In this month’s newsletter, Buy Box Experts examines key topics on which brands on Amazon should focus through late December.
What Does Black Friday/Cyber Monday Look like This Year on Amazon?
Major retailers have already announced that they will not be open on Black Friday (though we expect their online shopping sites will continue to be operational for holiday shoppers). With its upcoming Holiday Dash event, Amazon will offer holiday shopping specials normally reserved for Black Friday, but now running throughout November. Consumers are being encouraged by retailers to stay out of physical stores. COVID motivates consumers to do more online shopping anyway. We expect to see a huge year-to-year increase in Q4 online shopping.
That expected sales increase will not likely be supportable with adequate last-mile delivery if orders are concentrated around the traditional five days of Black Friday. It makes sense that Amazon would seek to spread out demand (and orders) across as much of November as possible. By starting promotional sales earlier in November, Amazon aims to get more demand addressed earlier in the month when there is more last-mile delivery capacity available.
All retailers not called Amazon are reliant on UPS/Fedex/USPS to handle last-mile delivery of their online orders. We anticipate that brands and sellers will see strong Amazon demand starting earlier in November, and that demand will carry on right up to a couple days before Christmas. Amazon is better equipped to ensure on-time delivery through its own massive last-mile network. This will draw consumers to Amazon, as it will be able to support on-time delivery right up to evening of December 24. For most other retailers, they will need to shorten the last day of shopping to guarantee on-time pre-Christmas delivery, or face a sharp increase in shipments unfortunately arriving after December 24/25.
If you and your Brand Growth Strategist (BGS) aren’t able to get enough inventory into Amazon’s fulfillment centers to support expected demand, please work with your BGS to tighten up the cut-off dates for last-minute Fulfilled-by-Merchant (FBM) orders to a date earlier in December. We expect the traditional last-mile carriers will be slow in getting orders delivered, and we don’t want you hit with late delivery claims from Amazon customers.
FBA Returns May Pile Up in January
This holiday shopping season, there will be higher demand for Prime-eligible products. Amazon has also extended its return period for FBA orders. As a result, we expect that FBA sellers will experience more returns than ever before, likely creating substantial processing of returns by late January.
If you are an FBA Seller, work with your BGS to get unfulfilled inventory returned quickly in January. This helps to avoid FBA storage fees, and provides sellers with more time to test/grade returned products. If holiday Amazon FBA sales are 2x than last year, we expect FBA sellers could see returns that are 2.5-3x the normal return levels. Plan for the inevitable: higher return rates will most likely require more staffing and attention.
Upgrade Your Keywords and Recalibrate Spend for Amazon Advertising for Q4
Amazon Seller Central now offers the Brand Analytics tool, and our BGS and Catalog teams have been using this tool to find the best terms for your top products. Let’s say you are selling blankets that have pink elephants printed on them. Search terms suitable for ad bidding could include terms like “elephant gifts” or “pink gifts for girls” that might be missing from your campaigns because they don’t get much search volume and sales during the rest of the year.
Using Q4-2019 data from our friends at Kenshoo, we see that peak impression volume on Black Friday, and highs again on Cyber Monday. Both total spend and Cost per click increase >40% around Black Friday.
Work with your Buy Box Experts’ Brand Growth Specialist to upgrade search terms on your key products now, helping organic and paid search. Also coordinate on how to calibrate ad budgets to ensure that your ads surface during the busiest shopping time of the year.
Amazon Q4 Inventory Challenges
Since the start of COVID, Amazon has not increased fulfillment space to keep up with the increased consumer demand. As a result, Amazon has put significant limits on how much inventory can be stored in its fulfillment warehouses, for both 1P brands and 3P sellers. Amazon’s fulfillment centers are already full. Amazon is experiencing 3+ week delays in receiving new inventory. This creates multiple exposures for brands and sellers. Their Prime-eligible inventory may run out well before the end of December. And they may not be able to replenish such inventory in time to avoid costly Prime stockouts through Christmas.
Discuss with your BGS whether your brand would benefit from having a merchant-fulfilled offer ready to go on top-selling items this Q4. If you are trying to replenish FBA inventory between now and the end of the year, you will likely want to consider replenishing FBA stock every 2-3 days, even if that means small package shipments into Amazon’s fulfillment centers.
Finally, discuss with your BGS when to reload inventory a few days before Christmas, so as to avoid potential stockouts after Christmas. We’ve seen too many brand clients run out of stock just before Christmas when their warehouse team starts its vacation time. This results in longer-than-necessary out-of-stock situations, costing our brand clients lost sales and critical sales ranking.
We’re thrilled to introduce our partner Riverbend Consulting this month! Buy Box Experts only partners with the most trustworthy, dependable companies, and Riverbend delivers.
Riverbend’s team is made of ex-Amazon employees, experienced sellers, and experts with the knowledge to get sellers reinstated – fast! Beyond reinstatements of accounts and ASINs, Riverbend also offers monthly Seller Account Protection and helps with reimbursements and buyer messaging. In addition, Riverbend offers placement in Editorial Recommendations to get sellers on page 1 of search. They work with all sizes of sellers, from mom-and-pop operations to several sellers in the Top 10 on Amazon.