More than ever, e-commerce marketplaces like Amazon and Walmart have come to represent an alluring opportunity for brands (of all sizes) to expand sales and attract new consumers. In beauty, brands sold in Sephora and other luxury retailers are pushing past previous reluctant behaviors, taking control of their presence on Amazon and becoming more accessible to a larger audience.
According to Dana Upshaw, Chief Growth Officer at Recom, a prominent strategic brand accelerator for marketplaces like Amazon, the opportunity for beauty brands to grow on these marketplaces is huge. In 2023, she said, revenue for prestige beauty brands on Amazon grew by more than 44 percent totaling more than $3.4 billion.
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Upshaw told Fairchild Studio that this opportunity to supercharge e-commerce sales is “too big to ignore.”
Still, as more brands jump on the opportunity, it’s becoming increasingly difficult to cut through the noise in the crowded space. Upshaw pointed out that there are several key factors to maintain growth. For instance, she said, brands that take an active approach in managing their Amazon presence see a staggering 11.4 percent higher growth rate.
Having worked with brands of all sizes, both legacy and new to market, Upshaw believes firmly that today “every brand needs an Amazon strategy.” Here, she speaks to Fairchild Studio about standing out in the key e-commerce marketplaces, creating a bespoke experience for brands and debunking misunderstandings about the space today.
Fairchild Studio: Why is it so vital for brands to work with companies like Recom to manage their Amazon profiles?
Dana Upshaw: Success on Amazon is contingent upon several key factors unique in the retail space. You need a deep understanding of the marketplaces’ foundational technologies, consumer behaviors and brand visibility optimization tools — not to mention the data analysis, marketing and creative expertise to forecast trends, protect brands and create appealing marketing content.
Recom brings all that expertise to the table right out of the gate, helping brands identify the best way to manage their brand and drive growth.
Fairchild Studio: When should a company consider bringing on Recom as a partner?
D.U.: Brands should consider partnering with Recom at any stage of their growth strategy. Whether they want to control their unmanaged brand, overcome growth challenges, or conquer the ever-changing complexities of marketplaces like Amazon, Recom’s expertise is invaluable. We have worked with companies across multiple verticals, each with their own goals, standards for brand control, and growth expectations. But while every circumstance is different, the challenges are similar: keeping up with the ever-changing and endlessly complex Amazon ecosystem. That’s what Recom is here to accomplish — we guide brands through the Amazon maze with a bespoke plan designed to match their needs.
Recom builds solutions tailored to a company’s goals. If their brand is not being managed on Amazon, there are likely pricing and content inconsistencies causing unfavorable consumer experiences. Likewise, companies managing their brands may not have the staff and resources that Recom provides to manage all the key servicing components that maximize growth.
Every brand’s situation is different, but there is one constant: They are all looking for growth, and a robust e-commerce strategy is essential. This is based on multiple years of surveying select participants across the U.S. and regardless of age, gender and income. When asked if they prefer to buy on Amazon or a Direct to Consumer (DTC) site, more than 85 percent prefer to buy on Amazon. And if they aren’t purchasing, more than 80 percent of those consumers prefer to research products on Amazon. Based on this, it is critical that brands tap into consumers’ existing habits and favored marketplaces.
Fairchild Studio: What is Recom’s key differentiator from other accelerators?
D.U.: If there’s one quality that sets Recom apart from other accelerators, it’s our flexibility. We don’t force brands into a preconfigured model or make them do business our way. We work with each company to develop solutions according to their overarching strategy, priorities and needs. If brands wish to sell inventory directly to us to mitigate the complicated e-commerce tax liability requirements, they can do that. If they wish to maintain ownership of their products, collect top-line revenue and sell under their brand while using Recom’s experts as an extension of their internal team, they can do that, too. Our full suite of services is the same regardless. I don’t know of another accelerator that provides brands an option to recognize top-line revenue and benefit from increased profits while having a full suite of managed services to support their Amazon business.
Fairchild Studio: How does Recom work with brands to create a custom experience?
D.U.: To put it simply, we work with each brand to build a strategy for growth. We are experts on Amazon and leverage that expertise across multiple services to deliver results. Our end-to-end solution includes all key success attributes on Amazon, from creative to marketing, logistics planning to brand control, and finally the data that supports the success measurements on Amazon.
Fairchild Studio: Why do you think that some brands are still reluctant to begin selling on Amazon?
D.U.: Premium brands have historically viewed Amazon and other marketplaces as secondary buying platforms and have focused their efforts on distribution through luxury retail stores and their direct-to-consumer site. But Amazon has proven that any brand-building strategy needs to factor in its ongoing innovations that drive best-in-class consumer experiences. As such, we see more brands embrace Amazon and allocate time, attention and resources to building out a brand strategy including Amazon.
Some of the largest and most successful premium beauty brands in the world have embraced Amazon, including L’Oréal and Estée Lauder whose brands joined Amazon’s Premium Beauty program in the last two years. I expect this trend will continue as more brands recognize the power of Amazon.
Fairchild Studio: Looking ahead, how do you see e-commerce marketplaces continuing to evolve?
D.U.: This is an exciting time to be working in the retail world, a time when global marketplaces and new growth opportunities are just a few clicks away. The industry leaders of tomorrow are strategizing and optimizing their operations for the e-commerce opportunities of today, and we at Recom couldn’t be more excited. This is our passion, and it’s a thrilling time to be working in a space with such growth and innovation potential. For any brand teams that may be worried about the opportunity cost of delay in e-commerce, our experts are more than happy to review their goals and share our excitement with them.
Over the next few years, we anticipate e-commerce marketplaces like Amazon and Walmart to undergo significant transformations. We’re expecting a surge in personalized shopping experiences and seamless omnichannel integration. Advanced logistics will ensure faster delivery, and the use of AR, VR and AI will enhance the customer experience. Additionally, these platforms will continue to support third-party sellers, grow their subscription services and navigate regulatory and competitive challenges.
We also see a significant evolution in the presence of luxury beauty and fashion brands on these platforms. Enhanced digital storefronts and exclusive partnerships will create premium online shopping experiences, while maintaining the prestige and allure of these high-end brands. The future of e-commerce is dynamic, with Amazon leading the charge in innovation and customer experience.