance. But Amazon has its
own advertising program built into its platform that
virtually allows brands to sponsor keywords and
bump up their search position, and sales, at will. You
can run a promotion or drop a coupon and affect a
change on Amazon anytime you want… but guess
what? So can your competitors!
Unlike brick-and-mortar retailers, Amazon has the
ability to de-list products overnight if they become
unprofitable to ship, which is known as CRaP (Can’t
Realize any Profit), even if they sell at high volumes.
Amazon also can designate items as “Add-ons”
or “Prime Exclusive,” reducing their visibility and,
ultimately, sales. In fact, we saw one Profitero
customer lose 20% of sales in one week due to some
top-selling products becoming Prime Exclusive.
These kinds of ongoing dynamic activities can
massively swing sales and market share away from —
or toward — your favor.
You need to be on your game 24/7. And most
importantly, you need analytics to help you
understand which factors are moving your sales &
share up and down most. Otherwise, how can you
prioritize where to focus?
T H E E C O M M E R C E T OY S T O R Y 145. Holiday is make-or-break for toys online
Many toy purchases are event-driven, with the all- So, just as in the brick-and-mortar world, be sure Of the categories we studied across Black Friday
important holiday season delivering the lion’s share to stay on top of your category’s online seasonal and Cyber Monday 2018 on Amazon.com, the toys
of sales for the category. Amazon announced that promotions, and the magnitude of online traffic & games category recorded the highest sales spike
customers worldwide ordered more than 18 million events like Cyber Monday. on Cyber Monday: +3.4x the category average (index
toys on Black Friday and Cyber Monday combined in of 343). But toys had a strong showing on Black
This chart illustrates the level of sales spikes the toys
2018. Profitero analysis reveals that more than half of Friday too, with unit sales up +2.3x. On Amazon U.K.,
& games category can expect on Amazon.com during
all toy sales on Amazon — both in the U.S. and U.K. Black Friday was actually the biggest selling day of
the Q4 holiday season.
— happen in Q4. 2018 for the toys category.
Amazon.com in U.S. — Toys & games sales index 2018
Source: Profitero; Time period: Jan 2018 - Dec 2018
Index of 100 = average sales
T H E E C O M M E R C E T OY S T O R Y 155. Holiday is make-or-break for toys online (continued)
Toy brands with highest Q4 2018 sales index — Amazon.com
Source: Profitero; Index of 100 = toys & games December 2018 Q4 sales
Tier 1: Brands that make the top 25% of the sales
Tier 2: Brands that make the second top 25% of the sales Tier 2 brands
Tier 1 brands
475
408 404
305 288
176 168 159 142 140
100
Toys & games
category
Toy brands with highest Q4 2018 sales index — Amazon U.K.
Source: Profitero; Index of 100 = toys & games December 2018 Q4 sales
Tier 1: Brands that make the top 25% of the sales
Tier 2: Brands that make the second top 25% of the sales
Tier 2 brands
Tier 1 brands
324
249 243 225
152 210
147 134 132 128
100
Toys & games
category
T H E E C O M M E R C E T OY S T O R Y 16“For the toys category, it is imperative to have a
promotional calendar in place. There are so many
holidays beyond the obvious ones per marketplace that
you could benefit from greatly by being more aggressive
with pay-per-click and promotions.”
Stefan Jordev
Advertising Director,
Bobsled Marketing
T H E E C O M M E R C E T OY S T O R Y 176. Should you play on Prime Day?
While not nearly as important as Cyber Monday Prime Day sales lift vs. average daily sales of previous week
or Black Friday is to the category, it’s still worth
Source: Profitero; 2018 Prime Day sales indexed vs daily sales of previous week
considering Amazon Prime Day — a manufactured
sales event from Amazon which many consider a
mid-year sales-boosting opportunity during a Amazon U.S. Amazon U.K.
typically slow time on the retail sales calendar.
