Paul: Hello, welcome to Building Brand Advocacy. My name is Paul Archer. I am your host. And today I have a very special guest. He's going to tell us all about Amazon. So this is a very tactical episode. We're going to be digging into some of those details specifically with the beauty industry, but actually Renee Parker has experience from, well, everything from banking to Amazon, to the beauty industry. I'm just not going to do her any, any favours trying to describe it. So Renee, lovely to have you here. Tell us a little bit about who you are and what you do.
Renee: Thank you, Paul, for that intro. So yeah, I'm, as I always feel pressed to say American, but have spent the past 10 years in the UK, so I'm based in London. Yeah. I was a banker for a long time before I did anything else. So I worked on Wall Street. So I was at JP Morgan in New York for four years and did a variety of things there, including impact investing, which is kind of hippie, do-gooder investing that I'm super passionate about. From there, I got my MBA in finance and then came over to London with Deutsche Bank. And so I did emerging markets, fixed income, bonds, sales and trading, covering the Middle East and traveling to the Middle East every week for four years. But I love, love. beauty, consumer, kind of new ways of messaging, industries that felt like they were going to be the future versus where I was sitting at the time on a trading floor, been more and more things were moving to electronic automated trading. And I was sitting around a bunch of people much, much older than me who were kind of telling me about the good old days that I of course would never have been invited to at the time. So enjoyed so I started doing lots of side hustling after hours because the grass that's the thing with market hours You know your trading hours are done at 3 4 p.m. If you're working with Dubai, so I was taking startup classes I got my diploma in cosmetic science. I started a little beauty brand. I Started beauty blogging. I just went all in and then I finally had my kind of come to Jesus moment Which was I was a senior vice president. You're starting to make real money. I was like I either do this and have my 2.5 kids in Golden Hand Cuffs, or I make my move. And I had read a lot about how Amazon was getting into, trying to get into the premium beauty space. And I thought similar to some of the banking work I did at JP Morgan, it's going to be this intersectional space where you've got a very kind of entrenched historic industry, you know, premium French brands, brick and mortar. A sales positioning that's historically very one-sided, consumers being told what to love by a salesperson at a desk and brands really kind of gaining and showing their worth via who they sit, who they position themselves next to on that floor. It's all changing and you've got Amazon coming in, guns blazing, zero humility, thinking it's going to steamroll its way into the industry, but just hadn't had it yet. I thought what an interesting spot to sit at. So three weeks later.
I had absolutely gone full American and bullied myself into the seat. So I left banking and became the head of luxury beauty for Amazon UK. I did that for four years. So really saw the kind of pre pandemic, like no one really, you know, a lot of these holdout brands we would conglomerates that we would go to, Shiseido, et cetera. They would be like, no, thank you. No, thank you. To the pandemic itself where... Unfortunately, not for nice reasons, it really pushed a lot of brands onto Amazon out of necessity. And then the kind of post-Amazon phase where the customers stayed quite sticky, as did the brands. I think brands learned at that point that they needed to be strong in digital, if not digital first, and that love it or hate it from a customer perspective, Amazon is really important. And then I left Amazon two years ago to join my husband, Sebastian, who had already started our company called Invinci. And as you and I discussed earlier, it's been a really wild ride. So we are an Amazon agency. We work exclusively with beauty and personal care brands, a lot of them in the premium space. A lot of them direct to consumer brands who are backed by venture capitalists and are moving to Amazon to scale much earlier in their journey than they would have in the past for reasons we can discuss.
All the way up to we work with some of these really beautiful, you know, French heritage brands and we help them manage quite complex multi-country Amazon operations. So we do everything from media, global market expansion, we do a lot in the United States, but we're very focused on being beauty operators ourselves and working with beauty operators. And we've scaled quite quickly. I think brands were looking for a partner who understood that. And so yeah, we've grown a lot. So we've grown from two and a half people, two and a half, two and a part-time person, two years ago to now 23 people and four countries. So it's been quite a ride.
