Coronavirus Update: More Hope on the Horizon for Brands
Each week during the coronavirus outbreak, we’ve been sharing our updated observations and predictions. As the current climate is changing regularly, many brands that sell on Amazon have been feeling the impact in different ways. This week, we’ve seen some hopeful trends leading us to believe the next few weeks will be positive. Continue reading for what we’ve learned about non-essential items and a closer look into what our clients have experienced.
The Highly-Anticipated Return to Non-Essential Shipments
As expected, after about a month, this week we saw Amazon’s ‘essential’ items priority relax. Across our clients’ catalogs, Prime badges began returning. And we’ve noticed a decrease in messaging regarding prioritized items on product detail pages.
Some of our clients have experienced a slow return to non-essential shipments. Their lists of products eligible for shipment creation have been updated daily. And for others, their entire FBA catalog was opened for shipments at once. Shortly after this welcome change, Amazon “lifted its ban” of non-essential items overall.
Amazon was able to open shipments to non-essential items because of its recent hiring efforts. More employees in fulfillment centers allow Amazon to better manage increased demand. However, it has been reported Amazon will continue limitations to some extent. For example, customers will be limited in the number of products they’re able to purchase. And third-party sellers will be limited in how many products they can store in Amazon’s warehouses.
As operations slowly return to normal, we’ve noticed key trends among our clients’ advertising campaigns as well. These include:
- A decrease in Cost-per-Click (CPC)
- Increase in Impressions
- Increase in Share of Voice (SOV)
- An overall decrease in competition
With that said, the greatest concern among brands has been inventory constraints. Brands with plenty of stock and regular POs are in a unique position. Before Amazon’s competitive landscape is fully restored, advertising campaigns can drive impressive results. We recommend brands with sufficient inventory quickly increase investments, even if it’s only in the short-term.
A Look Ahead…
As mentioned, Amazon is aggressively hiring to level-set major impacts on brands that sell on the channel. Within the next week or two, we expect Prime shipping windows to stabilize and any lingering PO and inventory constraints to resolve. Finally, we can also expect an official announcement from Amazon regarding Prime Day, which is highly expected to be delayed past its originally scheduled July date.
Although the US and countries abroad have a long road ahead, brands that sell on Amazon can now be hopeful. To offer a transparent perspective of how MPS clients have been affected by COVID-19, we identified and highlighted trends in a comprehensive infographic.