Brands often tell us that Amazon isn’t working, TikTok Shop isn’t profitable, or ads are eating into their margins.
But sometimes it isn’t the channel that isn’t working. It’s the way you’re measuring it.
Looking at each ecommerce channel in isolation can make it difficult to understand what is really driving your results. Different channels play different roles in the customer journey, and a sale on one platform may have been influenced by activity somewhere else.
This is what we mean by the ecommerce halo effect.
What is the ecommerce halo effect?
The ecommerce halo effect is when activity on one channel influences a customer who then goes on to purchase through another.
For example, a customer might see your product on TikTok Shop or come across an image or video on Instagram. They become interested in the product and want to know more about the brand.
Rather than purchasing there, they search for the brand on Amazon, find the product and make their purchase.
The awareness came from one channel, but the sale happened on Amazon.
This is important because it means you cannot assume that every Amazon sale started on Amazon. Equally, you cannot assume that TikTok Shop or Instagram isn’t working simply because the customer didn’t complete their purchase there.
Different ecommerce channels have different roles
Each platform plays a different role.
Instagram is a social platform. It can sit towards the top of the funnel, helping to create awareness and get people interested in a product.
Amazon is a transactional marketplace. People are going to Amazon to make a purchase, so its role is different.
TikTok Shop can be more complicated because it combines social and commerce.
The social side can drive awareness through content, views and engagement. The commerce side gives customers the opportunity to make a purchase.
This means the results and KPIs you look at for TikTok Shop can be different from those you use for Amazon.
Why the same KPIs don’t work for every channel
One of the mistakes brands can make is expecting different platforms to deliver the same results.
A brand might expect TikTok Shop to generate the same level of sales as Amazon. It might also expect the same level of profitability it gets from Amazon or its own website.
When that doesn’t happen, the conclusion can be that TikTok Shop isn’t working.
The same can happen with social media. Meta Ads or Google Ads can start to look expensive, so the decision is made to stop the activity.
But what happens if Amazon sales then start to fall?
Those other channels may have been helping to drive the awareness that eventually resulted in an Amazon sale.
This is why it is important to understand the role each platform is playing rather than looking at each one in isolation.
Amazon may not be driving all of your Amazon sales
Brands can look at their Amazon performance and assume that the sales are being driven by the activity happening on Amazon, such as Sponsored Ads and display advertising.
But there may be other activity contributing to those results.
A customer could see your product on Instagram and then go to Amazon.
They could discover it through TikTok and later purchase it on Amazon.
They might see it in a physical store, then go to Amazon to look at reviews, see a better price and make the purchase there.
The final sale happens on Amazon, but the customer journey started somewhere else.
The challenge of ecommerce attribution
The difficulty is that the data doesn’t always give us the complete picture.
Ideally, we would have a report that showed exactly where every sale started and every step the customer took before making a purchase.
In reality, much of the available data is fragmented.
There are reports that can give you some understanding of attribution, particularly online, but it can still be difficult to know exactly where a customer first came into contact with your product.
The same challenge exists in physical retail. If someone walks into a store and buys a product, you don’t necessarily know whether that was the first time they had seen it or whether they had already come across the brand somewhere else.
Online gives us more data, but that doesn’t mean we can always see the complete journey.
Look at the relationship between your channels
When deciding whether to continue investing in Amazon, TikTok Shop, social media or another online channel, don’t look only at the margin or sales being generated directly on that platform.
Look at what is happening across your other channels too.
When you carry out activity on social media or TikTok, do you see Amazon sales increase?
Do you see an impact on your direct-to-consumer website?
What happens elsewhere when you reduce or stop activity on one channel?
Looking at the correlation between your platforms can help you understand whether activity in one area may be influencing results somewhere else.
Don’t pull the plug without looking at the wider picture
When brands want to become leaner or cut costs, it can be tempting to start switching off channels that don’t appear to be delivering enough margin.
But if those channels are contributing to awareness and sending customers elsewhere, removing them can have an impact on overall sales.
That is why it is important to look at the relationship between your channels before making that decision.
The key is not to assume that a sale belongs entirely to the platform where the transaction happened.
Taking a more holistic approach to ecommerce
At eCommerce Nurse, we specialise in Amazon and TikTok Shop, but we don’t look at either platform in isolation.
Even when we are working with a client solely on Amazon, we still want to understand what they are doing across their other ecommerce channels.
Activity elsewhere could be impacting Amazon performance, and Amazon activity could be having an impact elsewhere.
Understanding that wider picture is an important part of evaluating what is really working across your ecommerce channels.
If you want to take a more holistic approach to your ecommerce strategy and understand how your channels are working together, get in touch with our team to see how we can help.