Paul: That's amazing. And so you effectively built Amazon's beauty arm in Europe from nothing, as you were saying, particularly pre-pandemic when that wasn't a way that people were buying. Like, where are we at? What's the state of the nation when you look at Amazon now?
Renee: So I think it depends a lot on geography. If you look at the penetration to the end customer of Amazon Beauty and more premium beauty offering in the United States, there is almost zero hesitancy from consumers and brands. It's very obvious to them that they need to be on the channel. It's like one out of every two purchases online in America are made on Amazon. And after Prime Day, I want to say the last October Prime Day, there was a stat that came out. I read two different stats because everyone's quick with these stats, but one said 22% and one said 32%, I want to say, of customers had a beauty item in their basket, checked out. So they bought a beauty item during Prime Day. So it's completely jumped the shark in America. So in America, you're going to have most brands on Amazon, directly on Amazon. In the UK and Europe, it's less so. It's certainly a huge platform, but it's not as ubiquitous maybe as it is in America. I feel like it lags about five or six years typically over here from an end customer perspective. And then the brands kind of follow that trend. So who's on Amazon today though? Indie brands get on Amazon quickly. Mid-tier brands get on Amazon. Typically sponsor-backed brands, so brands with VC or private equity investors. All investors of any kind expect management teams to have a strong opinion on Amazon and to have looked at it and have a strong opinion. So if the answer is no, we're not on Amazon, you need to be able to say why. And if you are on Amazon, you need to be able to explain what your strategy is and what KPIs you're looking at. The big guys that are not on Amazon yet are still some of the major beauty houses. So LVMH, no, probably as close to possible as never.
Estee Lauder also, no, no. You've got Coty and Coty Luxe, R for the most part now on Amazon. I was there when we brought on Kelvin Klein and the fragrance portfolio. Shiseido, you have more and more brands coming from their luxury portfolio onto Amazon. You've got the L'Occitane group, all on Amazon. And L'Oreal, if I haven't mentioned L'Oreal Luxe, L'Oreal Luxe is now mostly on Amazon. So you have most of the houses, but you don't have big hitters. You don't have Clinique, you don't have Mac, you don't have Charlotte Tilbury. But what I need to make really clear is that what I think these brands sometimes forget is that does not mean that those products are not for sale on Amazon. It means they're for sale, you know, by a distributor, by some guy named Gary, who's selling it from his basement in Wisconsin. Like their stuff is on Amazon. Content's bad. The prices are weird. So I do think while Amazon is a major undertaking, sometimes brands maybe fool themselves. They think, I'm not going to work with Amazon. If you're a big brand, someone's selling your stuff on Amazon and customers are seeing you there. So Amazon's having an impact on you in some way, even if you choose not to engage directly.
Paul: So let's still man the argument from the other side. So why would you not be on Amazon? Is there a good reason? Are there some brands that should not be there? I think that brands should not be there when they're too early or two premium or combination of two premium and two early. I don't think that Amazon is a cheap or easy way to build a brand. It's expensive. It's an expensive channel to manage because it's very heavily reliant on paid search like other channels. So do you have that budget? It's very difficult to staff your Amazon channel internally because it works so differently across paid search logistics and inbounding, labeling, chargebacks. It's a fully self-service system. So it's an online portal portal. And the computer says no a lot. So you end up getting inundated and totally overwhelmed by kind of day-to-day problem solving. So how is like one person on your team going to be excellent at all these things, plus get through the day-to-day weeds and still stay strategic about it. Content. So for example, we have a full in-house content team who's like ex L'Oreal, Soho house group. I mean, these are, it's not a joke anymore. So I think Amazon has become a competitive, complex, data-driven place. And so I think it's hard for brands to source a person who could do that in-house. Therefore they rely on agencies like myself who are not cheap. So I think there's just layers of Amazon costs and advertising costs and agency costs that mean there's just no easy easier, cheap way to go about it. So when brands make the decision to come to Amazon, I'm always like, okay, cool, it's too early for you. Come back, let's talk in six months, it's just not going to be worth it.
