Prime Day 2020 is only a week away and promises to look very different from previous years. With a Q4 Prime Day serving as the start of the holiday shopping season, many brands and agencies are already wondering how they can prepare. In a recent interview, we spoke with Chris Mole and David Bradley from Molzi, a full-service Amazon agency, to discuss how they’re approaching Prime Day this year.
Given inventory issues that affected some categories earlier this year, do brands need to plan differently for Prime Day 2020?
Ever since Prime Day was postponed to Q4, the question for eCommerce advertisers was: are consumers still going to wait until Black Friday or will they take advantage of this earlier sale? Molzi surveyed 1000 Amazon consumers and found that 80% said they would make a purchase on Prime Day if it were held in October.
One of the reasons for this is the delivery delays and out-of-stock issues many brands saw in March and April. After experiencing challenges getting items earlier in the year, consumers are thinking they should make these purchases early instead of waiting for Black Friday or later in the quarter.
This is why it’s important to prepare inventory for the holiday season and have a fall back fulfillment solution if necessary. In the same survey, 57% of consumers said confidence in delivery was the number one determinant of who they would purchase from online.
Timing: when should you update your brand store? When should you turn on retargeting, and how long should it run?
Ideally you should give yourself as much lead time as possible to get sufficient data. Having the lead up time of at least a week to get the pages uploaded and updated, to gather and ingest data, and to apply these findings into advertising content and strategy is crucial.
In terms of retargeting, giving yourself enough time to build that brand messaging and storytelling to consumers via paid media is crucial. Running retargeting campaigns ahead of Prime Day will also help you identify customers who can generate high value to your brand to target. Conversely, identifying low value, non-converting customers early allows you to suppress those segments in advance of Prime Day to maximize your media investment.
If brands are still seeing heightened organic sales, should they be spending on advertising?
It’s great to see organic sales doing well but advertising has its place. Locking in your brand position on Amazon ensures competitors aren’t stealing your space. This is a crucial part of the eCommerce ecosystem that is incredibly important for brands to protect.
Advertising also helps you control and improve brand visibility throughout the entire user journey, not just within Amazon but also off-Amazon ecosystems. Use advertising to make sure you have visibility and narrative storytelling end-to-end.
It is all about incrementality and driving additional sales that you wouldn’t achieve through organic activity. Paid advertising has proven its worth when it comes to the combination of DSP and Paid PPC activity.
Prime Day is essentially going to kick off the holiday season this year. How can brands be strategic with their deals?
The most important thing for this year is to not waste inventory. A lot of brands are coming out of Q1/Q2 with supply chain issues because they weren’t expecting the surge of sales in that period. If you are just getting your supply chain back on track, don’t present deals just for the sake of deals. If you have products where you think you’ll sell out, you don’t need to focus on deals for those products.
The other key area to consider is how you are going to link the deals you do with Prime Day advertising. We did a test on Prime Day last year where we paired various deals with and without advertising. We found that deals that weren’t supported by advertising saw little success and some actually saw a decline in sales. Advertisements that were not associated with a Prime Day Deal saw a small uplift in sales. Deals that were supported by advertising saw the best performance with some seeing triple digit growth.
If you can’t afford to do deals and advertising, our experience is that it is better to continue an optimized advertising strategy rather than getting carried away by trying to do deals just for the sake of it.
Cross-sell strategies have always been an important part of Q4. Will that continue this year?
It is a prime time to maximize cross-selling opportunities. The brand halo effect is really strong. Being able to drive users to your brand store page can be used to explore the product offerings within your portfolio.
One of the great results of these cross-selling strategies is gaining insights into your products and advertising from a media and content perspective. Brands want to be restrictive with their media investment this year. Being able to leverage metrics and data you get from the brand halo effect is crucial and this time of year really brings to light the effect of advertising and provides data on how your overall strategy can be improved. How do I identify products to push more from an advertising perspective? How do I identify products we need to push more from a content perspective? Cross-selling data is huge for this.
While Amazon Prime Day 2020 offers an excellent eCommerce opportunity on its own, Chris explains that they also see this as a great trial run of the holiday shopping season. Use next week to test deals, see which are selling out and which are slower, and look at your competitor strategies. Taking the tips above into account next week and taking the insights you gain from Prime Day into the rest of Q4 will ensure a strong finish to the year for your brand.