Shafique Niazi

Associate Director, Amazon

How Non-Essential eCommerce Brands on Amazon Can Keep Moving Forward

If you’re what is deemed as an “Essential” brand by Amazon (as detailed in our previous article), then this article is probably not for you. However, if you are an Amazon seller deemed “non-essential,” then this article will help you determine:

  • Signs that you’re moving out of the COVID-19 dip;
  • Steps to take to ensure overall business health & expectations are positive; and
  • Amazon selling strategies to get back on track for 2020.
 

Knowing When to Accelerate

There are a few key signs that may indicate upward business trends. These signs are fairly straight forward; we’re looking to see if total weekly revenue is reaching back up to the average before the pandemic.

Amazon revenue between January and May 2020

In the above graph, you can see 3 distinct periods:

  • Pre-Pandemic (January 1 - March 15): The “business-as-usual” period, with slight downward trends and sharp upward spikes, where promotions and advertising work together to drive sales;
  • COVID-19 Pandemic (March 15-March 30): The lull where sales trends fall below the average and a surge in sales following COVID-19 fears.
  • Post-Pandemic (March 30+): A release of pent-up customer intent. A brand moving out of COVID will find that not only are they returning to Pre-Pandemic levels of revenue, but may also see a continued upward trend as customers look to purchase their “wants” vs their “needs.”
 

Before You Accelerate, Check Your Pulse

Now, to some marketers and sales analysts, the above graph may scream that it’s time to move forward, full-steam ahead. To them I offer a word of caution—and a recommendation to step back. There are a few checks we must make sure we understand before we put our foot back on the gas, such as:

  • Inventory Health: Do we have the right inventory (or inbound inventory) to maintain our business, let alone sustain a big promotion or ad push?
  • Amazon Delivery Dates: Are our shipping dates and time of arrival aligned back into a 2-3 day delivery date? If not, we may need to diagnose why and what can we do to resolve these.
  • Profitability: Are we still profitable with our current sales mix? Is our post-COVID product sales the right mix when it comes to our profitability, or do we need to find ways to change our current sales mix?
  • Goal Pace: Are we on pace to our annual goal or have we re-flighted due to the impacts? If we’ve re-flighted to generate a heavier Q3, does that still make sense and is it feasible given the above points?
 

Accelerating out of COVID

Ok, are our products in stock? Will they be delivered on time to our customer’s expectations? Is our current product mix profitable? Did we reset internal/external expectations around our total sales goal pace?

Great! Now we can finally talk about what the role of advertising and promotion can have on accelerating to and meeting our goals.

Generate High Intent Ad Visitors with a Product Focus

There will be a push to activate all marketing as it was before across all products. While this could work, this may not be the best use of our finite marketing dollars. Instead, let’s look to generate a product focus on what are our most important products and how can we ensure they’re getting the right views.

  • Hero Products (and Product Lines): Let’s make sure that, as we reactivate and scale, that our first focus is driving customers to the products they most purchase. If we can maintain and incrementally grow sales on our Heroes, the rest of the pieces will start to fall into place.
  • Growth Products (and Product Lines): From there, our product team(s) have spent a lot of time coming up with new products that with either (a) fill certain customer niches or (b) replace existing product lines. We need to make sure that those products are given their time to shine as well. This means that as we generate focus, we need to make sure these Growth Products are also incorporated into our marketing plans.
 

High Sales: Use Promotions to Spike Sales & Adjust to Goals

With Prime Day moving to late Q3/early Q4, that summer bump that we’ve all expected will no longer be there. This means to stay on flight to our goal, we will need to evaluate our promotional strategy and determine if we have funds available to generate sales spikes by adjusting our margin downwards.

While it isn’t the healthiest way to grow, this could be a great way to get customers into your sales cycles and be able to capitalize on them post-sale for other opportunities.

Low Funnel: Evergreen Search Advertising Strategy

Our first step is to capture the highest intent traffic we can. That starts with Amazon’s Sponsored Ads. We need to make sure the users who are actively looking for our products within our category can find us. By focusing our Sponsored Ads strategy on generating incremental Non-Brand/Category revenue, we will bring new customers into our sales cycle.

Low-Mid Funnel: Evergreen DSP Retargeting & Cross-Sell Strategy

To cap off the bottom to mid-funnel of the sales cycle, we should be using our DSP advertising strategies to focus on funding the following tactics:

  • Re-engage our PDP visitors who do not purchase with dynamic DSP ads;
  • Re-engage our PDP visitors who did purchase with cross-sell opportunities to improve CLTV; and
  • Take advantage of OOS/Shipping Delay Competitor products by using Amazon’s custom PDP retargeting audiences
 

Mid-High Funnel: Leverage Amazon’s Managed Services & High Funnel DSP Tactics

The above tactics can help you capitalize on consideration and high intent signals, however, those tactics experience diminishing returns as scale is identified. This means all your high ROAS/low tACOS% tactics will eventually exhaust themselves.

As marketers, we need to prepare and tell the right stories to our stakeholders to set expectations that, eventually, we will need to go upstream to drive continued growth. That’s why Rise recommends generating an Evergreen strategy to re-engage demographics that look like your customers, whether that’s contextual, in-market or demographic targeting.

Additionally, Amazon offers a wide variety of Managed Service advertising solutions—items like Amazon Live, Treasure Truck, Kindle app, School takeovers (eventually), and more—that can help you find customers where you may have never looked before. A partnership with Rise means a dedicated, experienced team in your corner vetting potential managed service solutions that could help us boost our revenue goals.

If Rise can be of assistance in any way during this time, please reach out.

06/16/2020 at 07:44

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