Although the sales lift we saw on Prime Day 2018
Electronics 215% Electronics 298%
may not be as dramatic as some other categories
Tools / DIY 200% Grocery 153%
such as electronics or tools & DIY, the toys category
still saw a sizeable increase. Profitero analysis of the Beauty 186% Beauty 104%
toys category reveals a 52% sales uplift on Amazon
U.S. and 83% sales uplift on Amazon U.K. compared Baby 167% Tools / DIY 90%
to the average daily sales of the previous week, and
was the top-selling day of the year (off-season) in
Health & household 152% Toys & games 83%
both markets.
Pet supplies 134% Pet supplies 58%
What’s more, a Profitero survey we conducted of
Prime members who plan to shop deals on Prime Day Grocery 108%
2019 reveals that 40% of U.S. consumers and 39%
of U.K. consumers plan to purchase toys & games
Toys & games 52%
during this year’s event.
T H E E C O M M E R C E T OY S T O R Y 186. Should you play on Prime Day? (continued)
Promotions can certainly pay off big for brands that The halo effect of a Prime Day promotion
participate — it’s not uncommon for brands running
Source: Profitero; Time period: July 9, 2018 – July 24, 2018
promotions to double or triple (or even more) their
sales versus their average daily sales.
Let’s look at a specific product example where we
saw this happen: The Fisher-Price Rainforest Music &
Lights Deluxe Gym typically sees average daily sales
of $2,237 on Amazon. On Prime Day 2018, sales
increased to $46,881 — a staggering 2,000x of the
product’s average daily sales. The halo effect lasted
several days afterwards, with the product seeing Average Average
average daily sales of $9,404 in the week following daily sales: daily sales:
Prime Day. $2,237 $9,404
7/9 7/16 7/17 7/24
T H E E C O M M E R C E T OY S T O R Y 19PART 3.
How to accelerate your sales online
There are many things you could do to accelerate your sales on
Amazon, but the real question is: What should you do?
This is exactly the question we set out to answer at Profitero.
Using our daily updating, item-level view of Amazon sales & share, we
examined the impact of more than 10,000 unique change events across
the digital shelf, spanning 7,200 products across categories. Change
events were things like updating content with specific types of images
or increasing the number of reviews. We then ranked each change
event from first to last according to what drove the most sales for the
products studied.
Over the following pages, we discuss the key digital shelf drivers
in more detail to help you deliver a sales-prioritized approach to
eCommerce optimization.
T H E E C O M M E R C E T OY S T O R Y 20“Amazon is a very different retailer to work with, and it
changes the dynamic. What we become is a buyer of
Amazon services to meet the strategic requirements
that we have as a brand. How do we defend the brand?
How do we go after new customers from other brands?
And how do we best showcase our product within the
platform? Amazon will sell you all manner of services
in order to do that. The discipline is actually picking the
right ones for you at any given time.”
Alf Blohm
Sales Manger,
Playmobil
T H E E C O M M E R C E T OY S T O R Y 21Step 1: Address availability issues
Product availability should be a top priority for all
manufacturers on Amazon and on every other online
Assortment
retail site. Monitoring out-of-stocks and fixing Search
& Availability
inventory issues is a quick and cost-effective path 1. 2.
to boosting eCommerce sales. Availability Traffic
Pricing & SALES &
Remember: It doesn’t matter how good your content Category
Profitability SHARE Placement
is in driving traffic to a product page if there’s not
enough stock on hand to make the sale.
Using an eCommerce performance analytics solution
1P/3P Sales
like Profitero makes it easy for brand manufacturers
Analytics
to routinely monitor out-of-stock (OOS) rates across 3.
an entire product portfolio — and oftentimes Conversion
pinpoint the root cause of out-of-stock issues.
Armed with these kinds of data-driven insights and
metrics, you can (1) take action to remedy problems Ratings & Product Pricing &
under your control, and (2) be better positioned to Reviews Content Profitability
negotiate inventory and supply terms with Amazon.
Profitero’s sales-prioritized approach to eCommerce optimization:
To maximize online sales, brands must ensure they are optimizing
the key levers of availability, traffic and conversion.