Paul: So what are those? What are those sort of indicators that you're looking at there for someone who's is it the number of headcount they've got on the marketing team? What would you say when you can tick the box on the X revenue or I've got this number of heads that are going to be dedicated to Amazon? What is that inflection point where a brand should think let's get involved?
Renee: So I think having the resource to, you know, staff or outsource it and invest in it properly is kind of like the baseline. Without that, don't even bother looking. Um, but there, I would look more towards outside signals. So Amazon is a lot of ways a demand harvester potentially more than it is a demand generator. And what I'm not saying there is that it's only a replenishment platform because it's not. There's millions of customers you're going to find there who are way down in that funnel with a high intent to purchase a problem or purchase a product, solve a problem. They're right there looking to buy something. So you can acquire customers there and you do. It's not just a platform that people buy you first, brick and mortar and come back. That said, there's lots of tools out there. There's lots of enterprise softwares that in any type of agency or even individual seller would pay for an access that can really pull back that layer and tell you, are people searching for you?
So like, do you have any organic searches or are you a niche skincare brand that thinks it's going to go up against Nivea and L'Oreal on the search term face cream? Like you'll get slaughtered. Don't ever do that. So I think you need to look at one as an indicator. Is anyone searching for you there? Do you have customers now who are saying, telling you directly, I wish I could just find you there. You know, I'm on Amazon a lot. I really enjoy shopping. I wish I could find you there. So are you hearing, are you hearing it from your community? And then the last bit would be. Yeah is somebody already selling your product there, in which time you need to go in and take over those listings. You need to register your brand with Amazon's brand registry system and you really need to make sure that you protect that channel before it gets out of control. It's very difficult to clean up once it is out of control.
Paul: What does that look like? Let's just go back to the basics in terms of Amazon. For a brand that's getting out there, are they using Amazon as just a typical retail channel or are they using this as just another form of dot com that they're still shipping out of their warehouses? And how would you advise brands to start off in that journey? Where does that journey lead you to?
Renee: Sure. So for beauty brands, it's specific. It's a little bit specific. If we remove, I guess if we remove our beauty lens and we just think from a customer perspective, I go to amazon.co.uk or any of the Amazons, it's more or less McDonald's, they're all pretty much work the same way. You're going to see products for sale. So those products are gonna be for sale, like what you said, either from Amazon. So that's going to be a traditional wholesale retail model where Amazon has purchased those products at a wholesale price with some back margins, some contra cogs agreements in there as well. So get to kind of an a landed margin, a landed net PPM. At that point, Amazon, you know, you ship. Sorry, one second. What's a net PPM? It's your net PPM. It's your pure profit margin. So it's going to be the difference between a cost price and a retail sales price, XVAT. And then they're going to net it. So Amazon's going to say, okay, you sell me these products at 40% front margin, XVAT. But guess what? I'm going to attack, rather than just send you that money at the end of the day, I'm going to net the money I send back to you. I'm going to net it for a damage allowance. I'm going to net it for an automation and personalization and an AMP, like marketing budget. I'm going to create a whole bunch of other buckets I can use to take margin from you. And then at the end of the day, you're left with this net PPM, a number you have, a number Amazon has. And that is something that when I was there as a vendor manager, you are managing closely. And if you look at Amazon's recent quarterly reports. They have been hyper focused on profitability since the pandemic when profitability sunk. And so they've been very, very aggressive and tough with vendors focused on bringing back Amazon's own net PPM up versus the vendors.
Paul: So let's look at that specifically. So I sell a $100 face cream. What does that look like with my partnership with Amazon normally?
Renee: you would, let's say that's XVAT. So let's say Amazon is going to pay you, sometimes it's even 50, like a 50% front margin. So let's say Amazon's gonna pay you 50%, but then as a percentage off of that, so not off the 100, but off of the $50, they would then deduct 10, 15% additional back margins. So then what they're doing in their payment terms to you is actually sending you not 50, they're sending you 50 minus these other percentages that they've taken. So you end up getting to a net PPM that is very similar to working with a luxury brick and mortar. I think there's a misconception that you go to Amazon and it's gonna be like cheap, quick and dirty. And it is dirty, but it's not cheap and it's not easy. It's very difficult. And on top of that you know, it's not considered in Amazon's, in your conversations with your vendor manager is your advertising budget. Because legally Amazon's advertising, their media group is a separate legal entity that doesn't even factor into that net BPM. So brands are really asked for a lot from Amazon. Um, and in exchange for that, they get access to the world's largest, you know, product search engine, and they can sell a lot of widgets on that search engine.
