Amazon Digest - 12.08.24

Black Friday and Cyber Monday in numbers

Well we survived the start of the holiday shopping season. How did it go for e-commerce and retail?

• Amazon tops Amazon: Amazon reported its largest-ever Black Friday Week and Cyber Monday event. Does Amazon upping itself with each year surprise anyone? Not.

•  Ecommerce YoY growth: US e-commerce sales grew 8%, 7%, and 10% Y/Y on Thanksgiving, Black Friday, and Saturday, respectively (According to Salesforce).

• Amazon 3P success: Over 60% of sales on Amazon came from 3P (Seller Central) sellers, who are predominantly small and medium size businesses (About Amazon). Side note: 3P sellers spend significantly more on PPC advertising than 1P sellers

• Cyber Monday Dominance: U.S. consumers spent a record $13.2 billion online on Cyber Monday, a 6.1% increase from the previous year, making it the largest online shopping day of 2024 (AP News)

• Clicks over lines: While online sales saw significant growth, in-store traffic on Black Friday experienced a 3.2% decline, highlighting a shift towards online shopping (AP News)

• Walmart and Costco: Both retailers have significantly enhanced their e-commerce platforms, leading to substantial growth. Walmart's e-commerce sales surged 27%, while Costco also reported robust gains, reflecting their successful digital transformations

Personal observations, from our management portfolio of brands:

Mobile dominates - almost all brands had mobile dominance, with ranges of 55-85% of BF/CM weekend on mobile. This is line with usual numbers, but higher than a non-holiday split

To discount or not to discount - most brands did run a Black Friday, or Cyber Monday discount, which of course leads to multiple X of sales volume. However, for some brands we recommended to do a non-event discount, short (ex. only Black Friday), or no discount at all. Result?

Direct correlation the existing brand equity and BF/CM sales - brands that ran no or limited and/or small promotions still had very successful sales weekend, up to 8X of a typical sales volume. The level of sales had direct correlation to the existing brand quity on Amazon. They benefited from huge spike of shoppers volume as the baseline of higher sales. So I hope this is encouraging for the long-term planning and ongoing investment in brand growth, on and off-Amazon, regardless of the season.

We also had a fairly successful launch for a client, with FBA inventory become available just before Black Friday. Successful here is defined as over 500 units sold in a week, 3 out of 5 products still featuring a #1 Release in their respective sub-categories. No off-Amazon traffic yet.

Offer

For the month of December I am offering ‘pick my brain’ consultative sessions. Want to maximize your holidays sales? Talk through Amazon channel decisions or results? Need an outside perspective on your Amazon performance? Here is a link to book a 1 hour consulting call with me.

Consumers say too many deals

Last week I wrote about Black Friday Month. And how this year we recommended just as many clients run BF/CM promotions, as we recommended not to. And then I thought, am I doing professional suicide here? Isn’t big part my value to help brands grow?

Yes, but not when it does not make sense.

We are in a season of deals upon deals. And good news for brands, consumers say deal fatigue is real.

According to this PMNTS article one-third of consumers feel bombarded by promotions, and 41% believe frequent deals diminish their specialness.

25% of shoppers saying because there are so many deals, it makes them less likely to shop during deals events.

This is not to say that running promotions will not bring sales, we know lower price and time scarcity perception are powerful psychological levers. But the sign of a healthy brand, in my opinion, is when a business does not have to run a deal to keep up, survive, and has the same positive sales effect when ran at a time that is well-timed for the brand. It’s a tall standard for any business, but worthwhile to strive for.

TikTok Ban Upheld by US Appeals Court

This week a U.S. federal appeals court upheld a ruling to ban TikTok, requiring the company to divest its Chinese ownership by January 2025 in order to be able to continue operate in the US.

Interesting side note: there are 170 million TikTok users in the US. According to the Business Insider 32% of Americans consider TikTok a threat to national security. I wonder if there is an overlap of these thirds of the country that both use TikTok AND agree it’s a national threat? You tell me.

Potential impact to the consumer brands:

• TikTok has become a dominant platform for reaching Gen Z and Millennials, offering unique opportunities for organic content, influencer collaborations, and paid ads.

• Brands relying on TikTok Ads or influencer partnerships could face disruptions in customer acquisition and brand awareness efforts

This is also a risk for many newly minted TikTok agencies, and influencers and content creators.

What are the chances of this ban to go into effect, and what will TikTok do?

There are many venues TikTok to explore to fight this, including Supreme Court appeal, mobilize public and business support, negotiate with the US regulators, to name few.

We don’t need to panic, but if TikTok has been a brand growth and customer acquisition channel for you, pencil your 2025 investment planning for this platform until after January 2025.

Black Friday Cyber Monday Debrief Guide

It’s impossible to improve without some type of exercise of review of past performance. Value of taking a moment to debrief is understated. With holiday business it’s easy to move on to pushing more holiday sales, and planning for next year.

Yet when next Black Friday rolls around, written observations of this year would serve so well.

I adapted our internal BFCM debrief guide we use for our clients to share with you. Use it to record valuable lessons to turn into more $ next year. Access it here.

Saludos,

Irina