T H E E C O M M E R C E T OY S T O R Y 22First things first: Be in stock when shoppers look to buy
A surprisingly large amount of online sales are lost Toys brand OOS rate & opportunity by retailer
every day due to products being out-of-stock (OOS)
Source: Profitero. *Assuming other retailers represent 20% of Amazon’s sales.
when shoppers go to buy. As a brand, you may be
doing a terrific job driving interest and traffic to your
product pages, but then you fail to convert at the 27%
critical final moment because the retailer doesn’t Brand OOS
have enough inventory in-stock. On Amazon, this rate (%) 5%
$178,256
usually means a third-party (3P) seller is instead
getting credit for the sale.
The key is to fix OOS so you’re not leaving money on
the table. We’ve seen customers increase monthly $92,556
sales in the neighborhood of 3% - 5%, on average, by $85,700
proactively sharing daily availability data with retailers
Opportunity
to up their inventory levels.
by retailer
Consider this example, which demonstrates just how (3-month period ending
big the lost opportunity can be. The chart shows March 31, 2019)
the sales that a leading toy brand lost in a recent Amazon Target.com Total
3-month period due to out-of-stocks at Amazon and
Target.com. This toy vendor lost close to $200,000 in
sales in a single quarter due to availability issues!
But with an eCommerce analytics solution in place
that easily and cost-effectively detects out-of-stock
issues early on, the vendor could have acted quickly
to increase retailer inventory levels or develop a
back-stop fulfillment solution.
T H E E C O M M E R C E T OY S T O R Y 23Stay on top of pricing to protect availability
It’s clear that dropping the price can have a significant First movers and followers put pressure on price
impact on a product’s conversion rate — when the
Source: Profitero; Timeline: November 14, 2018 - November 21, 2018
price drops, sales increase. But this can also lead to
availability issues, underscoring the importance of Amazon 1P Amazon 3P seller
monitoring price drops on a regular basis.
Take this example. Amazon 1P reduced its price on
$40
this particular toy product in January 2018. The third-
party (3P) seller subsequently lowered its higher price 3 Amazon 1P goes OOS and
to match Amazon’s new selling price. After a few days, 3P seller increases price
$30
however, Amazon 1P went out of stock as a result of
2 3P seller on Amazon
the lower price. The 3P seller then took advantage
matches the price
of the situation by increasing the price back to the $20
original higher price point. 1 Amazon 1P
lowers the price
$10
PR O T I P:
$0
One way to fight back against 11/14 11/15 11/16 11/17 11/18 11/19 11/20 11/21
downward price pressures is by
implementing a MAP policy with all
your retailers and distributors. Using
analytics like Profitero’s, you can track
if and when these policies are being
violated.
T H E E C O M M E R C E T OY S T O R Y 24Step 2: To boost traffic, findability is fundamental
Once your product is available, maximize traffic Baby Einstein — Increase in sales driven by an increase in traffic
opportunities next — particularly on products that are & conversion during Black Friday and Cyber Monday, 2018
your “unsung heroes” — those products that convert
Source: Profitero, AMZ Maximizer; Timeline: November 10, 2018 - November 30, 2018
well with shoppers but are currently receiving low
levels of traffic.
Sales Conversion rate (%) Glance views
The following example shows the impact of increased
traffic (glance views) and conversion on sales for this
Baby Einstein product on Amazon.com during Black 80,000 60%
Friday and Cyber Monday 2018.
Understand that findability is fundamental. That is,
60,000 45%
where your products rank in search results on retailers’
Sales & glance views
Conversion rate
sites directly impacts your eCommerce success
online. If a shopper can’t find your product, they can’t
40,000 30%
buy your product.
Search is also a driver of the now-famous “flywheel
effect” at Amazon and other online retailers: products 20,000 15%
that place well in search results tend to sell more, and
products that sell more tend to place better in search
results. Success breeds success, creating a moat for 0 0%
competitors and rewarding those that move early and 11/10 11/12 11/14 11/16 11/18 11/20 11/22 11/24 11/26 11/28 11/30
decisively to win.
T H E E C O M M E R C E T OY S T O R Y 25If you’re not on page 1, you’re basically invisible
Page placement is the most critical performance Sales lift for products moving organically onto page 1 of search results
metric. 70% of shoppers never click past page 1. So,
Source: Profitero
your first goal in Search should be to increase your
share of page 1 placement for prioritized general +152%
keywords in your category — and your own brand
keywords relevant to your highest-potential products.
