Profitero Blog
A Q&A with former Amazon executive Melissa Burdick of the Mars Agency

Keith Anderson recently interviewed Melissa Burdick, vice president of e-commerce at the Mars Agency, where she helps consumer packaged goods companies understand how to grow profitably on Amazon. Melissa spent over a decade working at Amazon—and in this interview (as part of our new Profitero Podcast Series), she discusses how the CPG industry has evolved in its e-commerce capability over the past few years, the operational challenges CPG companies face in embracing the online channel, as well as how brands can keep pace with Amazon’s continually emerging formats.

Q: Hi Melissa, just to start, why don’t you tell us a little bit about who you are, what you’ve done, and what you’re up to now?

Sure. I’m Melissa Burdick. I started at Amazon in 2005. I was part of the initial team that launched the consumables business. At that time, there were no direct relationships. Amazon was drop shipping through Drugstore.com. I was part of the early team that started establishing all of the direct relationships with everyone from P&G to Burt’s Bees. I had a couple years to figure out how to be profitable in that space. As you can imagine, there were a lot of different strategy changes.

Then, I started doing a lot of work with some early brands that landed when Amazon launched an advertising platform. Now, it’s called Amazon Media Group. In 2010, I switched from the retail category management world in consumables to supporting a lot of the brands that wanted to start doing advertising work. I held various roles in program and product management, creating the new AmazonFresh, launch packages, and many different marketing programs within Amazon, Amazon Mom, Student, and Prime.

Q: During your time at Amazon and Mars, how have you seen the CPG industry evolve in its preparedness and capabilities for e-commerce? Where do you see the industry now? How do you see Amazon’s role?

I would classify CPG companies that leaned in early as those that simply had foresight. These firms had decision-makers who embraced e-commerce, and had the budgets to get started. Many of the companies that leaned in were the bigger ones, companies that tried to forge strategic partnerships with Amazon, and met with Amazon vice presidents for face-to-face discussions. They’re farther along because of it. But there were also large organizations that didn’t make a move, and they’ve suffered. Their online sales are much lower than their counterparts. In their defense, it could be said that they simply didn’t have the capabilities or knowledge in-house to take on e-commerce. It was hard and time-consuming, so they didn’t focus on it.

But in general, the marketplace today has evolved to the point where boards of CPG companies are saying, “Hey, I think we need to figure out this e-commerce thing, because it’s becoming more important.” Still, for most companies, e-commerce remains a small percentage of overall sales, and it conflicts with many of their internal ways of doing business. Although they’re giving their e-commerce channel more support, we’re still not in a place where things are working extremely well. There are still so many challenges.

Q: You just used phrase “strategic partnership with Amazon.” From your perspective, having both worked as a partner to Amazon and at Amazon, what does a successful partnership with Amazon entail?

Amazon is a platform, but CPG companies can partner with it by making changes internally to support what’s needed. A lot of supply chain and operational things need to happen, because e-commerce is so different from brick-and-mortar stores. Like the fact that on the web, small numbers of items are ordered frequently.

To be a partner, a CPG company has to willing to take the time and effort to change traditional, old-school logistic supply chain processes. They’ve also got to be willing to test and learn with the Amazon platform, because it changes at the drop of a dime. A strategy that was tried last year may not have worked, but now, thanks to some changes by Amazon, it works this year. It’s all intensely data-driven.

Q: You mention building out teams to support Amazon or the entire channel. What do those teams look like today, and what have you noticed in terms of skill sets or profiles of who’s on those teams?

With the emergence and importance of Amazon, many CPG companies are building offices in Seattle [Amazon’s headquarters], and hiring experts who are often ex-Amazonians.

These people have a different skill set than others at the company. They truly understand the Amazon platform, how Amazon negotiates, how they work, how the data is created, and what the terminology means. It often runs counter to what these brick and mortar companies are used to, so hiring these people is a great strategy, a huge time saver in the long run. It’s the big trend today.

Many of these hires are finding that the traditional structure of their new organizations doesn’t always work. One difference is that Amazon is such a fast-paced environment, where you have to react quickly. It’s necessary to educate people internally at these CPG companies on how to act nimbly. There’s a huge gap in terms of culture and capabilities.

Q: Speaking of the pace at which Amazon moves, Amazon has very discreetly just rolled AmazonFresh into its core dot-com platform for a handful of ZIP codes in Southern California. How do you succeed with some of the different formats that are emerging within Amazon such as the full basket shopping on AmazonFresh?

Do you remember Endless.com? It was a higher-end fashion site, an Amazon microsite, with everything owned by Amazon. I think it was around for maybe two years, and then quietly went away. Amazon found it was just too hard to drive traffic to the site. Now, if you look at how AmazonFresh is going to scale and have all of these different cities with all these different microsites—all powered separately, and with a separate mobile app—it’s going to be very hard to operate.

So it makes a lot of sense to try to move it onto the Amazon.com platform—in effect, to consolidate—and take advantage of all of the eyeballs and traffic there. Amazon is a spear fish and search-driven site, but with different platforms such as AmazonFresh and Prime Pantry, which are baskets you build—the result is people are shopping on all of these different platforms and using them in different ways.

CPG companies simply aren’t prepared. I still haven’t seen where a company has gotten the right assortment and the right place on all these different platforms. What’s even more challenging is that there are different buy-in teams you’re dealing with between different platforms. Not to mention the different mobile and desktop channels.

