With Amazon’s sixth annual Prime Day approaching, so does the unofficial start of the 2020 holiday season. Much remains to be seen, including how much consumers are willing to spend before Halloween and how that will affect the rest of the fourth quarter becomes.
If 2020 has taught us anything, the unexpected is to be expected. However, we can expect a handful of big changes in brands, retailers, and consumers.
Brands will spend even more on advertising
Prime Day in October gives brands the opportunity to let consumers know about vacation deals earlier, which can lead to higher overall advertising spend. That’s because the brands that do well on Prime Day get such a high return on ad spend (ROAS) that they decide it’s worth going back to the Well for Black Friday and Cyber Monday, Eric Heller said , Executive Vice President, Marketplace Services at Wunderman Thompson.
Speaking at Amazon’s Accelerate event in September, he said the platform had instructed brands and third-party sellers to budget for two to four times their regular ad budget and start advertising early.
“They’re asking brands and third parties to really invest on Prime Day,” he said. “Of course, that’s what you have to do to get above the fight, but once you’ve spent October it’s not like saying you don’t allocate extra money on Black Friday and Cyber Monday will.”
And these advertisers aren’t just shifting the budget they would have spent in July.
“What we already know is that they were already spending because Amazon had so many spikes in consumer spending [earlier this year]”Heller said.” I think this increases the percentage of media revenue that Amazon generates. “
Think of this as a promotional marathon for the holiday season
Elizabeth Marsten, Senior Director of Strategic Marketplace Services at Tinuiti, noted that this was a particularly challenging year for brands to meet bid deadlines and prepare creatively due to the Prime Day delay and ambiguity in dates.
“The strategy has evolved to cover this and fourth quarters as marathons and fewer separate sprints, as we may have seen some of this key data in the past few years, especially given the economic hardship some consumers have faced this year in particular . “She added.
However, Amazon still has the ability to instill customers in a confident buying mentality that marketers should take advantage of over the next two months. According to Jon Maxson, Senior Director of SEO at iCrossing, brands should optimize their Amazon product presence for maximum potential rank, but they can also complement their organic presence with paid media in categories where the cost may be lower than in years past and where competition requires a stronger presence.
“With the volatility in the market this year, it is more important than ever to coordinate organic and paid media efforts to maximize incremental returns on tight budgets and achieve the best possible overall digital results,” said Maxson.
Consumers will be more cautious
After the headlines about fraudulent products, Zach Weinberg, director of Gartner’s Amazon advisory group, suspects customers will be more careful about their Prime Day purchases than they have been in years past.
“I think this year on Prime Day consumers will be even more conscientious about their choices and buying from popular brands versus unfamiliar brands on the Amazon Marketplace,” he said.