Benchmarking performance is a critical part of scaling on Amazon. In this blog post series, we’re going to share some key data points that will help refine your 2020 marketing strategies.
February 2020 will be remembered as the month that the Coronavirus “got real”, and this panic definitely impacted the Amazon marketplace.
At Bobsled, we’re always trying to win our clients more market share. And in order to develop effective growth strategies, we keep very close tabs on both macro and category-specific trends.
In this blog post series, we’re going to be sharing finalized stats and figures from the month prior that will give context to your brand’s performance on the Amazon marketplace.
How Much Should I Spend On Amazon PPC?
What Happened On Amazon In February 2020?
Here are the most noteworthy Amazon news stories that broke during February 2020. Did any of the following directly impact your brand?
- FBA Small & Light rules are now being enforced. Sellers with products enrolled in this program received an email advising that ineligible products will be removed from the program starting on April 30. Products must now be $7 or less and 10oz or less.
- Vendors get free access to ARA Premium. Vendors started receiving free access to ARA Premium Analytics during the first half of February. This appears to be part of Amazon’s “Brand Analytics” rebranding initiative.
- Amazon rumored to open in Sweden and Poland. Apparently, some brands in Poland have been told by Vendor Managers that a Poland launch is planned, and news was reported that Amazon is negotiating a deal with the Polish national postal carrier (both still speculation). Amazon has also reportedly purchased some land in Sweden - but this has not been earmarked for any specific purpose yet.
- Walmart ramping up their online marketplace offering. There were two big announcements in the last week of February: the launch of Walmart Fulfillment Services for 3P sellers, and news that their in-store and ecomm buying teams would be merging. Vox reporter Jason Del Rey also uncovered a rumored new Prime-like membership program.
- Coronavirus concerns impact the Amazon marketplace. We saw supply chain headaches, sales spikes/slumps, price gouging and black hat tactics. For more info read Bobsled’s Coronavirus guide.
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February 2020 Category Specific Performance Data
Apparel, Grocery & Beauty
Bobsled has high-level experience within Apparel, Grocery and Beauty, and we follow trends within these categories closely.
The following February statistics are compiled from a broad sample of anonymized Kenshoo data; 34 Apparel accounts, 78 Beauty accounts and 58 Grocery accounts (see ‘Count Active Profile’ row of below tables).
Apparel February 2020 Performance Data
|Metric||Apparel Dec '19||Apparel Jan '20||Apparel Feb '20|
|Count Active Profiles||34||35||34|
Beauty February 2020 Performance Data
|Metric||Beauty Dec '19||Beauty Jan '20||Beauty Feb '20|
|Count Active Profiles||77||82||78|
Grocery February 2020 Performance Data
|Metric||Grocery Dec '19||Grocery Jan '20||Grocery Feb '20|
|Count Active Profiles||62||64||58|
Here’s what Stefan Jordev, Bobsled’s Advertising Director, has surmised about the
above data sets:
- Grocery is the only category that has higher revenue in February 2020 compared to Jan 2020 and Dec 2019. Hypothesis: Coronavirus panic, shoppers stocking up on household items? If more people choose or are forced to stay home over the coming months you would expect this trend to continue.
- Furthermore, Grocery’s CPC went down in February compared to January, despite total category revenue growing by just over 26%. This suggests that there’s been a surge in organic demand for grocery products on Amazon.
- Apparel took a major hit for the second month in a row. Even though the highest fall was January compared to December, revenue numbers are even lower in February.
- Beauty brands invest significantly more on Amazon compared to the other two categories: 8.4M (beauty) vs 1.2M (apparel) vs 2M (grocery). The data is from anonymized accounts so a few big spending accounts could be skewing the data set, but it’s still an observable pattern.
What Does This Data Mean For Brands?
Figuring out how to adapt to the Coronavirus crisis should be top of mind for all brands selling on Amazon.
- Get clear on your channel priorities. Brands with serious supply chain issues will have to make hard decisions about how to allocate dwindling inventory between brick-and-mortar, online marketplaces and their own ecommerce channels. Which sales channel is the most important for your brand?
- Follow Amazon’s Coronavirus Account Management Guidelines. Amazon issued a Coronavirus notification for sellers, outlining recommended best practices in respect to maintaining account health. Read it here.
- Think of the long-term future of your Amazon presence. Even short-term stock outs can undo years of hard work in respect to your Amazon presence as competitors with inventory will gain valuable market share and see an improved Best Seller Rank (BSR). Think about different ways you can “keep the lights on” despite supply chain crunches.
“It’s important to understand that being out of stock on Amazon costs more than the missed sale,” says Bobsled Project Manager Jordan Ripley.
"Continued product unavailability has long-term impact that outlasts merely the time that the listing is inactive. Understand this tradeoff - allocating inventory to other smaller non-Amazon channels may save you profitability in the short term, but it also could dig you into a hole when you try to regain your BSR is readily available again."
- Jordan Ripley, Bobsled Project Manager
Need More Insight?
We hope you enjoyed the February installment of our monthly data recap series! To get our January 2020 performance data, click here. The next installment in the series will be a Q1 recap, which will go live at the start of April - sign up to our mailing list so you don’t miss a thing.