So there are really two sides to it. And there's a lot of brands who gain a lot of market share, acquire a lot of customers and make a lot of money on Amazon. So despite the difficulties, it's not something that brands are shying away from. In fact, in this market where it's difficult to find growth, they're coming to Amazon faster than they would be in the past, even though it's not easy.
Paul: And would you recommend that any brand just views it as just another retail channel? It's the same as Boots, it's the same as Sephora. It's another one of those. And then with that mindset, probably not be disappointed with all these other charges that are involved, or is it its own thing in a unique kind of way?
Renee: It's its own thing. And to just kind of finish the conversation too quickly, if anyone's asking or anyone's thinking about kind of stuff is for sale on that wholesale model, but then there's the other half of the retail model there, which is the marketplace. So that's the fulfilled by Amazon is the most common way to interact with Amazon.
So that is where Amazon is charging you a referral fee. It's typically, let's call it 15% for beauty products above 10 pounds. They're charging you that on the sale price. They're charging you a little bit because you're storing. They're not sending you a PO because they don't buy your stock, but you're deciding how much to send into their warehouses and then you're paying them, not a ton actually, for storage. And then you're paying them for that last mile delivery to Amazon so that you're still getting that really important prime delivery badge.
And then there are other ways to work with Amazon where you're actually fulfilling. When there's a sale, you're, you're fulfilling it from your own three PL directly to the customer. But, and there's reasons you would do that, but it's, that's more niche option. Um, so yeah, I think. Come back now to your question. Amazon is not a normal retail channel. It is an enormous billboard. It is the largest store on Oxford circus. I think brands need to come into it and they need to understand what purpose it's going to serve for them at this point in their journey in this country. We've worked with brands that were on Amazon, but they weren't doing much with it. One brand we worked with, they were preparing for a sale or they wanted to, and they had a great, very successful exit. And that founder came to us and they were like, I don't really care about, you know, like acquire, investing a lot in my brand here on Amazon right now. Really what I want is for this to be high growth profitable, like a short-term view burst of revenue for me, because if I can turn this thing on, it's gonna help me achieve an overall revenue that's gonna help unlock a different multiple for my business. And then we've got other brands that are coming in and saying, I'm happy to accept a lower return on ad spend. I wanna over invest in my digital shelf. I wanna work on cleaning up this channel. And then some will say, that's enough, total defensive play. And then others will say, And I really want to invest high in the funnel here. I want to invest in Amazon's display advertising, which is really powerful. And I want to acquire customers in this channel. So I think it, think it starts like from what is it for you, but for no brand, is it a channel like any other because it's, it's a product search engine. So customers come and research you there. So it like helps you or it hurts you. Once your product is on it by yourself or by someone else, it's not really a neutral thing for you anymore. So that's where I get a bit nervous when very large brands are not engaging directly. Just like, don't fool yourself that people are coming, trying to figure out more about your brand here. They saw something on TikTok, they saw something on Instagram, they're coming to Amazon to see like what the real reviews say and you look horrible and you're not educational, then it is hurting your brand in that setting. And I don't think you could think that about a normal retailer.
Paul: Yeah, that sounds pretty bad. It's a little bit like walking into Sephora or Boots and finding all of your products are smashed in the corner.
Renee: And it's very damaging.
Paul: 50%, 60% off the line. You're trying to sell it direct. So what would be the opposite of this? So what would you encourage brands to do if they're trying to build out a brand and like take ownership of their own brand on it? Like, so you obviously, you have like your branded pages. Do you want to talk us through how that works?
