By Pete Andrews, Manager of International Client Services, and Alain Van Den Eynde, Account Manager EMEA, at One Click Retail

Amazon’s holiday shopping season is right around the corner. American Thanksgiving, which falls this year on November 23rd, officially kicks off the holiday season, and brands need to begin their eCommerce strategies now in order to generate the biggest possible return.

Cyber Weekend, annually the first weekend after Thanksgiving, is one of the biggest shopping weekends of the year in the US and most of the western world, both in-store and online. In 2016, Amazon’s Cyber Weekend sales grew by 18% to reach $260M in first party sales over the four-day period. Going forward, there is every reason to believe that Amazon will continue this growth trend and remain the most profitable sales channel for vendors going into the 2017 holiday shopping season.

Using data collected from Amazon’s top first-party sellers, One Click Retail can help your brand strategize for the upcoming holiday season by taking into account the 4 Ps of a successful plan: Products, Price, Promotions and Placement.

Products

Amazon uses complex algorithms to rank search results; just like search engine optimization (SEO) for Google, Amazon Search Ranking (ASR) is extremely important for brands. Though Amazon follows a unique set of rules to generate the best results for online shoppers, there are a few things that are universal, including the fact that no matter how complete your product detail page is, it still takes time for it to climb the ranks. For this reason, upload your seasonal products as soon as possible so they have time to fully integrate into Amazon’s search and inventory ordering system.Amazon-holiday-data-on-product-sales

To rank higher in search results page, it’s important to optimize the content on your details pages. Be very specific, highly detailed, and aware of the keywords relevant to your target audience in order to attract the right people to your pages. Integrate product reviews on details pages to rank higher and increase conversion, and optimize images to make sure shoppers don’t overlook your products. Make sure your content is finalized no later than the end of September, as Amazon will lock the ability to update your details pages at the beginning on Q4 2017.

Price

Amazon is committed to offering the lowest price on the market. They use an advanced price-matching system to scrape the internet for lower prices offered by other retailers and automatically lower their prices to match. For this reason, brands need to be careful not to cannibalize themselves by offering a lower price elsewhere. Doing so can trigger a price drop across all channels, which can have a number of unintended consequences—including eliminating your profit margin, causing you to go out of stock due to “too good of a deal”, causing you to CRaP out (Can’t Realize a Profit), or be listed as EFP (Exclusively For Prime) because Amazon’s profit margins are too low.Amazon-data-on-holiday-pricing

Brands risk the most when they list the same SKU at multiple retailers and it goes under promotion somewhere other than Amazon. Amazon will automatically match the deal or coupon, and may subsequently ask the manufacturer for extra funding to run the deal. Amazon may also ask the manufacturer to change the SKU that is offered on promotion on the Amazon site, which could mean a lot of rework and planning for the manufacturer. Additionally, it is also at Amazon’s discretion to match prices between different SKUs which are nearly identical (such as color variations of the same product).

Promotions

Though Cyber Monday was the busiest online sales day of 2016 (Amazon’s 1P sales were $640M) the phenomenon has spread well beyond just 24 hours. Last year, Black Friday held its own with 76% of the sales volume of Cyber Monday, while the start of the holiday period kept moving earlier in the week, with Amazon’s traffic spike actually beginning on the evening on Thanksgiving Day.Amazon-holiday-promotions-guide

Promotions have always been a major contributor to holiday sales, with the biggest sales lifts happening in response to discounts of 40 to 50 percent. During Cyber Weekend 2016, Cyber Monday still boasted the largest sales volume with an average discount of 45%– even though Black Friday featured bigger discounts. Interestingly, while sales weren’t nearly as high as Friday or Monday, Sunday saw a YoY increase of 49%; if the trend continues, Sunday promotions could be a major growth opportunity for brands in 2017.

For more on 2016 Cyber Weekend promotions, see OCR’s detailed recap.

Placement

Even if you follow numbers 1, 2 and 3 perfectly, your deal is not going to drive sales if it doesn’t have visibility. 9 out of 10 Amazon purchases start with search and 2 out of every 3 clicks are on one of the top three search results. Simply put: if you haven’t optimized your search, customers are not going to buy your products.Amazon-Holiday-Sales-Data-product-placement

Ahead of the holiday shopping season, Amazon is going to try to sell you marketing placements for a substantial fee. Before you buy, make sure that the placement is in the purchasing path of your target customers. For example, the most commonly pushed marketing placement is on Amazon’s category pages, but do your customers ever even visit the category pages? The three biggest pages on Amazon are the Gateway (homepage), the Today’s Deal pages and the search pages. Marketing placement can generate a significant ROI, but only if your customers are actually going to see them.

BONUS TIP: Data Measurement

With all of the hard work of optimizing your holiday sales through Product, Price, Promotions, and Placement, the importance of measuring the marketplace is foundational to long-term above average returns. As Peter Drucker emphasized, “If you can’t measure it, you can’t improve it.” The Amazon business model is built on data-driven insights and iterations. Companies that leverage business intelligence and A/B testing will find increased long-term success in future “4 Ps” endeavors. The key is always to drive traffic to your products, and following the 4 Ps can go a long way in making that happen. Products, Price, Promotions and Placement are the key terms in setting up an effective, profitable Amazon strategy ahead of the holiday shopping season, for which brands should be ready by October 1st at the latest. Consumers are starting their browsing early for the most competitive and lucrative sales weekend of the year, and retailers need to be prepared.

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 98.5% accuracy down to the level of the individual SKU on Amazon 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.

If you are a brand manufacturer who would like to learn more about how you stack up to the competition—or would like to see your market share and category growth insights—email us at info@oneclickretail.com for a free capabilities demo.