Larger teams or those working with an agency may
+100%
also want to tackle more advanced opportunities, like
+84%
sponsoring competitors’ brand keywords.
Our research shows that winning page 1 placement
for top keywords can double sales. This chart shows a
product moving from page 2 to the bottom of page 1
for a top keyword yields a +84% sales lift.
Products moving to the Products moving to the Products moving to the
BOTTOM of page 1 MIDDLE of page 1 TOP of page 1
Top search keywords
T H E E C O M M E R C E T OY S T O R Y 26Sponsor your own keywords, or someone else will
We covered the benefits of moving up to page 1, Toys & games popular keywords
but fair warning: an opposite effect in sales loss can
Source: Profitero, Amazon;
occur if you drop off page 1. This means owning your Branded keywords on Amazon.com, December 2018 60% of the 100 most
branded keywords should be an integral part of your
sponsorship strategy — especially given that 60% of popular search terms in
Branded General
the top 100 most popular search terms in Amazon’s Amazon’s Toys & Games
toys & games category are branded. lego toys
category are branded
keywords
lol surprise dolls squishies
melissa and doug drone
nerf guns remote control car
barbie board games
hot wheels puzzles for adults
funko pop kids toys
paw patrol toys stocking stuffers
pokemon cards baby toys
transformers toys girls toys
T H E E C O M M E R C E T OY S T O R Y 27Sponsor your own keywords, or someone else will (continued)
Let’s take a look at a few examples: Sponsored share of page 1 on Amazon (selected keywords)
On the left, we find LEGO 100% defending its Source: Profitero; Time period: April 2, 2019 - May 23, 2019
position on page 1 by sponsoring its own brand
keyword. Keyword: Lego Keyword: Barbie
In the example on the right, Mattel is sponsoring just
39% of keywords containing the brand name “Barbie”
— while competitors are sponsoring the rest (61%).
This results in Mattel-owned Barbie products being
pushed further down page 1. Worse yet, what if they Competitors: 61%
got pushed off page 1 completely? That could have a
disastrous sales effect.
LEGO: 100%
Barbie: 39%
T H E E C O M M E R C E T OY S T O R Y 28Sponsor your own keywords, or someone else will (continued)
Another area to consider sponsoring is keywords by Popular age-oriented keywords Share of page 1 sponsored results on Amazon
age group. This example shows the share of page 1 keyword: “toys for 7 year old boys”
Source: Profitero, Amazon;
sponsored results for the keyword “toys for 7 year old Non-branded keywords on Amazon.com, December 2018
Source: Profitero; Time period: March 2019
boys” on Amazon.com.
Toys & games LEGO 36%
toys for 1 year old 2 year old boy toys Force1 10%
toys for 3 year old boys games for kids 8-12
IQ Builder 8%
puzzles for kids ages 4-8 crafts for kids ages 8-12
toys for 2 year old boy toys for 1 year old girl USA Toyz 7%
games for kids ages 4-8 toys for 7 year old boys
Building Blocks 5%
“An interesting place to start your keyword
research, which is unique to the toy category,
is the age restriction label on your products.
We’ve seen so much potential around keywords
such as ‘toys for toddlers,’ ‘toys for 2 year old
boys,’ ‘girl toys 2-4,’ etc.”
Stefan Jordev
Advertising Director,
Bobsled Marketing
T H E E C O M M E R C E T OY S T O R Y 29Stay a step ahead: Put a scorecard in place
The keyword search examples on the previous page Example scorecard — Amazon placement
underscore the importance of having an analytics
Source: Profitero
solution in place to help you monitor which of your
competitors are targeting your products, and when
Toys — Amazon share of page 1 Share of top 3 spots
they’re doing it.
5 high frequency non-branded keywords 5 high frequency keywords
Here is an example of a scorecard you should be
Time period: March 2019
regularly receiving and reviewing to help monitor
what’s happening with keyword search. With this
kind of data at your disposal, you can easily see
who’s winning vs. losing keyword search, and 15% 16%
then act accordingly — whether that’s focusing on
improving organic search or putting more skin in the
15%
sponsorship, e.g., Amazon Advertising, game.
