Tis’ the season for holiday planning!
Although the end of summer doesn’t seem synonymous with holidays, brands across e-commerce sites need to plan now to be prepared for a Q4 that will be far from ordinary.
Shifting consumer shopping behaviors as a result of the lingering pandemic, along with supply chain issues due to increased demand, will result in a longer holiday shopping window. Brands should anticipate consumers shopping early again this season in hopes of avoiding the shipping delays and inventory shortages that impacted last year’s holiday season.
Below we cover key industry trends that will impact this Q4 and provide tips for how brands can succeed on Amazon.
Holiday Shopping Season Trend
While rumors continue to swirl around a second Amazon Prime Day in October, Amazon has yet to confirm anything and there haven’t been any recent signals that they are looking to run a large promotional event earlier than Black Friday. Amazon recently sent out deadlines for deal submissions for 2021 holiday planning which end September 17th. The deadlines they provide include key Q4 dates with Black Friday and Cyber Monday being the focal point for large promotions.
Regardless of a peak event happening in October or not, brands should still anticipate and prepare for another early shopping season with consumers starting their research in early October. Expect conversions to happen earlier than they did in the past as consumers want to avoid shipping delays and grab goods while supplies last.
With many major retailers (i.e. Walmart, Target, and Best Buy) already announcing that they will be closed on Thanksgiving, we expect to see more enticing online deals over an extended period. Gone are the days when brands run deals on a single day or two. Instead, we expect to see deals run the entire week of Black Friday and continue throughout the week after as well.
DA TIP: Save your deals for Black Friday/Cyber Monday and use coupons ranging from 10% to 15% off leading up to BFCM (this should help increase your organic rankings). Use coupons with larger discounts during December to drive conversions during peak traffic periods.
Consumer Shopping Trends
This is also an opportunity for brands to target consumers early and often through social media advertising, as social apps are increasingly driving discovery, inspiration, and direct purchases. According to Grand View Research, it’s estimated that social commerce represented 11% of global retail e-commerce revenue in 2020, resulting in $474 billion. It’s not just paid social advertising that is fueling this astounding number – case in point the rapid rise of TikTok and its short-form video content. A survey from Ad Week earlier this year found nearly half of its users on the platform had purchased an item as a result of seeing it featured on the platform.
Aside from where consumers are shopping, it’s also what they will be shopping for that has some brands anticipating a stellar Q4. With more shoppers looking to travel, socialize, and spend less time at home, Salesforce expects to see an increase in demand for luggage, sporting goods, apparel & accessories, and home dining supplies.
DA TIP: Brands should look to begin targeting consumers on social platforms in late Q3 with awareness campaigns and then re-target more heavily during peak holiday time frames to ensure their products stay top of mind.
With brands anticipating the early start to the holiday shopping season, the effects are already being felt in a costly way for retailers shipping goods internationally, with the average price to ship a 40 ft container having nearly quadrupled from a year ago (according to the Wall Street Journal). In addition, bottlenecks at ports have caused even further delays. The skyrocketing costs of importing goods may trickle down to consumers, as we anticipate brands may look to pass on the rising costs to shoppers through increased retail prices, especially in the toy category.
While some smaller Amazon sellers may struggle if they are unable to pay the exorbitant cost of importing goods, other individual Amazon sellers will have an advantage when it comes to the control they have over pricing their goods and the ability to increase prices as needed. Vendors on Amazon don’t have the same level of flexibility, nor do brands that sell to other brick-and-mortar retailers and will have to go through negotiations.
Whichever the case – expect to see increased retail prices for products this Q4 and high sell-through rates early on. We may see many top toy products sell very early in the shopping season due to the port delays and limited availability to get goods on the water in time. We may also see a large peak early on followed by a secondary peak as goods may become available at various times throughout Q4.
DA TIP: Ensure you are paying close attention to margins when planning Q4 promotions on Amazon. Consumers will be expecting promotions and watching closely for them throughout the season – consider your base MSRP and how steep you need to discount an item’s price to drive more sales. Test various discount amounts and types NOW so you have data on how much you have to discount to hit various sales lifts.
Bringing It All Together
While 2020 brought an extremely unique holiday season, 2021 will bring its own challenges and wins. With no absolute way to predict the future, we must use key market indicators to prepare for a successful Q4. One thing we know for sure is that consumers are ready to shop and eCommerce is now fully immersed in holiday planning and shopping. Brands’ roles are changing and they now must take on the large task of driving consumers to their products.
Formulate a clear and detailed action plan for your Q4 advertising strategies. Don’t just focus on Amazon advertising – look for ways to bring the consumer directly to your page and ensure consumers are aware of your brand before they are ready to purchase. Use Q3 wisely as a time to prep and test out different strategies whether it’s promotional, DSP (Display), social, product page updates, or any other strategic initiatives. Plan for an early shopping season and be able to shift strategies if needed.
Direct Agents is a full-service agency that has experts in not only Amazon but social and search as well. This allows our team to understand and strategize various advertising strategies for our clients. Our team also works closely with our clients to update SEO, A+ content, and Amazon Brand Stores before any peak seasons. We create checklists and timelines to ensure we are working towards a fantastic Q4 – reach out to our team with any questions or needs to make Holiday 2021 the best one yet!
Lauren Stobbs (Account Manager)
Emily Lease (eCommerce Strategist)