The Covid-19 pandemic has altered the face of the ecommerce industry and shopper behaviour. However, despite the new challenges that retailers face, the current situation provides sellers with massive growth opportunities. This new landscape is particularly true for those who sell through Amazon.
From board games to beauty products, bidets, baby wipes and beyond, consumers rely on Amazon’s services more than ever.
In March, demand increased so much that Amazon suspended shipments of all non-essential products to its warehouses.
While that order has since ended, Amazon sellers still face several challenges that could make or break their businesses. For that reason, many are strategizing on how to focus their retail marketing efforts during the Covid-19 crisis.
To help merchants navigate these uncharted waters, we will explore six ways that sellers should pivot their Amazon strategy in the next few weeks and months to continue to thrive during the pandemic.
Let’s get started.
The massive spike in Amazon’s activity has created substantial burdens on its fulfillment network. As noted earlier, the company temporarily halted shipments of non-essential items to focus on shipping only the most important products.
Although Amazon has since lifted these bans, it is still limiting the number of items sellers can ship into warehouses to prioritize certain products.
The fact is that the Amazon shopping surge brought on by COVID-19 has dramatically increased sales figures for a multitude of sellers. On the other hand, others have put a hold on their marketing efforts because they’ve sold out of items along with Amazon’s restrictions.
As a result of this dynamic, and a sellers’ ability to maintain inventory levels, merchants may need to decrease their bids on Amazon adverts. The wisest thing to do if a retailer is out of certain popular items is to pause campaigns for those items temporarily.
Fortunately, Sponsored Products and Sponsored Display Ads will automatically pause when Amazon detects that an item is out of stock. Moreover, these campaigns will automatically resume when the products become available again.
Similarly, Sponsored Brands will also pause automatically when the promoted items reach two or less in availability.
However, the chances are that all of a retailer’s product listings will not see an equal uptick in sales. In fact, certain items have likely seen a dramatic decrease in demand.
This demand difference is why merchants must employ a wholly different marketing strategy.
Given that retailers will have to pause campaigns on unavailable items, it is wise to invest more heavily in campaigns for products with a surplus.
While merchants are typically looking for ways to lower their Amazon ACoS, the chances are that these campaigns will have a higher ACoS because sellers will want to set higher bids, thereby providing the adverts with the broadest reach possible.
Additionally, since these items have become less desirable, retailers should develop a strategy for each product they need to move off their shelves. The higher ACoS target will allow marketing teams to test and experiment with methods for increasing the sales of these products.
Given that it could be challenging to move certain products as sales for others increase dramatically, it could be beneficial for brands to hire a dedicated Amazon PPC management team. These individuals specialize in producing profitable Amazon advertising campaigns and have the necessary knowledge to optimize promotions effectively.
When Amazon suspended shipments of non-essential items to its warehouses, it significantly impacted many merchants’ sales.
Moreover, Amazon’s strategy to prioritize products coming into its fulfillment centers is as follows:
"While we will continue prioritizing the products we can receive beyond April 5, we are now able to broaden the list. Given our constrained capacity, we are doing this on an item-by-item basis. We have updated the restock inventory page and restock report in Seller Central so you can check which products are eligible for shipment creation."
The fact of the matter is that this development has significantly reduced retailers’ potential earnings if using Fulfilled by Amazon.
As a result, if those merchants cannot send in their products to Amazon warehouses, they cannot generate revenue. Therefore, it is vital to consider alternative fulfillment methods.
However, Seller Fulfilled Prime is only available to those who have previously qualified for the program because Amazon is not accepting new applicants at this time.
Therefore, those who wish to circumvent the current restrictions on FBA will need to convert their listings to FBM by selecting the "Change to Fulfilled by Merchant" option in the Seller Central Inventory dashboard.
Retailers must have the ability to store and ship all of the orders that come in through the marketplace if they opt for this approach. If this is not possible, consider seeking out a third-party logistics company that can handle all of the storage and shipping requirements on time.
At the beginning of 2020, the world’s largest sporting goods company, Nike, cut ties with Amazon, leading many to speculate that this event could mark the beginning of Amazon’s "apocalypse." However, it wasn’t just this single happening that caused such contemplation. Other sellers who have opted out of the marketplace include Ikea and Birkenstock.
Given that brands are jumping ship for other marketplaces, combined with the product restrictions currently in place, sellers might consider selling their products through different platforms such as eBay or Alibaba.
Those who rely solely on Amazon for sales place themselves in an incredibly vulnerable position, as many have found out with the recent warehouse restrictions.
Therefore, merchants should diversify their sales efforts by adopting alternative marketplaces, so they don’t rely solely on one company for revenue.
Those who integrate other marketplaces into their sales and marketing efforts stand to profit during the current Amazon bottleneck and will be safer in the future.
Right now, scores of sellers are slowing their advertising efforts to conserve resources and avert potential financial ramifications that may come as a result of Covid-19.
While this may seem to be the right approach, it is only a surefire way to shrink sales. As it stands, digital ad prices are slumping, providing retailers with the opportunity to maximize their reach at rock-bottom prices.
While it may seem counterintuitive, retailers should invest heavily in advertising campaigns and marketing strategies. History has shown that doubling down on promotional efforts during downturns can be a robust strategy to beat economic recessions.
Therefore, while prices are low, sellers should focus on increasing their clicks and conversions through pervasive advertising efforts.
With folks at home, shoppers are consuming more content than ever. Increased content consumption gives retailers a tremendous opportunity to drive traffic to their websites and their Amazon product listings.
By engaging customers with valuable, informative content that aims to pull people from social media, Google’s SERPs and other popular locations across the web, retailers can continue to boost their sales through the marketplace.
Speaking to people’s current pain points is the key to creating winning content.
Since consumers are trapped in their houses, they are cooking, exercising, playing games and engaging in activities that they wouldn’t have explored during different times.
Therefore, sellers should frame their content to address customer frustrations by providing solutions with their products.
Covid-19 presents both challenges and opportunities to retailers. Depending on your outlook, market challenges can be a time to learn and grow.
Be the eternal optimist. Utilize the insights listed above to adjust your Amazon sales strategies and keep your business thriving throughout the current crisis.
Ronald Dod is cofounder and chief executive of Visiture.com