10% 11%
7%
9% 10%
7%
Spot 1 Spot 2 Spot 3
Fisher-Price Fisher-Price Vtech
Iplay, Ilearn Little Tikes Little Tikes
Vtech Vtech Gund
Vtech Infantino Keywords (ranked by search frequency):
Fisher-Price Bright Starts toys, kids toys, baby toys, toddler toys, infant toys
Baby Einstein Munchkin
Little Tikes LeapFrog
Sassy All other
Lamaze
T H E E C O M M E R C E T OY S T O R Y 30Step 3: Optimize conversion
Now that you’re getting enough traffic, it’s time to
boost conversion — ensuring your product pages will
Assortment
convert browsers into buyers. Search
& Availability
1. 2.
To boost conversion, start by identifying products in
Availability Traffic
your portfolio with significant conversion upside (i.e.,
those getting high traffic but have sub-par conversion Pricing & SALES &
Category
Profitability SHARE Placement
rates). You can do this via analytics like those
provided by Profitero, which help you measure the
conversion rates for your individual product pages.
1P/3P Sales
At the same time, be sure you’re not wasting time
Analytics
and money enhancing content for products that 3.
have other fundamental issues, i.e., low traffic and Conversion
low conversion due to out of stocks or pricing issues.
Fix those problems first before investing more on
content. Ratings & Product Pricing &
Reviews Content Profitability
T H E E C O M M E R C E T OY S T O R Y 31Step 3: Optimize conversion (continued)
Once you’ve identified products with significant Importance factors when shopping for toys online (rated extremely important / important)
conversion upside, focus on improving product
Source: Profitero consumer survey, May 2019; n = 1,000 for each market
content and then Ratings & Reviews for those
products. Assuming your products already get U.S. U.K.
enough traffic, visual content (images, video, and
enhanced or A+ content) correlate strongly with Price / promotion
87%
improved conversion rates. Profitero’s survey reveals 82%
that after price, detailed product descriptions and
Detailed description
85%
product photos are deemed the most important 80%
factors when shopping for toys online.
Product photos
84%
79%
Ratings & reviews
76%
68%
Brand name / 68%
specific product 56%
Product video
48%
32%
In-store pickup
46%
40%
T H E E C O M M E R C E T OY S T O R Y 32“As the landscape evolves, the lines between in-store and
digital interaction with a toy will be blurred. Consumers
will be looking for more content that mirrors the physical
engagement with a product they can get in store. Brands
that will succeed in this area will be looking beyond
product imagery towards creating videos, lifestyle
content and interactive visuals to capture audiences.”
Kelly Marcus
Associate Director, eCommerce SEO,
Reprise Digital
T H E E C O M M E R C E T OY S T O R Y 33Boost conversion & sales with enhanced content
We’ve carried out research on thousands of products Average sales lift related to change in product content
on Amazon to determine what types of content best
Source: Profitero; n = 7,134 products studied on Amazon.com;
converts. Time period: August 5, 2018 - February 23, 2019 (comparing 28-day periods)
As shown in the chart on the right, adding product Controlled for products with differences of no more than +/- 10% on the
following factors: OOS rate, lost Buy Box rate, promotion rate & price
images can have a significant impact on traffic
change. Products with at least 28 glance views, unit sales >10 units and
and conversion. Our analysis shows products that conversion rate >0.1% on the 28-day period studied.
improved their image count saw an average increase
of 90% on their conversion rate. This underscores the % average delta in conversion rate
findings of our survey in which product photos was % average delta in traffic (glance views)
rated the third most important factor when shopping
for toys online.
+90%
This is especially true for the toy category where
shoppers are not able to physically see how the toy
works.
