The holiday season is the most important time of year for many Amazon sellers. Sales can increase by large margins—and this year, things could get especially crazy as buyers look to spoil their loved ones from afar.
With more shoppers staying at home during the winter months, experts predict that the higher sales volume seen on Cyber Monday could last up to a month through Christmas. Data from Salesforce also shows that the total packages expected to ship this holiday season (700 million) is 5% more than our current delivery ecosystem can handle.
While this means that sellers have multiple things to consider, both in terms of their operations and sales projections, it also means that big opportunities are right around the corner.
What Does Prime Day ‘20 Tell Us About Holiday Sales?
This year’s Prime Day has gone to show that online shopping has, in fact, started to pick up dramatically in the tailwinds of a pandemic that initially forced buyers to pull back on their personal spending.
Amazon set a new sales record for the annual event without even investing heavily in marketing it, showing how eager buyers are to resume their pre-pandemic shopping activities and take advantage of special discounts. Despite Prime Day getting delayed to October—three months later than usual—third-party sellers made over $3.5 million during the event, a YoY increase of 60%.
It’s safe to assume that another sales record may be reached over the holidays. Generally speaking, you should be prepared to handle higher traffic volumes and stock up on extra inventory on your best sellers (we recommend an extra 10% to 20% on top of what you usually carry).
You’ll also want to keep in mind that higher demand could mean a clogged fulfillment, even on Amazon’s part (let’s not forget about Amazon FBA’s shipping issues earlier this year). While Prime Day went relatively smoothly, brands and carriers alike predict a frenetic holiday season. So, if you’re an FBA seller make sure to restock your inventory early so that Amazon has plenty of time to process it and get it into their system.
Top Selling Amazon Products During the Holidays
Half the battle is knowing which products and competitors to keep an eye on this time of year. This could affect your cross-channel ad strategies, purchase decisions, listing optimization focus and other key tactics for getting ahead.
To help out, here are five products that have historically performed well during the holidays, according to AMZScout data. We suspect that items like these will continue to perform well this year, even amid COVID-19’s impacts on buyer preferences.
The Roomba is already a well-known and popular product. However, it sells particularly well over the holidays, not unlike Dyson and other high-priced home gadgets. When you look closely at the trend for the whole year, you can see that sales on and around Black Friday ‘19 were three times higher than the yearly average. Amazon rankings for this listing climbed to first-page slots, while the sales price dropped by more than 20%.
It goes without saying that many people will remain cooped up at home in 2021. Already, sales for bidets, electric candle warmers, home appliance parts and other items that improve life at home have grown exponentially. And the Roomba is no less important to the homeowners with lots of space to keep clean.
Furbo Dog Camera
On Amazon, Furbo represents a trove of high-tech gadgets that’s cherished by today’s most enthusiastic dog owners—and yet, it only seems to sell when it’s on sale (see: sales spikes during Q4 last year and during Prime Day, October 13-14, this year).
Of course, one could easily argue that despite the dramatic growth of dog sales and adoptions this year, most dog owners are now at home, eliminating the need for a Furbo camera. This can also be seen in the data; beginning in March, Furbo’s ranking on Amazon took a sharp turn, getting more and more buried underneath other (more essential) pet products.
Despite all this, it’s worth pointing out that products like Furbo could spike again, just like it did on Prime Day. Buyers are especially more open to purchasing or gifting “luxury” goods and/or preparing ahead for next year, when a vaccine may become available (fingers crossed) and life may return to being somewhat normal.
Bonus tip: Search “dog camera” and even “Furbo” on Amazon and see what pops up. A vast majority of high-ranking products undercut Furbo’s pricing by more than 80%. Furbo relies heavily on its brand reputation to clinch sales, but if you can offer an alternative at a much lower price, Amazon’s a good place to sell.
23andMe Health + Ancestry Service
People have become more interested in their ancestry in recent years, but the high price tag seems to scare people away most of the year and similarly take a backseat as the pandemic has shrunk personal budgets (and, secondarily, discouraged traveling).
However, during previous holiday periods, the Health + Ancestry service has been picked up as a popular gift item. It’ll be interesting to see how it will perform in upcoming months, especially as 23andMe has been leveraging its database and network to find a genetic explanation to the varying symptoms of COVID-19.
While you should never make false claims or try to exploit situations like the pandemic in your Amazon listings, if you sell health products like this, you can take a page from 23andMe’s playbook and mention how your product can help with research. Speak to values that you share with your buyers, and how your product can fit into their new norm.
Christmas Gift Bags (or Generally, Multipacks and Bundles)
It shouldn't come as a surprise that gift bags sell well over the holidays, though prime time for purchasing is before Christmas.
Taking this one step further, offering multipacks like this or actual product bundles (aka gift packages) could be a huge asset for you. Multipacks and bundles let you list to unique ASINs and thereby sidestep competition. You can additionally boost average order value (AOV) and, in turn, profits by incentivizing customers to buy in bulk.
