by Daniel Young

Once in the not-too-distant past, Black Friday was a unique event. In the U.S., the first Friday after Thanksgiving was an opportunity for consumers to take advantage of deep, one-day-only discounts offered by retailers across the country. This tradition earned Black Friday the distinction of being the unofficial start of the holiday shopping season. More recently, Cyber Monday came along, giving online retailers like Amazon a chance to capture some of this traffic. With ecommerce growing at a rate that put in-store shopping to shame, Black Friday also began moving online; eventually merging with Cyber Monday to become Black Weekend, then Black Friday Week, then Black November – and Amazon benefitted more than anyone else from this transformation.

For Amazon.com, the holiday shopping season is essentially one long high-traffic period that lasts from the beginning of November until the end of the year. The company’s European markets are experiencing the same transformation, though Black Friday is still the biggest sales day by far. So to capitalise on this, brands need to get in on the ground floor. The last two months of the year are extremely competitive on Amazon, the single most popular online retailer for holiday shoppers, so brands need to start getting ready for the holidays right now if they want to stand out.

In this article, we’re going to break down how to prepare for the holiday season according to the 6Ps of eCommerce Intelligence Framework: Product, Placement, Perfect Page, Price, Promotion and Performance.

1.    Product

Amazon wants to sell products. The holiday season is by far the retailer’s biggest traffic and sales period, and Amazon will go above and beyond to make it even bigger. But they can’t sell products that they don’t have.

For brands to capitalise on this period, the first thing they need to do is get their full assortment of products listed on Amazon as soon as possible. This could be done by making sure that their entire holiday line – new and existing products – is loaded and available on the site. It takes time for new ASINs to be reflected favourably in Amazon search, and with so many new items being introduced ahead of the holidays, the sooner the better. The reason for taking this action is that Amazon has a hard deadline in the beginning of Q4 after which it will start locking the addition of any new products to its website

It also takes time for Amazon’s automated inventory system to calibrate the proper inventory levels and ordering times for new products. Going out of stock during the holiday season can seriously damage an item’s long-term performance, so we suggest that all holiday products are added by mid-September at the latest – the sooner they’re added, the less likely they will face stock issues as traffic increases.

2.    Placement

In 9 out of 10 cases, the path to purchase begins at the search bar. 80% of click-throughs happen on the first page of search results, and 64% of them are for one of the top 3 items returned.

To reach these shoppers, brands need to make their ASINs stand out. On Amazon, content is the key driver of search placement; successful brands keep their product detail pages (PDPs) consistently updated with relevant, targeted key words based on consumer search behaviour. During the holidays, this means specifically targeting seasonal terms such as “gifts for”, “stocking fillers”, “advent calendars”, etc.

The most successful brands extend their appeal by variating their key terms. For example, on the PDP for a bathing gift set, Baylis & Harding used several variations of the term “gift” to ensure the product is indexed in the search results for a number of different terms: “gift set”, “gift box”, “value gift” and “gift with tag” all appear above the fold in the page content.

Again, it takes time for these terms to be properly indexed by Amazon’s search algorithms, so get these items uploaded by mid-September at the latest.

Get Ready for the Holiday Shopping Season

 

3.    Perfect Page

Page content is a powerful tool for driving placement, but it’s even more critical for its role in driving conversion. In order to optimise sales to their full potential, brands need to achieve a perfect page. This requires the optimisation of several different elements, the most important being images, ratings & reviews, and A+ content.

Images – When someone buys a product from Amazon, 95% of the time they’ve looked through every image as part of their purchase decision. Including a minimum of 6 high-res images has a positive effect on conversion. These images should communicate the features and benefits of a product, should be clear and legible on a mobile device, and should demonstrate use cases. During the holidays, brands can stand out by including seasonally-specific images that may catch the eye of gift-buyers.

Ratings & Reviews – Both review count and average rating have a big impact on conversion: to drive consumer confidence, products should have a minimum of 21 reviews and an average rating of 4 stars or higher. When both of these thresholds are met, conversion rates more than double. But what’s even more important for the holiday season is that ASINs need to have at least a 3-star rating in order to run promotions – brands that can’t earn that rating are essentially out of luck.

A+ Content – Amazon A+ content, available to all first-party (1P) sellers, is a major tool for conversion. These heightened images, graphics, videos and charts are very effective at keeping shoppers on the page. A+ content, which can increase an item’s conversion by up to 20%, is especially critical for high-consideration items – items for which shoppers spend more time making a purchase decision and are more likely to be convinced by this additional information.

4.    Price

Amazon’s key pricing philosophy is to match the lowest relevant price in any particular market. In fact, Amazon is so committed to this philosophy that they will even send teams of people into stores to find deals and competitive prices that beat their listings.

