When Amazon launched into its first ever Prime Early Access Sale last Tuesday 11 October, it was questionable whether this second event would be enough to pull the e-commerce giant out of its recent sales slump and present the same opportunities for brands as Prime Day has in previous years. The perils of inflation and rising costs presents a bit of a catch-22 for brands selling on Amazon, particularly during discount events like Prime Day and Black Friday: there’s the temptation to offer deep discounts to clear inventory ahead of the peak holiday season to regain warehouse space for high-margin products on shopper’s holiday wish lists. But at the same time, such discounts can shrink your margins to nothing, potentially threatening your profitability in the long term.
The early results of the Prime Early Access Sale may have raised some alarm bells…
- A few hours into the start of the event, sales were comparable to the previous 30-day average in the U.S.
- Amazon finished Day 1 of its Prime Early Access sale with a slight loss, with transaction volume, frequency and spend down 30-40% relative to the previous Prime Day that took place three months prior
- Twitter mentions of “Prime Early Access Sale” were 70% less than that of July’s Prime Day event, a sign that ‘promotion fatigue’ could be setting in.
Amazon’s Prime Early Access Sale may not have shaken the e-commerce landscape as it used to, but there is evidence that these events remain a critical opportunity for brands. Investors continue to rate Amazon highly as an online marketplace with millions of merchants offering a huge selection of goods. And Q4 has only just begun - there are plenty of learnings from the Prime Early Access Sale that can help inform your strategy in the marathon to peak holiday season. We took a closer look at shopper search data on Amazon UK to uncover some key learning points you can take away as you continue into the Golden Quarter and face the most important months for e-commerce sales.
Methodology
Our report is based on search data from Amazon Vendor Central which includes:
- Top keywords that shoppers are searching for on Day 1 of the Prime Early Access Sale
- Search Frequency Rank (SFR), the popularity of a particular search term (“1” is most popular)
- #1 Clicked on ASIN for each keyword
- % Conversion share for the #1 clicked on ASIN
Search is seasonal - it’s time to ramp up your keyword strategy for the holidays
Word cloud based on the top 1000 Amazon keywords on Day 1 of the Prime Early Access Sale. Source: Amazon Vendor Central
With the Prime Early Access Sale happening in mid-October, it’s no surprise that keywords with the highest Search Frequency Rank included many related to Halloween, particularly “halloween costume” (SFR: ) and “halloween decorations” (SFR: ). As predicted, Christmas gifting was also popular with “christmas decorations”, “christmas gifts” and “advent calendars” ranking among the Top 100 search terms (SFR 34, 71 and 26 respectively). This reflects Numerator’s event data which showed that 29% of Prime Early Access shoppers used the sale to purchase holiday gifts. As we head closer to Black Friday and peak holiday shopping season, nailing your search strategy is paramount - now is the time to make sure your relevant products contain the gifting keywords they need to show up in search as shoppers head to Amazon looking for gifts.
Shoppers amp up their branded searches ahead of the holidays - can you swing competitor searches to your advantage
Across categories we saw high price point branded keywords rank among the most searched for keywords on Day 1 of Prime Day. There were 16% more searches for branded keywords on Day 1 of Prime Day vs the September average, as shoppers shifted their searches towards higher value branded keywords. The top 100 keywords by SFR included:
- Unsurprisingly, six of the top 100 keywords were Amazon products (“ring”, “echo dot”, “fire tv stick”, “kindle”, “alexa”). Numerator data showed that Amazon brands were key players in select Prime Early Access categories, particularly smart home devices, household essentials and consumer electronics.
- Other high price home electronic brands: “dyson airwrap”, “shark cordless vacuum”
- Smart home devices: “philips hue”, “ring camera”, “blink outdoor camera”, “sonos”, “eufy”, “blink”
- Apple products: “ipad”, “airpods”, “apple watch”
What if one of these brands is your competitor? We’re increasingly seeing paid search strategies as a viable way to gain visibility over competitor brands.
For example, a search for “tefal air fryer” turns up a sponsored banner from Ninja:
And speaking of air fryers…
Search rank continues to reign supreme as a key conversion driver
The top 2 keywords on Day 1 were “air fryers” and “air fryers”. Here’s an increasingly crowded category where search rank on unbranded keywords is paramount. For both of these terms, the product in the top spot on Day 1 was this Tower Family Size Air Fryer. For both of these keywords, this product achieved over 20% of clicks and over 40% of conversions on Prime Day 1. We all know it’s important to rank highly in search, but getting in that top spot can be transformative when it comes to sales.
How important is search for conversion in other categories? Here are the categories for which the #1 ranking ASIN had the highest Click Share and Conversion Rate. Nearly 48% of clicks on the keyword “laptop” go to the first ASIN. The click rate is slightly lower for “tablet”, but the conversion rate is huge - the number one ASIN for “laptops” has a nearly 48% click share. This is why we recommend brands have total visibility of search performance across keywords so you know (1) the keywords you need to rank for and (2) the main drivers of conversion so that you convert on those keywords.
How has inflation affected shopper purchase decisions?
According to Numerator, inflation impacted 79% of Prime Early Access shoppers - 29% said they waited for the sale to purchase a specific item on a discount, while 26% passed on a good deal because it wasn’t a necessity. There is some indication in shopper search patterns that some consumers took the opportunity to purchase products that could potentially mitigate rising energy costs. In the Top 100 keywords we found:
- “electric blanket” (SFR: 6)
- “oodie”* (SFR: 20)
- “hot water bottle” (SFR: 31)
- “heated blanket” (SFR: 76)
* Oodie is a brand of oversized blanket that’s become popular with influencers - a reminder that brands need to pay attention to broader trends which could influence your paid search strategy.
The number one Mover and Shaker in Clothing in the early hours of Day 1 was this oversized blanket hoodie.
For brands, Amazon remains a strong e-retailer across markets, but the best tactics for winning on Amazon have changed. If events like Prime Day no longer move the needle for Amazon or the brands that sell on them, different tactics need to come to play. As we head towards the peak holiday season, look for ways to add value without falling into the temptation of deep discounts that only shrink your margins.
- Focus on high-margin products that will have the biggest impact on your profitability
- Review your portfolio - if low-margin products are outpacing high-margin products, then you need to reconsider your retail investment and redirect shoppers towards those high-margin SKUs
- Delist any SKUs that are unprofitable - free up time and resources to focus on your most profitable products
- Consider multipacks and bundles which allow you to consolidate marketplace fees and command higher gross-profit per order
For more Q4 tips and hacks, read our Digital Shelf Survival Guide for Brands Q4 2022.
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