But between identifying the right items to bundle and being set up to track inventory around them, bundles require preparation well ahead of time. Amazon also has strict rules for product bundling. You can only list a bundle to one product category at a time, for instance, and you must title it according to the highest priced item.
If you can adhere to these guidelines and ensure that you don’t accidentally oversell on your products (it happens more than you’d think), then kits and bundles could give you a competitive edge. You can more easily sell slow-moving or excess inventory, in addition to protecting your margins while still promising your buyers a good deal.
Fleece blankets naturally sell better when it’s cold outside, so in key locations they make for a popular gift item. More importantly though, this year they may represent a rise in loungewear, bedding or other at-home comfort items (already we see demand trending up again).
Consider doing some more investigation around the items in your catalog that fall into these categories, and seeing if any are worth promoting further or earlier.
Amazon Revenue Estimates for Q4 2020
As demonstrated by the products above, if you’re selling the right items you can expect your sales to triple or even quadruple from around Black Friday all the way until Christmas. But just what exactly are experts predicting for this year?
Most analysts are forecasting an increase over last year’s sales, with some estimating Amazon’s revenue will jump over 27%. Amazon itself is predicting this will be the first quarter to surpass $100 billion in sales, with their estimates ranging from $112 - $121 billion.
Whatever way you look at it, the 2020 holiday season is bound to be huge and already we can see some evidence of this emerging.
Holiday Shopping Started Early
In fact, shopping started as early as Prime Day and hasn’t slowed down. FedEx has even reported that it’s been handling Black Friday/Cyber Monday levels of delivery needs nearly every day since March. And many consumers are either worried about shipping delays or product shortages ahead of Christmas. As a result, 25% of consumers claim that they’re shopping extra early this year, according to a survey by Coresight Research.
(As a seller, make sure to take advantage of this. Start your deals early and run your ads sooner than you would in previous years so you can catch sellers who are getting an early start on their shopping.)
An Increase in Purpose-Driven Shoppers
As retailers have battled a volatile year, more and more shoppers express a desire to support their favorite brands or shop from retailers whose beliefs and ethics align with their own.
A survey conducted by Google even found that 66% of shoppers plan to shop at local small businesses. Others have sought women-led or black-owned businesses, among others, to support.
If you’re an individual seller, let people know that you’re a small home-based business. Or regardless of size, consider providing other information about your values and beliefs to make you stand out from other sellers.
3 Tips for Performing Market Research During the Holiday Season
You can never be too prepared for the holiday shopping season. With that said, here are a few tips to help you determine which of your products, and your competitor’ products, are likely to perform well.
1. Look at Recent Trends
Products generally don’t see their sales spike up overnight. It happens gradually over the course of a few weeks or a month. In most cases, you can spot products that could potentially break out over the holidays because they’re building momentum in October and early November.
To start, look at what sold well during Prime Day. Since Amazon moved this event closer to the holidays this is a great indication of what’s popular at the moment. Prime Day serves as a great litmus test as to the products, prices and deals that attract your customers.
Next, look at sales trends over the last few weeks. COVID-19 cases have been peaking again recently, and this could be having an impact on people’s buying decisions. Compare this to sales trends at this time last year to see how customer demands are changing during these unusual times. The sooner you can identify new trends, the better off you’ll be.
2. Use the Right Tools
In order to see this kind of data, you need to make informed decisions, you’re going to need the right tools. There are a number of options available for sellers who want to go more in-depth with their product research.
For example, AMZScout offers a wide variety of tools, such as their Pro Extension which lets you see estimated monthly sales, reviews, sales history, demand, competition levels and more for any item currently sold on Amazon. You can also calculate fees using their free FBA fee calculator.
You can additionally use Zentail to track performance around your existing catalog and identify any gaps in your assortment or opportunity for improvements.
Whatever tools you decide to go with, make sure they give you accurate and up-date-data that will allow you to identify the right products to stock up on and promote over the holidays.
3. Find a Reliable Way to Measure Competition
Any successful seller knows the importance of identifying competition levels. You could be selling the most popular item on Amazon this holiday season, but if there are thousands of other sellers offering the exact same thing then you’re likely not going to make a whole lot of money.
This is why it’s so important to find a way to accurately measure competition. If you can identify a trending product that not many other sellers are offering that will be a huge advantage for you.
There are a few tools that will help with this, such as AMScout’s Pro Extension. This Google Chrome Extension includes scores for both the niche of a product and the product itself.
A score of seven or higher means the item has a good balance of both demand and competition. Within each of these scores, you’ll also find a saturation score which measures the number of sellers currently offering the product.
The holiday season is always important for Amazon sellers, and based on expert predictions this could be the biggest fourth quarter ever. Your best bet is to develop your strategy as soon as possible and try to think ahead.
In short, look for products that are trending up and performed well last year, try to find items that have relatively low competition and account for the fact that there will likely be more traffic on Amazon this holiday season.
If you do all that, then your ecommerce business should finish 2020 strong.
This post was written by AMZScout Amazon Expert Team. AMZScout is an Amazon research tool that provides solutions for every stage of the selling process. They share their expertise and identified trends to guide sellers to success.