Uncharted Territory: Amazon and COVID-19 (feat. Kiri Masters)

Mar 20, 2020

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Phillip and Brian sit down with Kiri Masters to talk about how the ongoing Covid-19 pandemic is affecting the world of DTC.

Main Takeaways:

Kiri Masters, the Founder of Bobsled Marketing and author of Amazon for CMOs, joins Briand and Phillp in this week's episode.
How is eCommerce being affected by Amazon restrictions on nonessential products?
The world has entered an unprecedented period of social distancing, and brands are dealing with this in different ways.
Brands are stepping up in comforting and creative ways to protect their customers and boost morale during these trying times.

Growth Amongst the Chaos: The Steadfast Power of Amazon:

Phillip has some fascinating insights by watching booming categories amongst the brands that he manages through Something Digital.
Seemingly every day, there are new records for brands in the Health & Wellness space.
Kiri sees significant performance in Health & Personal Care, CPG and Grocery, Beauty, and specific areas of apparel.
Aside from a decrease in non-critical purchases, Amazon is not going anywhere anytime soon, even amidst a pandemic.

Guaranteeing the Essentials: Dealing with Emergency Prioritization:

There's an interesting dichotomy between the increase in online shopping and a wariness to spend money due to wavering job security.
There is a restriction on items in nonessential categories that is stopping companies centered in these categories from shipping their goods into Amazon.
Essential categories include Pet, Baby, Food, Industrial & Scientific, and Health & Personal care.
Some brands cannot get their product shipments out to carriers and are being blocked by the Amazon restrictions.
To keep up with demand, Amazon is reportedly adding 100,000 jobs to deal with a surge in online shopping.

The Illusion of Choice: What's Actually There?:

Brian has noticed that there has never been a period with fewer options on Amazon than right now.
Amazon pain points traditionally felt by larger brands are proving themselves to be precisely what keeps the system working and full of inventory in times like this.
Would an Amazon version of Uber surge-pricing have prevented some of the hoarding that has happened around the world?
As the supply chain has been massively impacted as a result of the Covid-19 pandemic, brands have had to choose between maintaining prices and selling out of product or raising prices to ensure supply over the next three months,

The Truth of Price Gouging: Not All is Black or White:

When it's in the consumer's favor, everyone is on board with price discounts to move excess product, but should the opposite also be true?
We need to hold brands and Amazon accountable if there is legitimate price gouging happening; still, we can't forget that businesses need to make adjustments to stay in business and keep employing their staff.
In the not so distant future when price elasticity becomes widely available due to technology advances in brick and mortar locations, we will be able to meet the demand for products in times of emergency.
While price elasticity is present in some things (like gas), we are not used to seeing the influx of price when it comes to basic needs.

The Next Few Days: Predictions for the Very Near Future:

Kiri predicts that if you are in a category that Amazon has deemed nonessential, then every minute of the Amazon restriction counts towards the longevity of your business.
"If you are in an essential category, this is the time to evaluate each channel, think about where the demand is coming from, and analyze the supply chains that get your product into each of those channels."
You also need to decide what course of action to take to keep the lights on for your business, and this choice might be a difficult one.
What are some steps you can take right now to protect the longevity of your business?

A Call for Unity: The Rose Garden:

Recently, President Trump invited the CEOs of major retailers to showcase a plan on how the government was partnering with the private sector to combat the virus.
Essentially, large retailers are guaranteeing not only essentials will be stocked within brick and mortar locations across the nation, but that these locations would also be locations for other virus-related services.
Jeff Bezos was interestingly absent from this panel.
There is a tremendous amount of power in brick and mortar in moments like this, and even Amazon cannot provide essentials at scale when compared to brick and mortar in times of crisis.

Looking Locally: The Effects on Communities:

Local establishments such as bars, salons, and restaurants, are shut down across the globe, not all of these businesses may survive this period of quarantine.
How will our communities be affected by the virus once the initial panic and quarantine have passed?
Brands need to consider how they will support their local communities post-pandemic
Will new work-from-home policies and adjusted methods of social interactions prove to be beneficial for our society?
Brian published an article for Insiders this week that talks about the opportunity for DTC brands in small towns, and why it's important to support local businesses now more than ever.
We are at peak distraction levels currently regarding the abrupt changes to our lives, but things will calm down, and we will get into the grooves of this new way of life.

Keeping It Positives: Brands That Are Doing Things Right:

Phillip asks Kiri if she has had any recent experiences with brands that have not been tapping into the zeitgeist of the virus and are doing notable things.
Kiri is currently in Colombia in South America and recently received an email from the CEO of Rappi (a grocery delivery service) that detailed the logistical changes that have occurred since the virus began its spread.
This explanation of what the company is doing to ensure safety from the CEO of the company was comforting for Kiri.
Something brands should consider, is reaching out to their active customer base to show what you are doing to protect them and to manage expectations within the virus climate.
To help people escape the self-quarantine madness: Sexual Wellness company Unbound Babes created an epic collaborative and self-regulating Google Sheet of references, activities, and content for people to reference during these times of social distancing.

Brands Mentioned in this Episode:

As always: We want to hear what our listeners think! What are some actions you can take right now to protect your brand during these uncertain times?

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