January 25, 2021
Amazon Promotions Strategy 2021: Evergreen & Major Shopping Holidays
The holidays in 2020 on Amazon were like nothing we’ve seen before. In 2021, it’s looking like things will change again for retailers. Indications are that Amazon is altering its approach to holidays this year, even for non-Q4 holidays. Despite the changes, brands can still prepare themselves for a successful year on Amazon by focusing on three key areas.
1. INVENTORY: Brands will need to start forecasting inventory in Q1 to plan for Q2-Q4 of 2021.
2. PROMOTION STRATEGY: Brands will need advance promotion strategy for small and major holidays.
3. AMAZON ADVERTISING STRATEGY: You’ll need to plan both budgeting and testing in advance.
In this post, we’ll provide guidance and suggestions on how you can prepare for the ever-changing world of Amazon during every holiday in 2021.
Holiday Inventory Forecasting/Planning for Vendor Central & Seller Central
If your brand lives on Vendor Central, forecasting for your inventory is straightforward with Brand Analytics, though Seller Central brands will need a separate system to capture and estimate inventory need.
In Vendor Central’s Brand Analytics tool, it shows you how much inventory you need overall, along with an ASIN-level view. This chart doesn’t usually consider major spikes like holidays, but it can give you a baseline to start with. We recommend taking this information and comparing it to your timelines of how fast your supplier can manufacture your product, along with ship time to your warehouses.
When it comes to Seller Central, brands must get creative, or use internal tracking from 2020. Here are the main areas a brand on Seller Central will need to evaluate as they plan for 2021:
- How much inventory went to Amazon by ASIN each month?
- What were the time periods where each ASIN was Out of Stock [OOS] at Amazon?
- When did you have excess inventory with a slow sell-through rate?
- What inventory sat too long in a fulfillment center (longer than 180 days)?
If you are not able to answer these questions, you may need to invest in a 3rd-party tool (i.e. Helium 10). We have already noticed that Amazon has reduced quantities brands can send in 2-3 weeks before holidays like Valentine’s Day. If this is a trend for lower-traffic holidays in 2021, brands need to start sending in inventory now. Below you will find a breakdown of key holidays in 2021 and a date range of when you need to send in inventory for specific holidays to ensure you don’t run out of stock!
Managing Amazon Promotions in 2021
As we talked about earlier this year, having a detailed promotional plan for all holidays will be an important part of your Amazon strategy in 2021. Most brands may not think that they need a promotion on Valentine’s Day or Mother’s Day because they may be lower-trafficked days. However, a coupon or price discount has been proven to help drive more customers to your product pages and possibly place your product in the search results above competitors.
Planning for your promotion goes hand-in-hand with inventory planning. If you run a popular promotion that causes inventory to go out of stock, you’ll simply be missing out on sales. So, consider your plan, and use historical data from holidays and similar promotions to estimate the percentage lift in inventory you may need for all holidays. Then, take that inventory plan and work with your supplier to ensure they can send you the inventory you need to make each holiday promotion successful.
Amazon Advertising for 2021 Holidays
Ad Budgeting for the Holidays
When you think of your advertising spend and strategy around any holiday, you need to account for a 2-3 week learning period for any new campaign launches or major adjustments to existing campaigns, including budget changes. Most brands will allocate more budget for large shopping holidays to the months they fall in, but might restrict spend arbitrarily the month prior. You want to avoid major increases to your budget at the high point of any period of holiday shopping, because that will kick off a new campaign learning phase, and you already want to be humming at your higher budget when people start to buy. So ramp up your budgets in the period 4-6 weeks out from a given holiday.
One way to manage this is to slowly ramp up well in advance of a holiday so your campaigns are primed and ready for high-volume periods. We have tested Amazon’s learning phase for multiple clients in multiple categories, and after two weeks in most tests, we see not only impressions increase 50-70% compared to the first week, but sales metrics also improve due to the algorithm delivering the ad to the right audience.
In between holiday periods, prioritize testing new ad types or targeting features. The expansion of targeting in Sponsored Display, Amazon DSP features, new reporting for each ad type, and other features are all opportunities to put your brand in front of your ideal customer and gain market share from competitors. We recommend implementing learnings from your tests at least one week before the holiday.
Competitor Budgeting Around the Holidays
When budgeting, most advertisers will simply compare by-channel performance and give a set budget to Amazon Ads dependent on performance. More savvy Amazon advertisers will budget as described above for seasonal periods, but the most advanced will also plan around their competitors’ spend levels. Knowing how the competition spends will give you insight that will help you defend your market share while revealing opportunities to take more. A great place to start is with your Amazon representatives, if you or your agency have them. They can provide you with blinded competitor spend by ad type that will give you an edge.
How does inventory factor into Amazon Ads?
Not only is inventory important to keep your listing live and to keep your sales from going to a competitor or third-party seller, but it’s crucial for advertising success on Amazon. Why is that? When you have sufficient inventory in Fulfilled by Amazon (FBA) or Fulfilled by Merchant (FBM), the ads continue to deliver, and your Buy Box doesn’t get suppressed. While inventory in Seller Central may get limited from time-to-time by Amazon, we understand Vendor Central inventory can be harder to control due to the volatility of Purchase Orders. If a Buy Box is suppressed due to being out of stock, or because a third party has won the Buy Box, the ad does not automatically start delivering in real-time once you have inventory again.
The process of an ad to start delivering again can take days, weeks, or months in some cases. If a top-selling product runs out of stock, and it’s a driving force of ad sales, your ad performance will decline. When you forecast your inventory in 2021, make sure to have in the back of your mind that it will directly impact your ads. Most Amazon customers don’t scroll down past the ads, so you need to make sure you’re at the top!
How do promotions factor into Amazon Ads?
Any promotion, whether a Coupon, Best Deal, Lightning Deal, etc., will come with a callout on your ads. This callout can not only make your product stand out to a customer, but also sets you apart from your competitors. We have found that once a brand activates a coupon, the number of impressions and other ad metrics can increase 50-80% or more!
Amazon Promotion callouts like this help ads perform better.
When you build promotions in Vendor Central, there is an option to advertise on those products. Make sure to click that to build an ad. If you set up a promotion on Vendor Central, or Seller Central, make sure you are bidding on keywords that have proven to have high sales or ROAS and/or a high click-through rate. Before your launch the promotion, you should have ramped up budget and optimized your campaigns 2-3 weeks beforehand via the learning phase to maximize its result.
Amazon’s ecosystem is changing daily, so it’s important to always stay up to date on new features, but also stay up to date on what Amazon requires in inventory, promotions, and ads. If you lock in a good plan for each of these areas, we look forward to seeing your success on Amazon in 2021!
