To meet customers where they want to shop, more brands should invest in providing a seamless shopping experience that drives directly to their own website. But the impact of this evolution in shopper preference doesn’t begin and end with merchant brands. Publishers with affiliate programmes should also adapt their strategy to align with these shifting shopper priorities – especially in light of Amazon’s recent cuts to commission rates.
Direct-to-Consumer is becoming a bigger priority for consumers – and for brands
Let’s step back a bit. Consumers were already beginning to express a preference for buying directly from brands prior to the COVID-19 crisis. As of early 2020, two out of every five Americans had made a purchase directly from a brand or manufacturer, bypassing middlemen like Amazon and Walmart. But the pandemic has made supporting local businesses an increased focus for consumers, further accelerating this direct-to-consumer (DTC) trend. And eMarketer predicts that by 2022, the number of DTC e-commerce customers will hit an all-time high of 103 million.
According to Shopify Plus, “Brands selling direct to consumer entered the global pandemic in a position of strength, while legacy wholesalers and offline brick-and-mortar businesses made rapid shifts to begin selling direct for the first time.” They elaborate in their Direct-to-Consumer Guide, “Strategic pivots have emerged in verticals that had never before sold direct. Heinz, established in 1869, launched its first ever DTC initiative in seven days. And Lindt, a Swiss chocolate company since 1845, launched in just five.”
To cultivate trust with consumers, publishers should provide a seamless customer experience
For publishers with affiliate programmes, it’s important to consider the full customer experience – not just the experience on your own website. By reviewing and recommending products to readers, you are cultivating consumer trust. And the reliability of your recommendations is just one factor that influences shopper perception of how trustworthy your content is. The quality of the product page you link out to is crucial too.
Make sure that when you link out to recommended products, you are providing shoppers with a seamless experience that takes them where they want to go – so they will be more inclined to follow through and make a purchase. Increasingly, this will mean driving them directly to the merchant brand’s e-commerce website, where they will be able to learn more about the product and feel a stronger connection to the brand.
Stay in control of your commissions by building partnerships directly with brands
With Amazon’s recent cuts to commission rates, publishers with affiliate programmes now have an even stronger incentive to drive referrals directly to merchant brands.
CNBC reported of the commission cuts, “Rates are being cut [by Amazon] for a number of affiliate product categories. For example, the affiliate cut from purchases of furniture and home improvement products has fallen from 8% to 3%, while the commission rate for grocery products has slid from 5% to 1%.”
These cuts are a problem for all publishers that rely on referral commissions as part of their revenue. But for some publishers, this change could actually pose an existential threat. In the same report, CNBC stated, “One member of [Amazon’s] programme, who asked to remain anonymous, said they ‘cannot afford’ the fee cuts that were announced, since a main portion of their income comes from commissions earned via Amazon links.”
Fortunately, there’s a solution for publishers: instead of big-box retailers, partner directly with brands for referral commissions. Many brands have their own affiliate programmes, and many more are beginning to explore them as an option for their evolving marketing strategy.
The timing has never been better for publishers to connect with merchant brands and establish commission rates that work well for both the publisher and the brand.
As Tobi Lütke, CEO of Shopify, has stated, “Nice-to-have business capabilities are now must-haves. The pandemic has brought 2030 to 2020, with a rapid acceleration of consumer buying behavior and online retail trends. We’re seeing the world’s largest and most storied brands abandon legacy platforms. They’re launching DTC initiatives fast, and slashing costs at the same time.”
By partnering directly with brands, and working with a good affiliate marketing platform that facilitates those direct relationships with merchant brands – and that provides reliable first-party tracking, and automatic commission payouts – publishers will be set up for success in the post-pandemic world and beyond.