What the Peloton and Amazon announcement will mean for the wider retail industry

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This article is brought to you by Retail Technology Review: What the Peloton and Amazon announcement will mean for the wider retail industry.

By Brad Houldsworth, head of product, Remarkable Commerce. 

Peloton has announced a new growth strategy with the goal of broadening the company’s customer base and winning back investor confidence after the highs of the pandemic. 

Amazon appears to have given Peloton insights into its search data, which has incentivised the move, as the announcement reads: “there are already around half a million searches on Amazon for Peloton products each month, despite having zero presence on the site.” 

We may begin to see Amazon actively outreaching to larger brands who are not selling on Amazon, to give them the data needed to sell the strategy internally. 

Unfortunately, I think this will further push retailers with a lower average order value (AOV) into believing Amazon and marketplace channels are only profitable when you sell higher-priced products, such as Peloton’s. 

There is a perception among retailers that marketplace activities are not profitable, and do not add enough value to their digital proposition. This is not true, as gaining new customers gives retailers the opportunity to build the retention of them. 

Brands need to also understand the power of using Amazon as a distribution channel to gain brand awareness among consumers. Once a customer finds you on Amazon and experiences your products, you may be able to migrate them directly to your direct-to-consumer (DTC) shop. Advertising on Amazon is much cheaper than advertising costs in the DTC world, such as Facebook. Therefore, new customer acquisition can also increase when expanding onto marketplaces.

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