Coronavirus Update: Changes to Prime Day and More
Since last week, the most buzz-worthy headlines speculate whether Prime Day may be delayed. We’ve also noticed fulfillment and advertising trends strengthen and evolve.
As the e-commerce industry navigates this uncertain time, teams at MPS continue to study data and trends. This has allowed us to better evaluate the current situation for our clients. Continue reading for our updated observations of the current climate.
Over the last month, we've discussed how Amazon is now prioritizing the stocking of essential products during the coronavirus outbreak. During the latter half of March and into early April, this trend has continued. Instead of relying on its typical algorithm, Amazon is now awarding the Buy Box to products that can fulfill orders fastest.
Brands affected by this the most tend to be those that ship products via Fulfilled by Amazon (FBA). We've seen this across several of our clients. Those affected have experienced Direct Fulfillment (DF) and Fulfilled by Merchant (FBM) listings winning over FBA or Sold by Amazon listings. Many brands experiencing the same have transitioned to either DF or FBM.
We recommend brands temporarily switch fulfillment methods if it's feasible for their business. Doing so can help avoid bottlenecks at Amazon's fulfillment centers and position products to win the Buy Box. And it could subsequently protect existing sales velocity and momentum.
This is especially important for brands experiencing shipment delays or reduced POs. We've seen delays in delivery dates as far out as May 5 for brands that ship via FBA. Brands unable to transition to DF or FBM are more likely to lose the Buy Box to third-party resellers that can fulfill orders faster.
Prime Day Postponed?
As mentioned, there is speculation from a number of sources that Prime Day will be delayed or postponed. While there’s no official announcement from Amazon yet, this can be expected and is likely.
To reinforce these reports, our team received the following message from Amazon Support this week. The below was in response to attempts to submit Prime Day Lightning Deals for a client:
“I understand that you are getting an error while submitting Prime Day Lightning Deals. To help our teams prioritize high demand products that customers need at this time, we are not accepting new deals through April 5, 2020. All previously submitted deals that are in Live or Upcoming states will run for inventory already in place. Please note that Selling Partner Support does not have further guidance. Also note that recommendations for Prime Day deal submissions are still available, and you may submit those deals.”
With the above in mind, brands can expect Prime Day to take place in August, at the earliest. The marketplace needs time to return to normal and allow brands to stabilize. Due to the reprioritized shipments and changes to purchase orders (POs), Prime Day as we know it wouldn't be possible. Especially since brands with supply chain challenges will likely be unable to replenish inventory by July.
Purchase and Advertising Return Trends
The onset of the coronavirus outbreak resulted in a decrease in online sales for non-essential items. The initial exception was CPG and grocery brands. When consumers began social distancing and experienced shortages in-store, many turned to Amazon.
Now that the outbreak has spanned more than a month, sales and advertising ROI are recovering in more categories. This makes sense as consumers are now shopping online for products they might typically buy in-store.
We’ve noticed the majority of our clients fall in line with the above pattern. And we’re hopeful and expect media and advertising spend, and ROI to stabilize as more of the country hits a peak and decline in the spread of coronavirus.
We understand this is a challenging time for brands and marketplaces. But, we encourage you to view this as an opportunity and to consider how your brand can position itself for long-term success. If you could use the support of a strategic partner to help navigate this uncertain environment, schedule a free consultation. And as always, we’re here to answer any questions.
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