Amazon announced that it will hire an additional 100,000 employees and will raise pay for a raft of logistics, operations, and warehouse employees through April. This is an early—and unsurprising—sign that Amazon sales are up as consumers socially isolate. An eMarketer poll found that 74.6% of U.S. internet users will steer away from stores as the COVID-19 outbreak worsens, putting Amazon and other digitally strong companies in a relatively positive position.ANALYZING AMAZON’S PRIORITIES
In my work at Stella Rising, my entire focus is on navigating our clients on Amazon through this unprecedented time. Wishing to better understand our current climate, I broke out Amazon’s millions of ASINs into two different categories: the ones crucial toward the prevention of and protection against COVID-19, and all other products. Amazon is thinking similarly: the retailer announced to its FBA sellers that it would be temporarily prioritizing the entry of household staples, medical supplies, and other high-demand products into its fulfillment centers. In addition, they will continue to accept products in the following categories: Baby Products, Health & Household, Beauty & Personal Care, Grocery, Industrial & Scientific and Pet Supplies. On the vendor side, through which Amazon controls placing the inventory rather than brands shipping themselves, Amazon is also prioritizing household staples, medical supplies, and other high demand products coming into their fulfillment centers. Vendors should expect reduced purchase orders, including pausing of products that are not considered staples, and extended delivery windows for existing purchase orders (in effect through April 5th).
SEARCH BEHAVIOR: WHAT ARE CONSUMERS SEEKING?
On Amazon, toilet paper, hand sanitizer, Clorox wipes, toilet paper bulk, and disinfectant wipes have seen an unparalleled—and well reported—surge in sales. Looking at search volume on the platform, hand sanitizer jumped to second place the week of February 23rd, right after N95 masks, held that spot for the following week, and is now second to toilet paper. Meanwhile, hand soap jumped from the 53rd to the 12th spot in one week. Amazon is struggling to keep these items in stock, mainly due to factory closures in China. Out of stock issues quickly send Amazon's algorithm into a frenzy, sending these ASINs falling from their best seller rank position.
Other categories that have seen an increase in sales this past week are books—as consumers prepare to spend time more time inside—and toys, as parents seek to keep children occupied.
REVIEWING THE BEAUTY CATEGORY
At Stella Rising we have deep expertise in beauty and personal care; as such, I investigated the performance of that category on Amazon specifically. Here too, top searches relate to the virus, with Aloe Vera gel in the top spot. As hand sanitizers are sold out, Americans are looking for DIY options and are using Aloe Vera. In that same vein, rubbing alcohol and isopropyl alcohol were numbers eight and 23 on the top search list, respectively. Hand soap, toothpaste, and shampoo all rank within the top 20 search list.
During this time, we do expect that luxury and seasonal beauty products—such as fragrance, suncare, and color cosmetics—will be adversely affected on Amazon. Color cosmetics, which was struggling prior to the outbreak, will likely not be a consumer priority, as so many women work from home and wear less makeup as a result. As spring break trips, vacations, and Coachella are all cancelled, the need for suncare products is also decreasing. "Perfumes for Women" fell 62 spots in search last week, while "Sunscreen" dropped 89 spots; both categories were out of the Top 100 Searches for the first time in months.
We feel quite positive about skincare, as messages to do with self-care are resonating with consumers. While eye cream, a term consistently in the top 20 search list, fell to #78 last week, we think that the skincare category will fare well overall.
WHAT CAN BRANDS EXPECT?
Amazon continues to make customers its top priority, advising sellers to ensure that they cancel any orders that they are unable to fill and place their accounts in "vacation mode" if they are not able to fill orders at all. Amazon is communicating with consumers as well, emailing warnings in advance as they experience delays in shipments, including Prime orders: "We're encountering a delay in shipping your order. We apologize for the inconvenience."
With the initial panic of the pandemic hopefully behind us, consumers have an idea of the supplies needed to keep them and their families safe and healthy for the next several weeks. The question holds: will consumers re-direct funds typically spent on the movies or dining out toward discretionary Amazon and e-commerce purchases? Or, overcome with concern, will they fully pull back the reins on spending? While it may be too soon to tell, Amazon remains a strong platform for brands because it is already so ensconced in the online shopping behaviors for millions of Americans.
From accurate forecasting to allow for sufficient lead time to optimizing Amazon Advertising spend, there are many factors to consider while navigating your Amazon business during this time. Looking for guidance and expertise? We are here to support you; connect with us to start a conversation.