Q: You have both a category management and commercial experience background, as well as media and marketing. Tell us about the interplay between them at Amazon, as well as from a supplier’s perspective.

To begin, you need to have the right assortment in the right place. It’s like setting your dinner table. Once you’ve got the basics done, you can really market those products and get people to know about them. You’ve got to truly understand which marketing levers are most effective on Amazon, although right now, I think these levers are changing in the retail category management area.

In addition to making sure that you even have the right items on the site, you’ve got to have complete, relevant content that’s search engine-optimized. Start by making sure you’ve got the correct title. It’s the only way you’ll be able to market it effectively across the platform.

Q: What marketing vehicles are most effective for doing this?  

A fairly recent one is AMS [Amazon Marketing Services], which is their search marketing tool. More and more people are starting to jump on the bandwagon and use it. I have found it to be extremely effective, and so has the ecosystem of people that I work with e-commerce. That’s been a great driver. It’s very cost-efficient because it’s a CPC model, or a cost-per-click model. You’ll get millions of impressions out there, and it’s relatively inexpensive as you bid on keywords.

The other thing you need to do is leverage enhanced content. I even have started calling it Content 2.0, given the fact that so many people want a lot more information about the products that they’re putting into their bodies and on their bodies. It’s not just taking the packaging and re-formatting it into pretty pictures on a page. Rather, it’s actually taking the time to explain what the product does, where it’s from, and why it’s better. I always point to Amazon Element, which is Amazon’s own private label, as a good example of this level of content. It not only helps sales on Amazon, but off Amazon as well.

It helps customers. It’s like your own brand marketing on that page. That makes it an effective driver, and of course, building on the search terms on those pages is helpful for search engine optimization. Interestingly, many CPG people are looking for a huge ROI and a conversion of sales here. But it’s really more of a branding platform that’s got to be leveraged effectively and efficiently—a way to get awareness out there, especially for new products.

Q: Totally agree. There has to be a dual mentality of trying to build volume in the channel, while respecting that Amazon and e-commerce are a primary destination for product discovery and research.  You also touched on effectiveness and efficiency. What’s your take on the state of measurement and data analytics in the e-commerce channel? Where do you see opportunities and challenges?

I still think that measurement and ROI are very difficult. I was talking to someone that is a team leader of a very large CPG company, and his comment to me was, “You know, if I do a rollback or something at Walmart, I know exactly how many units I’m going to sell. When I do something at Amazon, I have no idea how many units I’m going to sell.”

One of the reasons for the difficulty is the attribution model. There are actually two different platforms internally, within Amazon. Let’s say you have a media campaign, you’re doing search, you have a promotion—and it’s all working together. Well, with the attribution model Amazon uses—if the last ad you saw was 14 days back, and it was the last touch, the sale is attributed to that ad. But if you saw an ad and then you did a search before you bought the product, your sale might be attributed to that search term. That really muddies the waters in terms of understanding what’s driving these results. Amazon will tell you the same thing—that it’s hard for them to know what’s driving the business.

Q: That puts Amazon at a disadvantage versus the Walmart team or Club team, each of whom has a clearly structured, systematic stream of data that tells them the size of the prize, how they’re performing versus the competition, and what ‘s working in terms of trade promotions, marketing and merchandising.  Do you agree 

Yes, and I would add that Amazon’s own analytical tools, ARA [Amazon Retail Analytics] and ARA Premium, are hard to use. There’s a lot of schooling. There is a big use of third-party data providers, such as yourself, to make it a whole lot easier for the CPGs to get to their data faster, with some additional analytics on top of it.

Q: One topic that we haven’t hit on is seasonal sales. We recently had the Super Bowl and Valentine’s Day. What do you say to clients that are in impulse-oriented or seasonally driven categories, and need to translate their success in brick and mortar to Amazon and the e-commerce channel?

I spent a lot of time at Amazon creating sponsorship packages around seasonal events. When you’re in a brick-and-mortar store and it’s Valentine’s Day, there’s an aisle that’s all pink and red. It’s strategically placed, so you have to pass it, or it’s right in front of you as you check out. You see it, and it’s three-dimensional. Online, it’s so two-dimensional that you could just go straight to the item that you want to buy, toothpaste or tissue paper, and you could never go to the Valentine’s store.

When I think of seasonal opportunities, like Valentine’s, there are two questions I ask: how much organic traffic can Amazon drive to these stores to get consumers in front of the brands? And how is that brand going to be placed in that store—above the fold, prominently? It usually correlates with how much money they’re willing to spend. If it’s a small amount, they’re going to be below the fold and not get a lot of exposure. Maybe there are competing brands, because Amazon usually doesn’t allow for exclusivity. To me, in general, it’s not worth it. The sponsorships that work are when bigger CPG companies really lean in, with lots of money, so they own it.

Q: As we wrap up, any final thoughts on what CPG companies should be doing?

One thing is developing content for enhanced detail pages, including short-form videos. When you’re creating these pages, think of which online formats you’re using, the channels, the case quantities, and so on. Have the right people in place organizationally, and make sure they’re talented enough to lead the e-commerce charge. Also, be nimble enough to test and learn what you should be doing, so that when you lean in, you’ll be leaning in on the things you know will perform.

Q: Wise words, Melissa. If people want to reach you, how can they find you?

They can reach me at BurdickM@themarsagency.com. You can also find me, Melissa Burdick, at LinkedIn.

To hear other industry thought leaders discuss the key eCommerce trends impacting the CPG and retail sector today, visit our brand new Profitero Podcast Series.