Renee: Sure. So I think. that no one comes to Amazon and thinks, what a beautiful feminine, like high brow, beauty shopping experience. Obviously no one thinks of that. But if you were to dial down into the actual product pages, as a brand, you own every area of that page. So if you are approved, if you're a manufacturer, you go to Amazon's brand registry, which you can do actually, even if you don't sell your products on Amazon. So most brands might take that as a preventative step is to register their brand with Amazon right away, just to kind of support the protections they may have in the future. It's like buying your dot com, right? It's like buying your company's website. That's a good way to put it. It's a little bit like that. And so you control your title, you control all your product images, you control your description. You below the fold have an option to do this semi new thing called a brand story, which is put on your entire catalog when you upload it.
You can talk about how you're a B Corp. You can talk about the provenance of your brand. You can bring people to your gift sets for Christmas. You can bring people to your heroes. That will link directly to your brand store. And then if you continue below the fold, there are really actually incredible tools available to you for free or included in the package where you can be putting video on your pages, pop out FAQs, these are all module based. It's called the A Plus content or premium A Plus content.
They've got a great module, I think, for, you know, skin care sense, for example, where you have the actual product detail page that you're on. You've got that on the left side. And then on the right side, you can create a carousel of your own, you know, other products in the range that are for different skin types or hair types or frequencies. And then in the middle, you've got check boxes with different attributes of those products and people can click through the carousel and the check boxes change. So you can compare two products on site. There's just a lot.
There's a lot you can do that I think is very underutilized and under-invested and under-understood. Yeah, so that's a product page. And then yes, you're going to have a brand store. That's also something that is free to create when you're working with Amazon. And the brand stores that we create and the others create in certain cases are phenomenal, very cool, super dynamic. Again, it's video.
It's gifts, it's super high definition imagery. So there's a lot more there than people realize. That's amazing. Right. So it's like your website. So in many other ways, you've got to build it bespoke for Amazon, which is annoying and has a cost involved in, but there is, I guess, other opportunities that it brings to you.
Paul: Like on the, so on the flip side of the brands that are doing really, really well, what or fully up and running on Amazon. What are the tricks that you think most brands are missing? The ones who are in there, they've done these things, they've ticked the box, they've got the various coverage, they've done the permission to play piece. But actually, what is the thing that most brands should do that they don't do?
Renee: They don't do? I think if you're going to do Amazon, you need to remove as much as possible the emotions from it and just see it as a system with numbers. And again, start from a place of strategy. So understand that if your goal is to have hockey stick growth, that's going to require over investment into your digital shelf and an over investment in Amazon. But have KPIs associated with it. So you're on that journey and you feel comfortable about what good looks like. So I think some brands come in and they haven't run their numbers. So they're when it's not as margin or creative as they thought it was going to be. So I hate, you know, before we work with brands at Invinci, we actually, what do they say? Safety rules are written in blood. So we don't work with anybody until we do an audit because we want everyone to be on the same page and see this opportunity in like the cold, you know, light of day. And part of that includes running to P&L so that a brand is very clear about what the charges of working with Amazon are.
So I think brands that are not doing it well, they didn't come from a clear point of strategy. So they kind of thought they just get on it. I think brands sometimes come to the channel a little bit entitled. They're like, it's huge. I would come onto here and put my products and there's millions of customers and people will find them. My dad years ago, and I steal this all the time, said, okay, he's like, so at this point, putting a product on Amazon is like adding a paragraph to a page in the Encyclopedia Britannica. It is just not a build it, they will come situation. It's a build it and then spend a lot of money driving traffic towards it. So forgetting what that traffic piece looks like. Um, so I think those are kind of, um, the things that brands don't think about. I think the other bit would be like forgetting that gravity exists. If you're a brand that's in decline, you're not going to come to Amazon typically and see something drastically different than what you're seeing off of Amazon, if your USP is stale or it isn't clear. If your overall content storytelling, you know, and value proposition isn't clear elsewhere, yes, we're using data tools. Yes, we're taking what you have and we're transforming it into what's best for converting on Amazon. But like at the end of the day, it's not magic.
