How dietary supplement brands can find success on Amazon

Sebastian Krawiec: So, Amazon has been changing the way people shop for some time now, but how has it changed the supplement consumer and how people shop for supplements?

Jake Klinghammer: Yeah, so in our latest study on supplement consumers. We always ask about channel, like what channels are you buying from, and that could be everything from brick-and-mortar retail to online. Then we do get into the nitty-gritty. It’s not just Walmart, but it's walmart.com. And so it's not just Target, it's target.com. With Amazon, we have found that over a third of supplement consumers in the country have bought a supplement on Amazon in the past year. Well, now the question is why?

One of the biggest things that we're finding is the very first thing is price comparison. It's not like a Target, or a Walmart or even a Costco where you might have a handful of products that are maybe like mid-to-lower tier price range. You have hundreds and hundreds of products that you're able to do price comparisons right there on the same page and the platform and do those really kind of side-by-side comparisons where you can see, you know, price per ounce, price per dosage, et cetera, et cetera. So, we're seeing just that price comparison shopping happening. We're also seeing that Amazon supplement shoppers tend to be a little bit more price sensitive than those who are buying traditional brick and mortar or a direct-to-consumer website, which is of course still e-commerce, but it's very targeted and curated. Other big things that we're seeing is Amazon supplement consumers are placing a lot more emphasis on ratings and reviews. There's also that element of, hey, ‘Amazon ratings and reviews are from real consumers. It's not a curated list. There's no back end.’ And of course, when you are shopping brick and mortar, the information that you have on the product is what is right there in front of you on the shelf. Amazon allows you to go deeper. It allows for extra validation through consumers who have bought the supplement before.

SK: I guess that is the main point I guess I'm trying to understand is like how do they verify quality? Is that the main way they verify quality is through the reviews or do they also do any other research outside of that?

JK: It is a big component of Amazon shoppers in particular because of the platform, but it's not the only element. We're also finding these consumers are looking for branded ingredients because branded ingredients tend to be an indicator of quality, especially when they're able to do, and these are for the consumers that definitely want to go in and do their research, not just the branded ingredient, but now let me go to that branded ingredient's website now and let me go look at any sort of clinical studies and research that have been published on the branded ingredient itself. Those are the consumers that are going to be doing another level deeper of insights and analysis. When we're looking at Amazon consumers especially, we are finding that they do tend to over-index for wanting the extra resources when it comes to making their purchase decision before they start to invest in a very specific product.

SK: Interesting. Are they willing to invest more if the quality is there?

JK: If the quality is there. What we're also finding is that Amazon supplement consumers are looking for supplements that are very highly tailored to their specific needs and their specific lifestyles. I mean, there are hundreds and thousands of supplements on the platform. That's not going away. So, brands that maybe are trying to enter the marketplace need to have a very distinct value proposition that is for a very small slice of the consumer segment, and just know that consumer segment will find your brand. Brands lose, especially young startup brands, I think that they're going to launch on Amazon when they try to be everything to everyone, because ultimately they end up being nothing to no one. But if you do have a supplement or a brand that is tailored in such a way that you understand the exact need states, the exact benefits that it offers, format, and then, frankly, all the way down to packaging design, because we shop with our eyes first, and an attractive label is something that you're going to be drawn to.

SK: So what do brands need to do to find success on Amazon?

JK: Along with knowing your audience, one of the biggest things that we're finding is label and packaging design. If you're going to take an Amazon-first approach, especially, you need to be able to design packaging in such a way that meets the needs of a digital shelf. You don't have retail space. People aren't able to hold the product and look at it. And you're also competing with all of these other brands. And the image, the first image that somebody will see of your product is a thumbnail. It's tiny. So, are you able to show your brand name, the benefits, and if there are any key ingredients, those have to come to the forefront. There are no sleek, minimalistic brands that can launch on Amazon and be successful. They need to be able to put their value proposition first and foremost and designed in such a way that you can see it when it is at such a small thumbnail size.