Amazon Prime Day 2020
In a year of unprecedented circumstances and amid a backdrop of a global pandemic, Amazon Prime Day (October 13-14) is gearing up to be the biggest shopping event of the year. With COVID-19 impacting how shoppers purchase in store it’s not surprising to see forecasts showing the e-commerce giant flourishing from its Prime Day event yet again. Sales in the U.S. are predicted to reach upwards of $6 billion with worldwide sales hitting $9 billion. While Prime Day has historically kicked off mid-summer and back to school shopping, this year will be focused on holiday deals.
Prime Day Planning
With the pandemic throwing our lives for a loop, online retailers are finding planning Prime Day to be more challenging in the face of fluctuating consumer demand. However, according to a survey conducted by Profitero in late March, 56 percent were optimistic that Prime Day would be successful given that consumers were already shopping online due to coronavirus concerns. COVID-19 is still very much a part of our lives, making Prime Day lightning deals and heavily discounted products especially attractive for deal-seeking shoppers. As of August, a poll by Piplsay found about 48 percent of U.S. consumers were budgeting to spend the same or more than last year on Prime Day and 31 percent were planning to spend less.
While consumers are adapting to a new way of shopping, Amazon is adjusting to the new needs created by the pandemic. Once mundane online purchases like household goods, cooking and office equipment have become some of the top demanded products. “Similar to the early days of the COVID-19 crisis, we expect the top performers on Prime Day to be electronics, toys and games, beauty, health and personal care, home, appliances, and other pre-winter categories, as consumers continue to shelter at home during the winter months,” said Dani Nadel, President and COO of marketplace pricing analytics firm Feedvisor.
Although dwarfed by giants like Google and Facebook, Amazon’s newish venture in advertising is a fast-growing pillar of the company. While Prime Day focuses on Amazon’s suite of products, other top name brands are tapping into Sponsored Product Ads. These keyword search-driven product ads are used by millions of sellers leveraging the third-party marketplace to drive sales at a favorable return on ad spend (ROAS).
Amazon ranked the highest (36 percent) among respondents to a December 2019 Feedvisor survey that asked brands which platform drove the highest ROAS. Paid social and Google came in second and third with 29 percent and 27 percent of responses respectively. Among brands selling on Amazon, the disparity was more pronounced, with Amazon commanding a whopping 59 percent of responses. Amazon’s reputation for effectiveness and demonstrable ROAS has lead an increasing number of brands to advertise on the platform. In fact, the percentage of U.S. brands advertising on Amazon jumped from 57 percent in 2018 to 73 percent in 2019. It is no surprise that Amazon’s ads platform has weathered the COVID-19 storm well with an expected 41 percent growth in digital ad revenue YoY.
Prime Day and the Holidays
Prime Day has long been known as “Black Friday in July” but with COVID-19 pushing the event to October, it’s now every brand’s risk and reward to lay a foundation for a successful holiday season. Due to supply chain issues, brands run the risk of depleting inventory with little hope of building it back up before the Cyber 5 (Thanksgiving, Black Friday, Cyber Saturday, Cyber Sunday and Cyber Monday).
Brands are leveraging Prime Day to read the room for consumer habits in both online and in-store trends in an effort to forecast the latter half of Q4. It’s more important than ever to stay flexible and quickly adapt media strategy based on real-time data from consumer trends. If your brand needs help keeping pace with the ever-changing media landscape, connect with us to learn how Mindstream Media Group can Fast-Forward Your Business through perspective, capabilities, a CRUSH IT culture and the pricing insight $500 million in scale brings.
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