Paul: So I think that can be really hard. Why bother, right? So if people aren't gonna stumble across me, put myself out there and I need to spend a lot of money pointing people towards that so they can buy. Why would I not spend all of that money on performance, sending them to my dot com where I get 100% of the margin? If that's the point of it, why do brands do it?
Renee: Brands do it because, although I mean, brands this day and age are dumping millions of VC dollars into their DDCs and have nothing to show for it. Terrible negative unit economics, not even flat or low margin. And they're just unable to cut through, they're unable to really connect in any sustainable way at a scale so much larger than any of these DDCs that the opportunity there for you is enormous. And if you think about return on ad spend, because you are not catching people on Amazon for clicks like you are if they're on Instagram and their head could be wherever and you're serving them an ad who knows where they're at. You're catching them on Amazon where they're trying to buy something. They're researching something, trying to buy something and you're hitting them right there at a product level. So I was thinking about Amazon, it's branded product. You have to win product by product. It's not like Kumbaya, Brandville. It is a product search engine. Um, and so your return on ad spend is typically much higher on Amazon than it is in typical performance marketing. Um, even if you're a brand no one's heard of after a few months, you're going to have a return like a ROAS of, you know, two X above three X. Uh, the way that we do advertising is we at the highest level divide all our paid search campaigns by offensive, which is unbranded keywords and defensive, which is branded keywords. For a brand with some type of brand awareness, if you ROAS, you can achieve on branded keywords could be 20, 30, 40 X and then offensive, you want to be hitting like a two, so you can toggle between those buckets to achieve within your overall strategic goals, a pretty decent ROAS that's much higher than you can elsewhere. So Amazon may not be margin creative, depending on what the rest of your distribution looks like. But you're going to make money. Whereas DTC, I don't know if you can always say that.
Paul: Well, I mean, I guess if you guys are delivering a 3X or if Amazon is delivering a 3X ROAS, that would be the same as you, the brand would walk away with the same as a 1.5X on their dot com because of the margin that they're putting away there. So do you often do you think it's all part of the mix? And people like do you advise people to be considering it in the same light? Or is there a halo effect that happens with Amazon that isn't really catered into?
Renee: Yeah, there is a halo effect. And there are more tools now, like for example, one called Amazon Marketing Cloud, since Amazon's built up this great AWS business. So there are more tools now that allow a brand to kind of map out attribution across the internet a very strong British brand that we still work with today and that we worked with when I was at Amazon. They were absolutely flabbergasted. I remember it was while I was at Amazon, so several years ago, and they were a huge partner for Amazon. And they were like, Amazon Prime Day is your day. We're gonna give you not just great deals, we're also gonna spend a bunch of money. We're gonna get all our influencers to drive traffic to you today. Today's your day. And they didn't run any promotion on their own DTC. They had one of the best sales, highest traffic days, like a totally out of market on this random day in July on their DTC. So I think that there are just, there is segmentation within your customer base. Um, I always say it was like Jack Ma in his book, he talked about Swiss cheese. And when you're small, you can be nimble. You can be jumping through this, you know, block of Swiss cheese. And the Swiss cheese is Amazon. I encourage brands to, you have this like omni-channel strategic for you, understand the role of Amazon for them. And then lean into that. So that means lean into the scale, lean into advertising based on Amazon's first party data, which is super powerful. Lean into convenience. So participate in subscribe and save programs. Um, lean into the deal calendar, not an outlandish deal calendar, but don't come to me asking for X percent growth and then tell me like, you're not going to give Amazon a deal on Black Friday. Again, gravity exists on Amazon as well. So be ready to play. Um, if you're going to bother participating. And then on your own D2C site, have great storytelling, do things that Amazon can't like sampling, do exclusives, reward your customers with access with something really interesting there, surprise and delight, have beautiful unboxing experiences, make it something different because Amazon's not good at everything, obviously. So on your own D2C, be excellent at those things. And then for Amazon, for the stuff that it's winning at just let it win and support the flywheel.
