Adjusting your Amazon strategy during COVID-19

It has been almost a month since the UK went into lockdown due to the coronavirus and in that time a lot of changes have happened to Amazon’s marketplace. So much so that selling on Amazon during this period is like selling on a completely new marketplace altogether. 

Businesses are having to deal with selling to a virus-conscious demographic that has also become increasingly restricted to national borders due to isolation. Since the marketplace has changed so drastically from what can be bought to how to find products, your Amazon strategy must be adapted if not replaced with a new one to parallel the changes if you want your account to be successful.

What has changed on Amazon’s marketplace?
Changes to Amazon purchase orders for vendors

When the pandemic began, Amazon placed a pause of purchase orders on all non-essential items so that they could prioritise what the stock they wanted to hold in their fulfilment centres. Products not considered household staples, medical supplies, or other high-demand products were directly affected by this decision. The same was implemented with Amazon’s FBA programme for sellers where only certain ASINs were being accepted. The following categories were noted as essential items:

  • Baby Products
  • Health & Household
  • Beauty & Personal Care
  • Grocery
  • Pet Supplies
 

However, since Amazon has altered/strengthened their logistics systems, Molzi has noticed a small increase in PO’s for non-essential categories such as jewellery and home & garden. As well as a more relaxed acceptance for FBA products. However, the acceptance of non-essential products is still lower than pre-COVID-19, so FBA sellers might want to consider FBM and SFP as alternatives during this time.

We suggest being realistic during this time and consider what results you believe are possible for you. Knowing what to expect will allow you to better understand how to manage your Amazon account and make decisive decisions which will better your listings in the long run.

Find out more about how COVID-19 has affected account management.

Shifts in traffic and conversion and the impact on supply chains

Over the last month, Molzi has kept an eye on the significant increase in traffic and conversion on Amazon for all categories. From it, we have noticed significant search term fluctuations and spikes in traffic. Health & personal care search terms, as expected, rose phenomenally when the pandemic began and has started to dip more recently, whereas other nonessential items have begun to rise in its wake.

This ebb and flow of traffic and conversion have impacted supply chains massively. Forecasting is fundamental during this time as brands determine how much stock they need during this time but also after quarantine. Brands with supply chain constraints should expect to run out of stock if they have not already. The uncertainty of how long self-isolation and quarantine may last also means planning inventory for the future is almost impossible. Brands must be flexible in that they must be able to make changes as soon as possible to their inventory to avoid their business taking major losses.

The impact that coronavirus has had on advertising on Amazon

The coronavirus hasn’t just increased traffic to ASINs but has also changed the way in which consumers are looking for products too. Our advertising team have noticed that since the COVID-19 pandemic started, the usual keywords that they had been using for our clients were suddenly becoming increasingly irrelevant. People weren’t searching for products the same way they had been. For brands selling essential and in-demand products with strong supply chains, there has been a huge increase in advertising related conversions and a decrease in the average cost-per-click but an increase in click-through-rates and conversions, leading to lower ACoS.

Due to isolation, we believe that DSP and especially OTT ads will further entice audiences to buy product on Amazon as people are stuck at home. Since consumers will be watching more TV or using their computers much more, OTT & DSP ads will be able to get much larger impressions with very little competition.

Find out more about how COVID-19 has affected Amazon advertising.

How your brand can adjust its Amazon strategy during the coronavirus outbreak

While the coronavirus will create unique challenges for different categories, there are steps to take now to protect your brand and potentially take advantage of increased traffic:

  • Monitor your POs weekly to make sure all best selling ASINs are being bought
  • Analyse on-hand inventory and sell-through rates to avoid running out of stock
  • Adjust advertising and marketing spend to focus on top sellers and reduce spend on low demand items
  • Vendors should consider Direct Fulfilment
  • Sellers should consider Fulfilled by Merchant or Seller Fulfilled Prime
  • Assess the current climate to determine how important your products are before forecasting
 

If your product is not receiving as much conversions during this time due to any number of reasons out of your control, it is a great opportunity to optimise your account. Improve ‘retail readiness’ and tackle any Amazon issues that you have not had time to fix yet. This way, your ASINs will be fully optimised once lockdown is lifted and Amazon’s marketplace (and consumers) return to the norm.

The short and long-term effects of the coronavirus on Amazon’s ecommerce

The short term effect of COVID-19 will vary significantly depending on the product. For example gym equipment, home barbershop kit, gardening gear and entertainment for kids are all really well placed to see significant growth during the lock down period. However, people are less likely to be buying fake tan, fashion wear, swimwear, suitcases or camping equipment. However this won’t last forever! Amazon priorities will change after the pandemic ends and so too should your Amazon retail strategy.

“It is important to remember that consumers have not forever changed what they want to spend money on, but the current environment has forced a (hopefully short term) shift in priorities. Brands will need to be aware of this and plan for what behaviours they may see post lockdown. Will everyone still be buying hand sanitiser and hair clippers (I suspect the home grooming routines won't last for most), or will they be booking holidays and buying swimwear as soon as they can?”

Charlie Merrells, Molzi Chief Strategy Officer

The long term effects that forced isolation may have on Amazon and ecommerce have yet to be determined. However, Molzi CEO Chris Mole and Molzi CSO Charlie Merrells have some ideas in relation to how to best adjust your Amazon strategy post-lockdown. Find out what they suggest by watching Molzi’s webinar discussing Amazon retail after COVID-19.

Don’t let coronavirus halt your Amazon sales

There are many uncertainties when it comes to the coronavirus including how businesses will cope under the pressure of national shutdowns, but experts claim that COVID-19 will still plague the globe until at least the summer. This means brands must think about how they will avoid bankruptcy until then.

At Molzi we understand that to be successful, we must look at the positives found within such horrid times. One such positive is that of increased Amazon sales. Amazon is the perfect avenue for some brands to use as a go-between for them and the self-isolating consumer. Find out how our account management team can help you make the most of such a drastic situation today. Contact us to get a free audit for your brand today and discover what we can do for you.

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