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Amazon in 2020: An Opportunity Guide for Advertisers

In our 2019 Amazon Advertising Playbook we conservatively made the claim that “dominance over the search space is changing”. In the ever-shifting landscape of 2020, this has proven accurate. Given the context of restricted movement and closing brick-and-mortar stores, shopping online has never been more popular; and the natural choice for many browsers and buyers in this case is, of course, Amazon. In May 2020, it’s reported that over 2.5 billion users visited Amazon.com, an increase of 19% since February alone (Statista). Moreover, given Amazon’s quarterly profit growth, it’s clear that while we reported an increase in consideration phase behaviour on the platform last year, these visitors are buying in droves too (Financial Times).

Interestingly, although Amazon has typically championed product categories like toys and electronics (which often still rule the roost on Prime Day), consumer interest within the platform is altering to match external need. In January 2020, an analysis of the most searched products on Amazon revealed electronic items taking six of the places on the top ten list. By March this had reduced to zero, with health, household and baby care securing eight of the top ten spots (Digital Commerce 360). Grocery sales also reportedly tripled, with Amazon increasing its delivery capacity for groceries by 160% (ibid). If the argument for advertising on Amazon was compelling for retailers in these categories before, it’s overwhelming now. 

The impact of the Covid-19 surge in category demand

However, this surge in category demand had a tangible impact on others within the platform. With warehouses scrambling to fulfil orders of hand sanitiser and face masks, shipments of other “low demand” or “non-essential” items were effectively halted in March and Prime delivery periods were extended. This also matched the broader market trend, with 45% of eMarketer respondents indicating that they’d stopped spending on categories such as electronics and clothing by 27th March. With most countries now seeing a resumption of normal Amazon service, the benefits to these categories may not have been as apparent in the short-term but will instead appear in the long-term. Prime membership is on the increase as a result of initially essential purchases (predicted to be leaping up to 25.8 million members in Germany this year, equal to over 30% of the population).

E-commerce growth in Western Europe

This boosts the number of loyalty-driven consumers that are more likely to purchase from Amazon in the future, even in those categories that are considered non-essential. Given that 14% of eMarketer’s survey respondents said that their spending had grown on electronics and similar categories since 6th May, this all makes for a profitable collaboration for Amazon.

Leveraging Amazon’s rich datasets successfully is key to success

While the halo impact of increasing Prime membership and consumer loyalty is a clear win for retailers that choose to sell through Amazon, there are still benefits to be had for those who are not retail brands but are looking to leverage the Amazon’s rich datasets to reach their customers elsewhere. The pairing of growing website visitors with increasingly intelligent audience segmentation is developing into a stronger proposition each month.

In a world where diversification of strategy and advertising channels is paramount in meeting unpredictable consumer behaviours, the opportunities that Amazon offers are worthy of consideration for almost any advertiser. To learn more about the opportunity for your brand, download our 2020 EU Amazon Playbook  - our indispensable guide to advertising with Amazon.

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