Macarta’s 2022 Amazon Trends & Predictions
Predicting the world of Amazon is never an easy task. Intermix the volatility of the pandemic, and it looks a lot like shaking a Magic 8-Ball and crossing your fingers. However, in today’s world, having an Amazon Business is no longer a nice-to-have, it is essential to driving meaningful sales.
When the shutdown hit, businesses were forced to move online, fast. In just the first half of 2020, e-commerce reached 27% of total retail sales — that’s ten years of growth in just six months. Two years later, the industry is still evolving, with Amazon taking the cake for traffic volume.
So while predicting the future of e-commerce is daunting, it’s imperative for businesses to stay one-step-ahead in order to keep up with customer demands and competition. We asked our team of experts what trends they predict will shape the Amazon Marketplace in the next year to help your business succeed in 2022. Take a look at their insights below.
Table of Contents
- Amazon Inventory / Catalog Management Trends & Predictions
- Amazon Advertising Trends & Predictions
- Content Trends & Predictions
- 2022 Gameplan
Inventory / Catalog Management
Amazon’s Inventory Restriction System
- Trend: There’s a hierarchy of space allocation within Amazon’s fulfillment centers that depends on sales performance.
- Action: Adopt a backup fulfillment method to prevent the restrictions from impacting your success.
Amazon has put in place a system of space allocation in their fulfillment centers that is contingent on historical performance of a Seller’s account. What is missing is a categorical nuance to this process that could possibly choke the potential of any brand, but with more heightened consequences during the holiday season. With the influx of new brands and products launching on Amazon everyday, the space in their fulfillment network is continually taxed and allocated to those who continue to improve on their core Inventory Performance Index (IPI) metrics. This inventory restriction system has been in place since Q4 2020 and there aren’t any signs from Amazon to suggest that this is going away anytime soon. In order to ensure your brand has the highest sale potential on Amazon, it is imperative to adopt a back-up-fulfillment method, like drop-ship Fulfilled by Merchant (FBM) orders, to help decouple any limits to success from Amazon’s strict inventory limits and restrictions.
This system will continue to be a mainstay for Amazon in order to prioritize the items that continually sell well from both a Vendor perspective and a Seller perspective. As a result, we expect that secondary order fulfillment options might be adopted earlier in the year by brands, regardless of category. Inventory restrictions can stifle growth no matter the time of the year, so having an order fulfillment method that is under a brand’s control is becoming more attractive.
Challenges for Catalog Updates
- Trend: It’s become more difficult to create and update listings due to Amazon’s faulty automation tools and locks on PDP content.
- Action: Make sure all your information is correct for every listing in order to get updates through.
In 2021, it became more difficult to get catalog updates through to listings. This was due to a couple factors, namely Amazon’s faulty self-service update systems and frequent locks on PDP content. What made matters worse is that when issues came up, Seller Support directed back to those same self-service tools that previously weren’t working. We hope that this is just a transition period on-the-way to a more functional system that will make updates easier.
We expect Amazon to continue to provide self-service tools for catalog updates in 2022. The locks on content may be an attempt by Amazon to enforce their content style guide or limit content changes for top-performing products. Having the correct brand name and identifiable information in every listing is thus important because without the correct information, it will be more difficult to get updates through.
Additionally, we believe that Amazon will require more category-specific data for new listings. This started with apparel this past year, and will continue as Amazon strives to create a more thorough and customer-friendly search experience. With more available data, customers can select not only the size and color they’re looking for, but also things like the sleeve length of a shirt or the cut of a pair of pants. With these new requirements for category-specific data, file feeds will be needed in order to create any listing. This will be true even for single products and items that may not have required much data to list in the past, adding even more obstacles to the process.
Amazon Cost-per-Click (CPC) Increases
- Trend: Ads on Amazon are becoming more expensive.
- Actions: 1. Launch a robust brand-defense strategy to stand out from the crowd. 2. Reset your own expectations — prepare to spend more for the same results.
Need to speak with an Advertising Specialist? Reach out to us here.
Advertising on Amazon is becoming more and more expensive. In 2022, we expect the ad auctions to become even more competitive and expensive as the marketplace continues to saturate. Defending your own branded terms and PDP ad placements is thus critical, as more competitors are entering the auctions. Continuing to launch a robust brand-defense strategy will help mitigate competitors stealing customers away, and will also increase your overall ROAS. Prepare to spend more money to maintain similar ad placements as CPCs continue to increase and expect your daily budgets for overall spend to double or triple during those peak holiday events.
Emphasis on Brand Presence in the Demand Side Platform (DSP)
- Trends: 1. Businesses are using the DSP to build brands and boost awareness. 2. Competition has increased.
