Expo West is a lot like going to Disneyland — so much to see and do. And, if you go without a game plan, it’s easy to get lost in the crowd, lost in the general buzz, or lost in general. Every year, our team collectively agrees that the show has grown and gotten more impressive. This year’s edition amassed over 8,000 booths and 80,000 people, leaving us with the same feeling.
Based on our four days of walking, talking, and listening, we wanted to take a moment to reflect on this year’s show and analyze some of the key themes that emerged.
The Big Picture
Amazon is growing fast and everybody knows — and feels — it. Their North American retail revenue in Q4 of 2017 grew 42%, compared to 35% in the previous quarter. This increase is well beyond the US market’s overall e-commerce growth — an estimated 16%.
This growth is forcing brands to reevaluate their partnerships. What we’re seeing on the ground floor is a referendum on organizational strategy: the breaking of traditional retail modes that are needing to change as buying habits adapt to technology.
Getting into position to manage, engage, and impact customer experience takes constant effort against the natural gravity of online marketplaces, which can pull brands toward fragmentation and loss of control if they don’t have teams dedicated to managing the flow of products.
A Shift in Relationships
As e-commerce plays a bigger role in organizational health, it’s increasingly more important for brands to equip themselves with the right partners. To inform strategy, brands are reevaluating relationships, whether it’s on the manufacturing side or the retailing side, dedicating resources to areas where the value is transparent and the return is tangible. It’s interesting how no two conversations are exactly alike, but they all seem to have overlapping questions.
The Netrush team with brand partner Enzymedica
Brand control continued to be a talking point at Expo West this year. A platform like Amazon provides a good X-ray into a brand’s processes and organizational health. Variations in price, the number of sellers offering a single product, and the accuracy of the content and imagery all speak to the level of control a brand has on the platform. In many cases, brands are asking what they need to do to get to a good point on Amazon.
My answer: start with control. If you know who you’re shipping to and where they’re selling, everything in e-commerce is going to be easier.
This ties back into the big picture conversation. For a long time, sales professionals would just look at spreadsheets, see numbers and orders, and only focus on sales growth. Now brands are combing those same spreadsheets and asking, “Who is this person and why am I sending them $10K worth of product every month?”
If you can’t answer that question, chances are it’s ending up on an e-commerce platform somewhere. In many cases, this will dilute the countless dollars you’re spending on marketing — which may very well be going straight out the door as discounted products on Amazon.
A fragmented approach to e-commerce is a losing one. Netrush CEO Brian Gonsalves said it best in an article at the end of last year:
“A siloed approach to e-commerce will take you backwards. The biggest challenge for brands is creating a cohesive team structure where marketing, content, retail, and IT work together across channels, including Amazon.
Ultimately, what you learn from Amazon should be applied to your other e-commerce channels, which could also help with brick-and-mortar locations — which play a big role by providing customers with an opportunity to see and touch products, and to speak with someone in person.”
Organizing for E-commerce
Alongside reevaluating partnerships, there’s a big shift in how brands are assembling their internal teams to handle e-commerce. In the past, the segmentation of channels was mirrored in the roles that people across the organization played. For example, a sales manager would be focused on growth and numbers and wouldn’t get too close to the people and processes driving the supply chain.
All of this is changing. Every decision now has the power to impact every channel. People are being forced to know what’s happening across their organization. The channels are blurring. What someone is doing at Costco, Sprouts, or Amazon often impacts more than the individual channel team.
Earlier this year, we spoke about the rise of private-label products. The volume and quality of in-demand products (bars, supplements, etc.) entering the market is encouraging brands to commit to their products and lead with the things that separate them from the competition.
With this in mind, we’re seeing brands take a bigger interest in becoming the grand narrators of their own Big Story by celebrating their awards, highlighting their celebrity influencers, and putting the spotlight on their points of innovation in packaging, ingredients, or manufacturing. This also follows a consumer trend in which people are following more personalized diets and a stricter code of ethics based on their values. Veganism, for example, has seen a 500% increase over the last five years, resulting in a greater selection of “pure” products that align with their lifestyle.
To focus back on the first point, we’re also seeing brands in the natural products category using data to respond to customer demand and manufacture goods with speed. All the latest buzz ingredients — probiotics, turmeric, etc. — were infused in bars, drinks, cocktails, and snacks, catering to an active demand.
A Celebration of Our Brand Partners
Like the show itself, our own experience at Expo West grows and evolves with every visit. Arguably, the most exciting takeaway has been the progression and success of our partnerships.
To hang out with the individuals behind our brands and watch them shine on such a crowded stage is a highly rewarding experience. Expo provides a refreshing change of scenery and a great place to take a step back from the day-to-day, celebrate our wins together, and connect over way too many samples. From our perspective, it’s amazing to witness the magic of each brand impacting thousands of people in real-time.
On behalf of our entire team, we’d like to thank Alaffia, MegaFood, Natural Factors, Enzymedica, Host Defense, Redd Remedies, Reserveage, Tomorrow’s Nutrition, Sunwarrior, Rainbow Light, DoMatcha, Optimox, and Manuka Health for another great year.
There you have it. Our key thoughts and takeaways from four amazing days in Southern California. If you haven’t already done so, you owe it to yourself to check out the #ExpoWest feed and subscribe to NewHope for active updates.