Paul: That makes a lot of sense. Okay, cool. So we've done it, we've understood what people aren't doing so well. What are brands doing that's, that's really killing at the moment. And specifically, I'd love to know which brands you think are killing it. Yes. So I think the brands that are killing it are understanding Amazon's very specific digital shelf and the competition there, you know, it's a bizarre place where if you're a hundred pound face cream, you're still going to be up against like drugstore six pound face creams. And that's because the customers search at the top of the bar. So it's like 80, 86% of customers. They're not, they're not like dropping down into browse nodes to be like, I only want premium. They don't care. So like forget what you, what you care about, just be customer obsessed. And so be prepared to be in the same list of search results as non-premium options who are making similar claims to you. So whether it's Retinol, Vitamin C, it's the wild, wild west on Amazon. So as a premium brand in particular, your content needs to not just tell people why you're great and tell people who you are, it needs to show people who you are. So I think also to overcome this idea that it could be inauthentic. You really want to be there showing your best foot. So I would say over invest in your content, make it super premium, high-end, tailored for the channel, A-B test, you know, play around with it. Use all of, use the brand story, get yourself on premium A plus. You need to really, you know, hit people over the head with the idea that, yeah, I'm not the 10 pound option, I'm the 100 pound option, but we're really something special and this is it. So get people to buy into that.
So I think over-investing that digital shell, like I said, participating in the main events. If you don't participate in those events, on Amazon, because it's algorithmic, they always talk about the flywheel. There's Jeff Bezos flywheel, which is a broader perspective, but as a brand, your flywheel is going to be continuing to invest in activities that push up your organic search results. And deals is one of those. So when you don't participate in a prime day, you don't participate in Black Friday, a really obvious tier one deal event, others will. So you will actually hurt yourself that day. It's not, again, it's not neutral. Um, so it's brands that are coming and they're kind of playing the game. Again, doing subscribe and save, um, kind of understanding what the core leavers are and participating in them. And then investing appropriately on advertising. I'm not saying that means invest 20% of your sales back into advertising, even if it's 10, but do it the right way. And then the final bit would be, brands don't like to do this, but it's a traffic game, so is there a world in which you can dedicate 20% share of voice on your socials or your influencer budget to direct to Amazon and really integrate Amazon into your overall marketing calendar? So your creatives and taglines match up. Um, but also Amazon's not like the, you know, like the Cinderella stepsister. It's actually like a full blown member of this family and you're giving it that level of like respect and, and detention. Um, and then I also have to say there's a real practicality about this brands with more brand awareness is a much easier for them to do well on Amazon. Um, so you asked for a specific example.
There's Laneige, as we figured out how to pronounce this gorgeous brand. Uh, they, it's really interesting as a, as a case study. So there may be a medium sized brand. I mean, they obviously do lots of sales, but they're, I believe, independence, um, it could be wrong, but they're, they're not like a household name. Okay. They on amazon.com are doing the most beautiful job. If you, if you search in that brand. Look at the advertising that pops up. It's video, it's dynamic, it is super high definition. It's clearly been created just for this channel. Their content is gorgeous. They have one overnight lip mask, so a single product on amazon.com that does $27 million a year. So like the prize is there for you to win. So that's a brand where it's clear to me that they are, they're doing it very well and they're not Clinique, they're not Mac, they're not a household name. They're obviously coming into this with some branded searches, but they've gone in and they've picked kind of a niche category like lip, overnight lip mask, this type of thing. And they've absolutely dominated.
Paul: Wow, amazing. You mentioned there about like the, about the brands actually trying to get some of the other campaigns to drive up the traffic they've got. I mean, this pod is all about advocacy and social commerce. With Amazon, and if you're doing like an influencer campaign, for example, or even just trying to get referrals, the affiliate links generally will have to be the brand or have an entire affiliate system. Is it possible for them to integrate that whole thing into the Amazon ecosystem?
Renee: So Amazon has its own affiliate network. So influencers themselves can become, you know, Amazon affiliate. I think when I was like pretending to be a blogger for two seconds, I had an Amazon affiliates. I think I made 12 pounds once. It's like my entire time as an influencer. I was very proud. So they are going to themselves register. And when they're posting, it's the typical, it's being tracked back to them. They get paid. Brands themselves can actually be influencers on Amazon. So a brand could do that, get like the tag, the code and provide it to their influencers. And they could see it that way. Most influencers are, well, you would know better than me, but...