- Action: Invest in alternative advertising tactics and device takeovers to differentiate from the crowd.
As we predicted at the start of this year, 2021 did place a big emphasis on video. Amazon has continued to prioritize brand identity and presence, which has caused a major shift in how advertising dollars are being spent, with a large portion now being devoted to brand building and awareness through the DSP. Our ability to identify multiple touchpoints along a customer journey is key to success, and Amazon is rolling out even more programs and metrics to help us succeed. Unfortunately, this shift has seen a rise in competition year round, especially during peak sales events. Investing in programs like Over-the-Top (OTT) advertising and device takeovers can help you stand out despite the rise. We expect this trend to continue into 2022.
Additionally, we expect that brand stores will become even more important when advertising on the DSP. Understanding how a consumer interacts with a brand’s pages goes a long way in determining how to curate messaging aimed at brand first, Amazon second.
- Trends: 1. Brands are shifting their focus to creative efforts due to expensive ads and market saturation. 2. Amazon has given brands more creative control to engage customers.
- Action: Build brand awareness and maximize your reach by exploring all creative opportunities available. Pro tip: Use your existing assets to repurpose content for new amazon deployments (i.e. video footage for Amazon Live or social posts for Amazon Posts).
In 2021, we saw a massive shift towards alternative marketing tactics as we had predicted at the start of the year. The influx of new sellers on the marketplace means it’s more difficult for sellers to stay competitive, especially as CPCs rise. Marketplace programs like Amazon Posts and Amazon Live continued to gain traction amongst sellers large and small, offering ways for sellers to differentiate from the competition while keeping their margins afloat.
Emphasis on Customer Engagement
Efforts to improve consumer engagement are at an all-time high. Amazon seems to be shifting from the consumer-first mentality — which overlooked the needs of brands and resulted in a clunky and often sterile experience — to an immersive ecosystem, which gives brands more creative control over how a customer experiences a brand on Amazon. While Amazon creates a level playing field for all sellers, these new adjustments have brought bigger names (and their competitors) to the platform, which has largely contributed to the platform growth.
New Interactive Initiatives
Amazon Posts, Amazon Live, Brand Follows, and Email Marketing, to name a few, have been successful betas that allow brands to better connect with their customers and create more customized experiences along the way. Amazon Posts, which started as a beta solely in the US, has now expanded to multiple marketplaces around the world. Amazon has always been a customer-first platform; however, the interface has lacked the engaging and interactive experience. Amazon Posts gives brands the opportunity to serve shoppable marketing content to their customers, similar to an Instagram feed.
The most impactful addition this year has been Brand Follows. Like social networks, customers are now able to follow their favorite brands and receive updates, new posts, customized email marketing, and more. From a brand perspective, this not only gives helpful details on your Amazon audience, but it also allows you to test content and gain insights that can also be beneficial for off-Amazon goals.
Improved Amazon Reporting Metrics
Additionally, we have seen a large improvement in the reporting and recommendations Amazon provides. This data has given us valuable insights into what the Amazon customer wants — how they interact with content, what they want to see, what kind of creative engages them, etc. While Amazon has typically held their creative metrics close to chest, this data allows us to more intelligently build a content plan that directly targets the behaviors of the consumer.
New Amazon Creative Initiatives to Come in 2022
We anticipate that Amazon will continue this prioritization of customer experience into 2022. The recent “remodel” of the Amazon Advertising platform signals internal growth, which could manifest in new betas, enhanced creative features in advertising and brand stores, and much more. Given the shift towards influencers and video content in 2020 (read: TikTok Brings a New Wave of Amazon Sales), our team expects to see an increase in digital-focused initiatives targeting Gen Z in 2022. Think virtual reality, video capabilities, and more creative possibilities within the brand-generated experience. Amazon is known to test anything and everything, so nothing is off the table.
2022 Amazon Gameplan
At the onset of the pandemic, Macarta — like the rest of the world — had to figure out how to adapt and thrive in the midst of so many critical unknowns. Our strategy, in short, was simple: Stay true to our roots. Pragmatism, transparency, and remaining nimble are at the forefront of all our partnerships and the backbone of each and every interaction we have with our brand partners. While we do not have all the answers, following a philosophy of pragmatic adaptability will help you come out of this period of uncertainty unscathed.
What we do know for sure is that Amazon will continue being Amazon — a company that facilitates best-in-class ways for brands to reach new and existing customers with compelling content, a broad product selection, and excellent customer experiences. Amazon will continue to be more than a place to buy things in 2022, and will further cement its role as a proving ground and destination to build a brand.
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