Q4 has started and major sales events such as Black Friday (November 29) and Cyber Monday (December 2) are coming up this quarter. To help marketers get a better grip on maximizing their sales and profits during these busy periods, retail researcher Teikametrics has researched data from its customers regarding the sales activities of thousands of Amazon sellers on Prime Day 2019. The results are on Marketing Land. Here is a summary.

Prime Day vs average days

The researchers compared the performance on Prime Day and on average days prior to Prime Day. This concerns data (vertical and non-vertical specific data) of 1,300 products that retailers sold on Amazon in the categories ‘Clothing / shoes and jewelry’, ‘Health and household’ and ‘Home and kitchen’. In addition, 1,100 products in a wide range of categories were researched.

Effect on cost-per-click and conversion

The biggest trends? Events such as Prime Day clearly generate a huge increase in traffic and sales on Amazon, but that does not necessarily mean higher CPCs or conversion rates. In the ‘Clothing / shoes and jewelry’ category, the conversion rates remained the same and the cost per click on Prime Day fell by 5.7%, despite the fact that advertising spending increased by 33% and sales increased by 540%.

This is a bit different in other categories. Within the ‘Health and household’ and ‘Home and kitchen’ categories, the costs per click rose almost double-digit.

Increase marketing budgets

The researchers recommend that marketers increase their budgets during big events such as Prime Day. There is a unique opportunity to make great effort during these events with double to triple digit figures compared to daily sales figures. This is possible through advertising across key search terms, with a minimal increase in cost on a cost-per-click basis.

Organic sales

In the clothing / shoes and jewelry category there is a substantial increase in organic sales on top of sales through advertising. The average change in the TACoS (total advertising costs of sale), where sales are combined by advertising and non-advertising-derived sales, was -64%, while the average selling costs only decreased by -3% on average.

According to the researchers, TACoS is important to keep up to date because of Amazon’s algorithms. Activity by a paid entry has an impact on the organic ranking, in addition to behavior. Like consumers who start an unbranded search within a product category, see a brand in a paid listing and then immediately start a new search for the products of that brand.

A conclusion of Teikametrics is that “unbranded advertising” can promote organic sales during events such as Prime Day or Black Friday.

Sales of non-discounted products are also rising

This study also finds that of the more than 1,100 products in a wide variety of categories during the Prime Day period, 94% saw sales increase compared to the average days prior to the event. But more importantly: while discounted products had the largest average period-over-period revenue (+ 820%), the 59% of products in the sample that were not discounted over Prime Day still saw average revenue growth of +496%.This illustrates how discounts do help in generating higher sales compared to events such as Prime Day. Also is clear that consumers who come to Amazon during that period are in the mood to shop anyway.

Sellers should be strategic in terms of what products in their catalog should be discounted or promoted via Prime Day or similar event in order to generate the best outcome for their business.

Teikametrics sees that retailers who used an aggressive advertising strategy were the most successful on Prime Day. And in almost all cases, the seller concentrated his budget and discount efforts on specific, strategic product lines, rather than on an entire product portfolio. The researchers expect that this will also happen during Black Friday and Cyber Monday.