A lot of influencers are Amazon influencers because it's a fairly attractive affiliate system. It's going to have different percentages based on categories and I don't know what they are offhand. Let's pretend it's something like 8% for beauty, but 3% for like TVs. What's really crazy about Amazon's influencer or affiliate program is if I'm on Instagram because I'm old, so I'm not on TikTok. And I was doing like a live and I directed people to Amazon for this Laneige overnight lip mask. But somebody also added like a flat screen TV to their basket. I would at those different rates actually get commission on like the whole basket for whatever the attribution window is. So affiliates are making a serious amount of money, you know, playing with Amazon as our brands. Brands will then get money back. Over here.
Like it's not something, it's obviously something that's done. Louise Rowe, I know she's got her own store as an influencer, you can create an Amazon store. In America, it is enormous. Like Chris Jenner's on stage at the Amazon influencer conferences. I think they sponsor, I think Amazon sponsored Chloe Kardashian's last baby shower. o So it's totally jumped the shark over there and eventually it will here as well.
Paul: It's like you've got an insight into my Amazon basket, overnight lip gloss and a TV. That's the most obvious combination right there. Oh, amazing. Right. Well, I mean, this is, this is fascinating. I think it's something which is, I mean, it feels like it's becoming more and more important or it's becoming more and more like table stakes. Like what does the future hold for brands, specifically beauty on Amazon over the next couple of years?
Renee: Yeah. I think it. Although it feels so enormous already, I do think that beauty, especially premium beauty, is probably still an add to basket proposition. Customers aren't on Amazon doing something else and then they're like, oh, I'm going to look over here. I read this thing while I'm here, I'm going to do this. That's actually something that's called out. When Oscar de la Renta came to Amazon via their luxury stores model, that's what he said. I'm kidding myself if there's not 90% overlap between an Amazon Prime customer and my customer. And frankly, my customers spend a lot of time on Amazon. So I want more of her wallet, but I also want more of her mind share and being on Amazon is going to do that. So I think that Amazon is very serious about beauty because if you look at their whole retail operation, it's nearly a loss leader for like advertising and then the cloud. Advertising is where Amazon makes money. If you look at premium beauty, it's as we all know, it's an ideal e-commerce product and it's ideal for Amazon. It's a category that they actually make money on. Um, so they're investing heavily and look to the United States to see what they're doing first, you know, the, my former boss, she's on stage at the WWD, the CEO conference, a women's conference. Like it's, they're all over everything. They just awarded Gwyneth Paltrow, Goop, uh, some type of Amazon award. It's like they're really pushing into these circles that they weren't allowed into. As that happens, customer awareness is gonna follow. Right now, actually a very small percentage of Amazon Prime customers are shopping premium beauty on Amazon. So Amazon does not need to like go out and find new Prime customers to quadruple and sell on its premium beauty business. It just needs to penetrate deeper into the customers that already has and it's doing everything within its power to do that. So it's such an enormous like the absolute volume of customers. I mean, it's millions and millions and millions. Like when you compare it to the D2C and like the scale of Amazon and its customer base is just so massive that if we were to say, okay, let's say the penetration right now of prime customers in the UK as premium beauty shoppers within the past 12 months is 2%. I'm making that up. If they just took it to 3%, that's worth hundreds of millions of dollars. So I think that we're just getting started. I think as Amazon starts to, the real growth for Amazon is going to become, as it starts to become more of an obvious beauty destination for the end customer.
Paul: Amazing. Renee, this has been fascinating. How can people get in touch with you and learn a bit more?
Renee: Sure. They probably on LinkedIn or via our website, but it's Invinci, I-N-V-I-N-C-I.io or on LinkedIn or Instagram. I'm on all these, all these places. Apart from TikTok. Definitely not on TikTok. No, I'm the old person who watches TikTok videos on Instagram, obviously.
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