Learning to sell directly to consumers through Amazon
Ashish Girotra remembers when Dr. Reddy’s first began selling its over-the-counter brand nicotine patches on Amazon in 2016.
“It was a completely new experience for us,” he recalls. “Nothing at all like selling through regular distribution or wholesaler channels.” The company started selling OTC products through Amazon as an experiment, he explains. Shortly after, he added another product to the portfolio.
The big change came two years later in 2018 when Amazon reached out to us, he says. They were looking for companies that could launch Amazon-exclusive brands in the OTC space. “We knew it was great opportunity, and we wanted to do it right,” he explains. “So we put Lindsay in charge of the branding development effort.”
A veteran of the OTC Team, Lindsay Proffitt led an exhaustive branding development programme working with one of the best pharma-branding agencies in the business. Under Proffitt’s leadership, the team worked through hundreds of names and naming conventions, and conducted multiple brand research efforts.
“Interestingly, the name ‘HealthCareAisle’ actually came up in a casual discussion among our team members,” Proffitt recounts. “At the end of the day, all our customer surveys seemed to point to the name as simple and understandable.”
After landing on the name, Proffitt says they hired another company to design the logo. “We really like the shopping cart look that the agency came up with,” he says. “It reminds us of the online shopping experience.” With the brand and logo in hand, the team went about the business of designing the packaging in-house, which Amazon liked immediately.
Girotra says that initially, the team thought they were simply going to develop and sell store-brand OTC products to Amazon, not unlike the way they sell to other big box retailers and drug store chains. “We learned quickly that in order to be successful, you need to sell through Amazon, not to Amazon,” he explains.
The team hired another experienced agency to help them navigate the ‘faceless’ Amazon business framework and also develop a specific marketing and merchandising plan. “We have to do our own product setup on the Amazon platform, manage the portfolio, and drive demand for the product directly to consumers,” says Girotra. “Unlike our traditional channels our traditional channels, we are responsible for end-to-end direct selling.”
The key learnings as well as strategy and brand development took most of 2019, and by 2020, Dr. Reddy’s direct-to-consumer strategic priority gained the necessary traction and proved its viability. In January this year, the HealthCareAisle® store brand hit a key milestone, achieving $100,000 of sales in a week and is on the trajectory of achieving an annualised goal of exceeding $5 million in annualised sales.
At the current growth rate, Girotra believes we have validation that the Amazon direct-to-consumer channel is now a key growth driver for the OTC business. “Currently we launch products in parallel on Amazon, but from now on, we will launch on Amazon first and then to the channels,” he says. “Currently we have more than 25 items on Amazon, but we anticipate ramping up quickly and almost doubling our portfolio offering to 50+ products very soon.”
