The COVID-19 pandemic has impacted the health, finances, and life of the entire world. From heartbreaking losses to small lifestyle changes like wearing a mask, everyone has been affected.
The effects of the pandemic have rippled through nearly every aspect of life, and even behemoths like Amazon weren’t immune to the changes that came with a global pandemic.
Amazon’s annual Prime Day was moved from July to October — an unforeseen change that had many sellers wondering, “How will this affect my Q4 sales? With these large sales days encroaching on holiday shopping, will my business see fewer sales closer to Christmas?” The answer is no.
A brief Prime Day 2020 recap: this year was Amazon’s largest sales day in history, with sales of $10.4 billion — exceeding last year’s total Prime Day sales by over $3 billion. Small and medium-sized businesses, according to a press release from Amazon, generated more than $3.5 billion over the two days.
For Blue Wheel clients, unsurprisingly, stats were up across the board. Compared to the September daily average, sales on Prime Day 1 were up 235%, and impressions were up 160%. ACoS was down 5.79%, and ROAS was up 6.15%. This is to be expected, as people browse and click to find the best deal. In addition, conversion rates increased from a September daily average of 13.3% to 18.2% on the first day of Prime Day!
But how did Prime Day affect the rest of your Q4? What can you expect in this unprecedented holiday season? Our resident Amazon experts are here to give their predictions about what to expect in the last few months of 2020, which traditionally have been extremely profitable months for brands.
Prime Day for Yourself, Black Friday for Gifts
In general, shoppers tend to buy for themselves on Prime Day, and wait until Black Friday to shop for others. We know this to especially be true when Prime Day is in the summertime, but many were wondering if the same would apply with the sales being so close together.
Our Amazon Amazon Advertising Team Lead, Casey McRae, predicts that this classic shopping mentality will likely still apply this year — even though the two shopping holidays are only weeks apart. Because Prime Day was in October, before many people start holiday shopping, Black Friday and the following weeks will still draw in large sales.
With COVID-19 cases rising in the United States, in-person shopping will likely be impacted as shoppers choose to do their holiday shopping from the safety of their homes. “This year, fewer people are going to be standing in long lines in stores on Black Friday, so we’re expecting the market to still be strong as people transition to online holiday shopping even more,” says McRae.
In addition, there’s a smaller window between Black Friday and Christmas this year, making the holiday shopping season even shorter than usual — likely boosting sales. So, once Black Friday hits, people have the need to buy as the holidays creep closer.
Restocking and Shipping Concerns
Dharmesh Mehta, Amazon’s VP of Customer Support said “Every holiday puts additional pressure on each country’s transportation networks– this is an industry-wide occurrence. However, the pandemic crisis has the potential to increase the strain. As a result, we will encourage customers to do their holiday shopping earlier. We also encourage you to send inventory to our fulfillment centers, schedule product launches, and run deals and promotions earlier.”
Earlier in 2020, Amazon experienced severe inventory restocking delays due to the increased amount of sales during the beginnings of the COVID-19 pandemic. Some brand’s products were shipped to their nearest Amazon warehouse and took 3 weeks to be checked in and restocked.
Amazon had mostly resolved all of those issues by Prime Day, but now the question remains — will these issues arise again as brands rush to restock after a record-breaking Prime Day, and will items be restocked in time for the holiday rush?
The deadline to create inventory for Black Friday was the first week in November. Amazon preemptively notified sellers of this deadline in the hopes that they would be able to restock their inventory in time.
In addition, Amazon will likely move up their final shipping date to get gifts in time for Christmas. In previous years, shoppers could order as late as December 22 and still receive their orders by Christmas Day, but Amazon will likely move that ahead by a few days to accommodate for shipping delays.
If your product is giftable, it will more than likely perform well during Black Friday. Regardless of how your Prime Day sales were, you will likely still see high sales during the holiday season leading up to December 25.
Giftable products span a variety of categories, but toys are one of the most popular gifted products during the holiday season. One of our toy-based clients saw a 531.33% increase in sales on the first day of Prime Day versus their September daily average. Brands like this will continue to see increases in sales as the holidays approach.
Grocery is the last frontier for Amazon to conquer — and they’re already making waves in that vertical. Our prediction? This category will be hit or miss for the holidays. Those who are avoiding shopping in-person might prefer to stock up on holiday food online, but it’s also important to note that many people are foregoing large, traditional holiday gatherings with family and friends for safety.
In addition, with COVID-19 cases on the rise, many people are choosing to grocery shop online through Prime Pantry. Recently, the selection has been sparse, much like it was in March of this year. So while cyber weekend itself might not cause a huge bump in sales, a rise in COVID cases will likely cause people to turn to online grocery shopping — and could result in some restocking issues as well.
Lastly, some grocery items also make good holiday gifts, such as tea or candy, while others likely aren’t as giftable. One of our grocery clients that sells giftable food products saw a 34.19% lift in sales on the first Prime Day from their September average daily sales, proving that these items are increasing in popularity on the site.
The beauty industry traditionally does very well during the holiday season, as makeup and hair care products are great gifts for friends or family. Items that have been increasingly popular during quarantine, such as skincare and face masks, will also make good gifts for holidays and will likely see sales increase during this season.
One of our clients in the beauty space saw a 1270.41% increase in sales on the first day of Prime Day versus their September daily average — a markedly large increase.
As a kid, you probably hated to get clothes for Christmas — but as an adult, you likely don’t mind it so much! Apparel traditionally does well during the holiday season, as people look for gifts but also for new clothes to wear to family gatherings and parties. Similar to the grocery category, the lack of social gatherings this year could potentially impact Q4 sales of apparel outside of athleisure.
One of our clients in the athletic clothing space saw a 153.29% increase from their September average to the first day of Prime Day, proving that comfortable clothing continues to be a popular purchase.
Blue Wheel’s Recommendations
- You should still run deals on Black Friday and Cyber Monday. Shoppers are specifically looking for discounts during this four-day period. We’ve found that discounts of 15% do well on Amazon.
- Prepare for sales increases after Black Friday. Last year, many of our clients’ highest sales day during Q4 occurred after Cyber Weekend — and the same will likely be true this year as more shopping is done online.
- Prepare for shipping delays. Because Amazon is encouraging consumers to shop earlier for Christmas, combined with media reports of carrier slow-down, people will likely start shopping online a little earlier this year. You may want to think about moving your holiday promotions up.