+51%
+17% +19%
+6% +5%
Adding images Adding videos Adding A+ content
T H E E C O M M E R C E T OY S T O R Y 34Importance of keeping product content current
Equally important for the toys category is monitoring “A PIM solution is imperative for organizations
your content in case of product recalls or to respond
selling on Amazon. Every marketplace has different
to changing regulations. This is where a Product
Information Management (PIM) solution comes into requirements, however, most organizations would
play, helping you to constantly monitor and control do best to optimize their products on Amazon first.
your product information at scale. Implementing a PIM solution helps streamline
and accelerate time-to-market. It also enables
marketing and merchandising teams to control the
product information from creation to enrichment
to deployment across the enterprise, ensuring
consistent and exceptional customer experience.”
Johan Boström
Co-Founder,
InRiver
T H E E C O M M E R C E T OY S T O R Y 35Don’t fly blind: Use benchmarks to guide your content
An important point to keep in mind: Never focus Here are the product benchmarks you should be
solely on your products in a vacuum. Benchmarking striving for in the toys category on Amazon.com:
against your competitive set and particularly best-
in-class products for your category is a great way to
Amazon Best Sellers benchmark—Toys & games
ensure your products not only remain highly visible
to shoppers, but more importantly highly likely to Source: Profitero Amazon FastMovers, February 2019; Top Brands - Q4, 2018
convert browsers into buyers.
Among the key metrics you should be monitoring Reviews Star rating Content Content
and benchmarking against, include the number of Avg. # of reviews Avg. star rating Avg. # of images Avg. character count in title
reviews, average star rating, number of images, and
1,718 4.4 6 71
number of characters in your product descriptions
and bullet points.
Of course, Amazon doesn’t make it easy. Its
algorithms are constantly changing and, therefore,
what you need to optimize in your product content Top-selling brands in Amazon toys & games
changes too. “Set it and forget it” doesn’t cut it with
product content. If not already doing so, it’s a good
practice to set a regular cadence for product content
audits. We recommend quarterly at a minimum and
monthly if possible.
T H E E C O M M E R C E T OY S T O R Y 36Earn your Amazon badges
Scroll through any Amazon search results page and
you’re bound to see products with the “Amazon’s
Choice” and “Best Seller” badges.
Based on an analysis of 37,000 products on Amazon,
both with and without badges, Profitero learned
that Amazon’s Choice and Best Seller badges have a
major impact on a product’s traffic and conversion.
• Amazon’s Choice increases conversion rate by
25% on average, especially on products with a
high number of daily glance views
• Best Seller has a greater impact on traffic,
Increase in traffic & conversion when having an Amazon badge
increasing a product’s glance views by an
average of 45% Source: Profitero; 37,086 products studied, July 2018, US
We’re conducting more research to find out what
specifically causes a product to get the Amazon’s
‘Amazon’s Choice’ badge ‘Best Seller’ badge
Choice badge. But for now, it’s reasonable to
assume it’s a combination of all the steps featured
+17% +45%
in this playbook: (1) be in stock and priced right; (2)
optimize search to get found; and (3) offer great
Traffic
content. avg increase in avg increase in
It’s time to get cracking on making your priority daily glance views daily glance views
products as strong as possible across each of these
dimensions so you can optimize your Amazon
Flywheel.
Conversion
+25% +3%
rate avg increase in avg increase in
daily conversion rate daily conversion rate
T H E E C O M M E R C E T OY S T O R Y 37Have plenty of authentic ratings & reviews; they matter
Consumers rely heavily on the experience and Change in traffic, conversion & sales when adding reviews to a product on Amazon
opinions of others during their path-to-purchase. This
Source: Profitero; n = 7,134 products studied on Amazon.com;
is a key reason why having an adequate number and Time period: August 5, 2018 - February 23, 2019 (comparing 28-day periods)
sustained flow of high-quality, authentic ratings & Controlled for products with differences of no more than +/- 10% on the following factors: OOS
reviews on your brand website and syndicated across rate, lost Buy Box rate, promotion rate & price change. Products with at least 28 glance views, unit
sales >10 units and conversion rate >0.1% on the 28-day period studied.
online retail sites matters.
Systematically measuring the impact of reviews on
traffic, conversion and sales may matter even more. % average delta in % average delta in % average delta in
Ratings and reviews can have a profound effect on CONVERSION R ATE TR AFFIC (glance views) UNITS SOLD
online as well as offline performance.
