Every experienced Amazon seller knows what to expect in Quarter 4. That’s true for most years anyway. There’s hustle, there’s bustle, and there’s record-breaking sales. In 2019 Amazon’s net sales stood at $70 billion in Q3, rising to more than $87 billion in Q4, which marked a 21% year-on-year increase.
But, as we all know, this year hasn’t been like most years. The COVID-19 outbreak has changed what we all thought we knew.
Despite the pandemic, the Amazon holiday shopping season is still expected to be intense. Amazon itself expects to break through the $100 billion threshold for the first time with anticipated net sales between $112 and $121 billion.
But the season could very much be just as ‘unprecedented’ – to quote the Government’s new favourite word – as the rest of this challenging year. This means that it’s important Amazon sellers don’t approach Q4 with a blasé ‘been there, done that’ attitude.
Being fully prepared for a holiday shopping season with a difference is expected to be the key to boosting customer engagement, improving conversion rates and driving sales during the first holiday shopping season any of us have ever encountered during a global pandemic.
What to Expect
As 2020 has shown us, we can never be 100% sure what’s in store. However, with so much research being undertaken during the outbreak, we do have more information than ever before about shopping behaviours and spending habits.
This data can provide us with a pretty good idea of what Amazon sellers can expect during Q4:
- Increased Demand – While online sales often skyrocket during the holiday shopping season, reports suggest that digital spending still accounted for only 20% of all consumer retail spending at the end of 2019. Today, however, it’s estimated that online purchases will make up 30% of all spending. Subsequently, Amazon sellers can expect to see increased demand from their customers.
- Supply Chain Gaps – Although many supply chains have reverted to greater levels of normality since the height of the pandemic, Amazon sellers must still consider whether their supply chain could be affected over the busier holiday season. It’s also possible that illness across supply chains could pose a risk to inventories, so this is something to keep in mind.
- Delivery Delays – Deliveries are usually affected to some degree due to increased demand over the holiday period. Add in the fact that an increasing number of shoppers have been forced to make purchases online due to the closure of non-essential retail – and potential sickness across courier networks – and significant delays could occur.
- Shifted Spending Habits – The COVID-19 outbreak has affected different segments in different ways. Job losses and furlough, for example, have made some people wary about spending whilst new opportunities within certain sectors have provided some audiences with greater resources. Amazon sellers may find that their target audience has shifted this year.
- Greater Competition – With the closure of non-essential retail and a consumer reluctance to shop on the high street, a number of small businesses have turned to online sales with Amazon proving to be one of the easiest platforms to get started with. As such, Amazon sellers can expect to see greater competition this holiday season which can make it more difficult to stand out.
Succeeding in the Pandemic Holiday Shopping Season
To navigate the above challenges that are expected to arise during the holiday shopping season, it’s crucial that Amazon sellers are well prepared for the new Q4 landscape. Here are a few simple, yet effective, ways that Amazon sellers can prep:
1. Become Prime Eligible
Becoming Prime eligible, sellers can remove many of the challenges associated with handling and shipping by delegating these tasks to Amazon and leaving more time to focus on aspects such as marketing and customer engagement.
The one aspect to look out for here however, is that as part of its own preparations for the holiday period, Amazon has announced a restocking limit of no more than 200 units.
Opting to go down the ‘merchant fulfilled’ route can eradicate the worries of restocking, but be sure to weigh up the pros of this against the cons of self fulfilment.
2. Manage Your Supply Chain
While it is hoped that the majority of supply chain problems are now over, it pays to be prepared. The last thing that you want as an Amazon seller is to encounter a supply problem during periods of high demand.
As part of your preparations, try to allow for extra time in your own restocking strategy and, where possible, look for opportunities to track deliveries so that you can proactively intervene where necessary.
Of course, in the UK, COVID-19 isn’t the only concern this year. With Britain leaving the EU at the end of December, be sure to prepare for changes to any European supply chains, too.
3. Consider Your Audience
COVID-19 has affected people in different ways, and the segments you targeted during your 2019 holiday shopping campaigns may no longer be your ideal audience.
To fully prepare for Q4, it’s essential to ensure you’re targeting the right segment. As part of your preparations, once you’ve identified your 2020 target audience, it’s a good idea to take a look through your existing listings and ensure they are optimised with this audience in mind.
This may include adapting content, changing keywords, tweaking the overall tone of voice and running A/B tests to determine the biggest impact.
4. Adapt to Meet Current Trends
Trends are changing. Reports suggest that, around the time that lockdown measures were introduced, spending on sports and outdoors products dipped slightly whilst spending on home and garden items skyrocketed as people spent more time at home and drove greater resources into creating a happy, healthy, and productive environment.
Knowing this can allow sellers to incorporate new products into their inventory (although, beware that Amazon has introduced a quantity limit for new products) or remarket existing products to better meet the needs of 2020’s customers.
5. Build Paid Campaigns
If you’ve been relying on organic efforts to drive Amazon sales, then now is the time to consider launching some paid campaigns. With the competition being more fierce than ever before, organic efforts may not be enough to stand out from the crowd this holiday season.
Launching paid PPC campaigns can help to ensure you remain visible during the busy period. And, once you begin to collect data from these campaigns, you can use this data to better optimise efforts to engage with customers. For example, you may be able to add negative keywords to reduce spend while maximising impact.
6. Stress Test
You may already have a strategy in place to navigate the holiday season, but remember that this year could be very different without the potential to see exactly what’s going to happen next.
It’s vital that Amazon sellers are prepared for any possible situation and the best way to get prepared is by stress testing your plans. Areas to look at include how many orders you can reasonably handle and ship (if merchant fulfilled) per day and whether you can meet delivery expectations with your existing staff. If not, you may wish to consider bringing new skills onboard temporarily to cope with demand.
7. Look Beyond the Holidays
During the holiday shopping season, the number of Amazon users goes through the roof. Not all of them will make a purchase.
And, of those that do, not all of them will make a purchase through you. But that’s OK! Amazon sellers should be preparing to use the increased visitor count at this time of year to start building relationships with potential customers that can be nurtured over the coming months.
Work to promote your brand, not just your products (Amazon has plenty of options for this, like Storefronts). More eyes = more visibility, even if it doesn’t always translate to sales.
8. Stay Up-to-Date
The most important way of all that Amazon sellers can prepare for the holiday shopping season is simply to stay up-to-date with the latest news and announcements from the platform.
Amazon states that:
‘We will continue to make adjustments to best support your business and keep you informed along the way. We appreciate your partnership as we improve the efficiency of our fulfilment network to prepare all selling partners for a successful peak season.’
Just as Q4 2020 is different for sellers, it’s different for Amazon, too, and the platform could make more changes over the coming weeks.
At ClearAds, our aim is to bring you all the breaking news and latest announcements to help you adapt your Q4 strategy as needed and ensure that you don’t get caught out by new changes being introduced as Amazon works to create ways to navigate the holiday shopping season in the new normal.
Being prepared is key for enjoying success at the busiest time of the year and, here at ClearAds, we’re always on hand to provide support and guidance during times of change, whenever you need us.