Simple Strategies for Maximizing Your Returns
Prime Day is upon us. The single biggest e-commerce event of the year so far on the single biggest e-commerce platform in the United States to date. So no pressure, then. Actually, yes, lots of pressure – and with good reason. Prime Day sales in 2018 exceeded $4 billion, up 66 percent from 2017*. Technical issues at the beginning of last year are thought to have cost Amazon and brands $70 million in additional sales. Translation, it’s big time and all Amazon vendors need to be ready.
As your team prepares back end operations and front end marketing, here’s a quick cheat sheet on things to think about.
Is Prime Day for Me?
Few brands ask this. They get carried away by the sheer number of potential eyes on their products and clicks to checkout. But it’s important. Not all brands and not all products will succeed with Prime Day promotions or strategies. Those that do are typically either high-search items (think consumer electronics) or mass volume products that consumers need on a regular basis. Deals on either can move the needle quickly either because consumers are searching for the golden ticket item or they’ll add a staple item to a basket without thinking too hard. If your product portfolio doesn’t fit either of these models, it might be better, in the long run, to save your deals and resources for the Thanksgiving sales window.
Work Backwards, Starting with Inventory
Prime Day works only with brands and products stocked at Amazon fulfillment centers, so it’s important to start here. How much time do you need to ready your products for delivery and can you meet Amazon’s deadline? Once you understand that, it’s also worth thinking through other details. Do you expect to sell through all of your inventory? Will you have a surplus left over at the fulfillment center? If so, calculate the short or long term storage fees Amazon will charge you and understand the worst case scenario and be prepared for it.
Prepare for Volume: Can You Meet Sell Through?
All of the attention, member anticipation, and marketing brands do typically drive much higher volumes of product sales than at any time other than Black Friday and Cyber Monday. While you’re reviewing logistics of shipping, consider bandwidth. Will you sell through your available stock? Can you rush-ship additional product to customers – or may they experience delay and disappointment, which in the long run can hurt your brand.
Creative Review: Page and Product Optimization
If back-end issues are checked off, look at the front end. Are your promoted products clearly displayed? Ensure you are using the correct keywords and phrases that consumers use to search for your product. It’s worth reviewing and refreshing these for tent-pole retail moments like Prime Day. Pages should be organized visually but optimized for both user experience on your store and ease of purchase. It’s an intensive review process but well worth the additional steps.
Brand Promotion versus Loss Leader Sales
One key issue vendors struggle with is profit versus promotion. In other words, will I actually make money selling a large volume of discounted goods? If I break even or even lose money, is the spotlight from widespread consumer attention worth it for my brand? Brands can actually lose money during Prime Day but experience a halo effect of increased sales for up to two weeks or more after the fact from the increased traffic and awareness they generated. It’s a difficult equation to calculate and one that may require expert help.
Prime Day is Really Prime Month: the Importance of Data Analysis
Many sellers focus on the on-ramp: the readiness, preparedness, and strategies to make Prime Day work for them. And once the event is over, return, in a way, to business as usual. But it’s critically important to spend time afterward reviewing successes and failures. The data can tell you a lot more than just sales volume: which promotions created action, who bought what, when, how much and more. Investing the time to analyze everything and understand the strategies that worked with your consumers can help model an even more successful run up to Black Friday and Cyber Monday – which, in turn, can teach you a lot for next year’s Prime Day. The circle of life, or commerce, should we say.
If you need additional insights, consultation or help with any Prime Day issue talk to one of our Channel Key team members.