Unfortunately, this means that brands aren’t directly in control of their pricing, which can have serious consequences. For instance, if Amazon finds that a competitor is holding a blowout sale, their pricing algorithm will match those sale prices. An unexpected price drop like this can cause a brand’s profit margin to disappear, which can then cause the product to CRAP out (Can’t Realise A Profit) or be reclassified as EFP (Exclusively For Prime). Or, if it’s a deal that’s perceived as “too good to miss”, it could drive a spike in sales which causes the product to go out of stock.

This is an especially pernicious problem during the holiday season, since so many retailers are trying their hardest to outcompete Amazon and may offer loss-leading deals in order to get people through the door. Brands can reduce the risk of price cannibalisation by using different SKUs for different retailers and/or running Amazon-exclusive products.

5.    Promotion

Black Friday is one of the year’s major deal days. Shoppers are coming to Amazon during Black Friday Weekend in order to hunt for the best sales, so brands are almost obligated to discount their products. On the bright side, because these promotions take place at the beginning of the holiday shopping season it poses a major opportunity for brands to capture plenty of deal-hungry traffic, which can drive a long-term lift in sales.

Get Ready for the Holiday Shopping Season

 

The above chart makes the impact of promotions extremely clear. Not every category is impacted equally, but even the less affected categories such as PC and Video Games still saw more than double the sales lift for promo items in 2017 as compared to non-promo items. Meanwhile brands in the Kitchen, Camera and Shoes categories saw such enormous lift on their promoted items last year that to discount their products again this year is a no brainer.

But how deep their discounts should be is a more difficult question. In 2017, a significant majority of deals were in the 20-30% off range. Most sales, however, went to products that were discounted by 40-50%. While the optimal discount is going to vary by product and category, one thing that’s clear is that a “25% off” deal is no longer enough to motivate shoppers – there’s just too many of them. On Black Friday, shoppers want to hunt for the “best” deal, so brands need to outdo their closest competitors in order to win the most traffic.

Get Ready for the Holiday Shopping Season

 

6.    Performance

The first 5 of these levers all feed into the 6th. Measuring the performance of a product on Amazon takes search, traffic and sales into account. Because each of the above metrics has a direct impact on performance, the 6th “P” takes a zoomed-out view, showing brands the combined results of all their efforts and optimisations.

Black Friday is arguably the single biggest opportunity for brands to boost their performance. A successful promotion during Black Friday Weekend can generate what we call a “halo effect” – this is when a short-term spike in sales permanently improves an item’s performance. The traffic and sales driven by the promo spins the Amazon flywheel, driving up the item’s organic search ranking, which in turn results in post-promo weekly average sales stabilising at a higher point that the pre-promo level. This sustained lift carries through the entire holiday season and the naturally higher traffic during that period continues to feed back into the item’s performance. As long as nothing happens to stop the flywheel – such as going out of stock – the product can maintain its higher ranking indefinitely.

The early bird really does get the worm. To get their products in front of as many potential customers as possible, brands need to prep their assortment no later than mid-September (although Amazon will allow new listings until the beginning of Q4). On top of that, they need optimised, seasonally-relevant content and attractive Black Friday discounts. Content optimisation is a must for brands to stand out during the most competitive time of the year, and beginning the holiday season with a kick-start promotion on Black Friday Weekend can start the Amazon flywheel spinning. Because of the huge positive impact it can have on their long-term Amazon performance, getting ready for the holidays is the most important thing any brand can do right now.

About One Click Retail

One Click Retail is the industry’s most accurate source of sales data for the world’s top eCommerce marketplaces. Using a combination of website indexing, machine learning and proprietary software, OCR estimates weekly online sales figures with market leading accuracy in order to deliver the best insights, analytics and strategies to their brand manufacturer clients. To catch a glimpse of how OCR gives brands critical edge on online platforms with our unique data and expertise, subscribe to our weekly eCommerce insights blog, and follow us on Twitter and LinkedIn.

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About Clavis Insight

Clavis Insight is a global leader in online channel insights for product manufacturers, and a principal innovator at the forefront of the eCommerce analytics revolution. The company has developed a powerful framework – 6Ps eCommerce Intelligence™ – for organising and prioritising eCommerce analytics and actions to drive online channel success for brands. Global manufacturers use their daily eCommerce analytics and insights to drive sales in their categories online, to optimise content for brand equity enhancement, protection and product information compliance, and to deliver consistent, unified reporting on online retailer brand presence and performance.

For more information on Clavis Insight 6Ps eCommerce Intelligence™ visit www.clavisinsight.com. www.clavisinsight.com