Wrapped: Amazon Trends 2022
We’re reviewing some of the most popular conversations among professionals in the Amazon / eCommerce space in 2022. Check out our list of this year’s top ten trending topics…
- Prime Day 2022 exceeded expectations. One of the main lessons learned was “You need to be in it to win it“.
Prime Day 2022 was one for the books, with sales increasing 109% for Envision Horizons in comparison to 2021! The key catalyst to the growth in sales: brands actively participating in the event by offering coupons and strategic event discounts.
Amazon reported over 300M products were sold during the extravaganza, a 50M increase from the previous year!
- Amazon’s first ever Prime Early Access Sale (PEAs) served as a welcome distraction to other macro events like skyrocketing inflation and wars.
Sales were hot compared to a normal October week, but they didn’t match that of the summer flagship event. There was less awareness about the sales event from both sellers and customers, likely due to it being the first “Prime Early Access Sale”. The name of the event itself also stirred up confusion about whether it was a second Prime day or a separate event altogether.
- Retail media has been gaining traction
Global ad spend is expected to slow in 2023 with Retail Media and CTV on the rise. Global retail media revenue will reach $101 billion in 2022, 18% of global digital advertising and 11% of total advertising. It is estimated that the retail media market will grow by 25% per year over the next five years. Amazon is predicted to continue to be the biggest player in the space, accounting for 60% of retail media.
- Advertising costs are increasing
Ad costs are increasing across platforms. According to a recent report, the major digital advertising platforms have each increased CPM significantly, with Facebook ad costs having increased by 89%, and TikTok’s CPM having increased by 92%.
For Amazon specifically, CPCs for Amazon Sponsored Products grew 9.6% year-over-year but the good news is there are signs of maturation (or at least a temporary leveling off) of the extreme rise experienced in ‘21 and the beginning of ‘22.
- Non-endemic marketing is taking hold
2022 also saw the rise of non-endemic marketing, resulting in brands connecting with new audiences. Amazon has become a popular platform for business in industries such as automotive, insurance, and travel to advertise to customers. For non-endemic businesses (that do not sell products on Amazon) interested in using Amazon Ads to promote products or services, Amazon advertising offerings include display ads, video ads, and custom ads.
- Certain categories are gaining momentum on Amazon
According to SmartScout, certain Amazon categories saw a great jump in annual revenue. With Toys & Games leading the way (34% growth) and others like Sports & Outdoors, Beauty and 7 other subcategories finishing the year up with 20% or more category growth. Surprisingly, but perhaps a cool down following the Covid bump, was Tools & Home Improvement clocking in at just over 7% growth for the year.
- New Amazon features & data galore (AMC, marketing stream, SQPD, etc.)
Amazon events such as Accelerate and UnBoxed brought announcements of new features and data within Seller Central and the advertising console. This year brought 60 different product releases from Amazon and Amazon Ads- some of the notable releases include AMC, Marketing Stream, and the Search Query Performance Dashboard (thank you Amazon for now making that data downloadable!).
- Profitability – LTV:CAC needs to be the new Amazon focus
Amid inflation and the softening of consumer spending, our client partners have been understandably concerned about the lifetime value of their consumers and the cost of acquiring those customers. Measurement of LTV:CAC is vitally important on Amazon to any brand trying to back into performance of the channel. We predict that this concern from brands will continue into the new year and have internal software to track these KPIs.
9. More emphasis on Amazon Creative due to the release of mobile data, more visual branding opportunities from Amazon, etc.
The past year has highlighted the importance of visual selling on Amazon; in fact, a study published by Amazon shows that Premium A+ content can increase a product listing’s conversion rates by up to 15%. Many brands have started taking advantage of Amazon’s variety of visual opportunities, such as Premium A+ content. The agile shift in focus towards visual selling is allowing businesses to stand out from the competition and attract new customers.
This year, Envision Horizons and soona teamed up to create the most comprehensive 2023 guide to creative assets on Amazon, with 45+ tips for creative optimizations. Check out the eBook on our website.
- Migration of DTC brands launching on Amazon
This year we saw DTC brands start to warm up to Amazon more than ever before, with major brands such as Gap, Victoria’s Secret, and Peloton launching on the platform. Even luxury brands are making the move, Chanel and Hermès are now sold on Amazon.
This year we have seen more brands recognizing the e-commerce power Amazon holds, acknowledging that they need to find online shoppers where they’re already shopping. Amazon is also making efforts to provide more opportunities for brands to design their own branded shopping experience for customers on the platform, as seen through improvements to storefronts and the addition of features such as Brand Story, Amazon Posts, and Premium A+ Content.
Sources:
https://www.insiderintelligence.com/content/what-you-need-know-about-retail-media-5-charts
https://www.bcg.com/publications/2022/how-media-is-shaping-retail
4. https://www.pacvue.com/report/q1-2022-cpc-report
5. https://www.thedrum.com/opinion/2022/06/24/the-rise-non-endemic-marketing-creativity-connecting-brands-with-new-audiences
10. https://www.modernretail.co/retailers/amazon-briefing-dtc-brands-are-slowly-warming-up-to-amazon/