It’s equally as important that brands routinely monitor
Up to 50%
-1% +25% +12%
consumer product feedback, which means having
increase in
an analytics tool in place to flag any problems or
reviews
negative comments.
“If you get good reviews then 50% - 100%
you should be able to convert increase in +1% +42% +42%
those page visits. It takes a lot of reviews
work, it takes a lot of effort, but
if you get it right, you’ve got a
marketplace of millions to reach.” >100%
increase in -3% +73% +65%
reviews
Alf Blohm
Sales Manger,
Playmobil
T H E E C O M M E R C E T OY S T O R Y 385 key takeaways
It’s imperative you make Amazon your priority today.
Our recommended path to get started and scale:
1 3 5
“Size the prize” — What’s your upside on Amazon? “Prioritize actions” — What fixes will yield the “Prove your business case” — Measure ROI to
Keep track of online penetration of the category biggest gains? If you are like other companies, your get more budget. The easiest way to expand your
and prioritize the specific retailers driving that online eCommerce teams and budgets are woefully under- eCommerce budget is to select a subset of products
growth. resourced. With traffic and conversion data for your and start optimizing them. This could mean adding
products, you can start to identify the products that A+ content or adding more images. It could mean
are most critical to improve and better prioritize upping your Amazon Advertising spend. Whatever
2
where to spend your Amazon Advertising and it is, you can work with Profitero to measure sales,
“See where you stand” — Are you outpacing? Or promotions dollars. share, traffic and conversion increases you get as a
are you trailing? There’s an old saying: “A rising tide result. Use us as an objective 3rd party to craft your
lifts all boats.” Just by the very fact that Amazon is business case for more budget.
4
growing, your brands will grow too. But unless you
can benchmark against competitor sales or growth of “Execute” — Don’t wait to hire… use agencies!
the category in total, you don’t know if you are truly Profitero has identified more than 100 unique
winning or not. Profitero’s sales and share estimates eCommerce agencies who have vast expertise and
can help you here. Similarly, you should be using experience optimizing all facets of digital execution.
digital analytic tools like those offered by Profitero Start piloting projects with them and you will be
to benchmark your content, search placement and surprised what you can accomplish on a lean budget
pricing against competitors. and in a small time window. (To identify an agency,
visit Profitero’s eCommerce Agency Directory.)
T H E E C O M M E R C E T OY S T O R Y 39Request a demo of AMZ WA NT YO U R OW N P E R S O N A LI Z E D
P L AY B O O K?
Maximizer today and Profitero’s eCommerce experts will create a
learn how Profitero can personalized eCommerce Acceleration Playbook
for your brands, for FREE.
help you win on Amazon! For more information,
email sales@profitero.com
or visit http://www.profitero.com.
Request a demo
For additional guidance, contact Profitero today at:
Tel U.S.: +1 844 342 7464
Tel U.K.: +44 208 123 3101
A B O UT P R O F ITE R O
"We selected Profitero as it provides us with Profitero is the eCommerce Performance analytics
accurate, detailed and, most importantly, platform of choice for leading brands around the
world. With Profitero, brands can measure their
actionable insights on the key levers driving digital shelf performance across 8,000+ retailer sites
eCommerce sales, helping us to take both strategic and mobile apps in 50 countries, gaining actionable
decisions and prioritize daily actions. Profitero’s insights to improve product content, search
placement, ratings & reviews, availability, assortment
user-friendly platform and personalized alerts and pricing. Profitero also allows brands to measure
were also central to our decision." their Amazon sales & share performance, along with
the ability to correlate their sales performance with
Pauline Junne
changes across the digital shelf. Many of the world’s
EMEA eCategory Manager,
leading brand manufacturers depend on Profitero’s
Groupe SEB
granular and highly accurate data to measure and
improve their eCommerce performance. These
include Bayer, Beiersdorf, Dorel Juvenile, Edgewell,
General Mills, Kids II, L’Oreal, The Master Lock
Company and Molson Coors.
40T H E E C O M M E R C E T OY S T O R Y 41
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