Amazon has cemented the loyalty of consumers with a vast marketplace and an extensive range of products and services provided by many individual sellers. The added benefits of Prime, including expedited shipping, make Amazon Prime subscribers particularly loyal. However, while customer loyalty towards Amazon is unwavering, it’s not clear that their loyalty extends to the individual sellers operating on the platform.
In a recent interview with PYMNTS, Claire O’Donnell, director of Selling Partner Empowerment, Communities & Trust at Amazon, discussed the upcoming Prime Day, held this year on July 11 and 12, and the company’s goals of beating its 2022 Prime Day record of more than 300 million items bought worldwide, but also discussed a new Prime Day focus: the amplification of deals from small and medium-sized businesses (SMBs).
The Consumer’s Shifting Values and the Impact on Brands and Retailers
According to O’Donnell, there is a growing trend among customers. “We increasingly hear from customers, particularly younger consumers, they want to shop their values so they want to shop small, they’re really interested in supporting small businesses,” said O’Donnell. To cater to this demand, Amazon has initiatives to enhance the discoverability and shopping experience for small businesses.
For instance, customers will have the option to narrow down their search on the main deals page, specifically exploring deals from small businesses. Additionally, Amazon introduced the Small Business badge last year, which customers can look out for during their regular Amazon shopping experience. The badge will also be visible in search results and on product pages, indicating products from small businesses.
Furthermore, Amazon has launched a small business search filter, allowing customers to refine their search results to show only products from small businesses. These recent improvements, implemented just in time for Prime Day, aim to drive not only increased sales for small businesses, but also higher customer engagement.
The Customer’s Need for Speed (When It Comes to Delivery)
The need for speedy delivery has become paramount in the realm of online shopping. Customer expectations, shaped by eCommerce giants like Amazon, demand quick and efficient delivery.
In fact, according to the “Subscription Commerce Readiness Report: Bridging the Gap Between Subscription Conversion and Retention,” a PYMNTS and sticky.io collaboration based on surveys of 2,242 consumers with retail product subscriptions, 43% of subscribers will cancel a subscription if free shipping isn’t included.
Per the study, “Consumers using Amazon Subscribe & Save lead this group, with 43% indicating they would cancel if free shipping were no longer offered. Indeed, 62% of all subscribers say they use a given retail subscription service primarily because of the convenience and cost savings associated with free shipping.”
On that note, O’Donnell acknowledges that while free shipping is a standard benefit for Prime customers, speed has also been a significant long-term trend.
“Customers want to get things quickly, and obviously we use Fulfillment by Amazon to help sellers provide that fast shipping that customers want in a way that’s really easy for them,” said O’Donnell.
The service enables sellers to store their inventory within Amazon’s fulfillment centers, where the company assumes responsibility for packaging, shipping and customer service. Through this arrangement, customers gain access to expedited shipping options and can expect prompt delivery of their orders.
How Amazon Sellers Can Make the Most Impact on Prime Day
While having ample product inventory and offering attractive deals that capture customers’ attention should go without saying, O’Donnell emphasizes that sellers can stand out by effectively conveying their brand story and showcasing the unique qualities of their products.
To convey that brand story and showcase product differentiators, according to O’Donnell, there are some tools and strategies sellers can employ. Along with discounts, promotions and reporting features that can help sellers analyze insights and optimize inventory levels as well as promotional strategies to maximize customer engagement, O’Donnell emphasizes the A+ detail pages.
A+ detail pages provide sellers with the opportunity to create visually appealing and informative product descriptions. Sellers can include comprehensive information about their brands and products, and even compare different offerings. Many sellers leverage these A+ detail pages to effectively communicate their brand narrative and educate customers about their specific products. O’Donnell notes that this resource enhances the overall customer experience and has been associated with increased sales compared to products without such detailed pages; it promotes a much more informed buying purchasing decision.
The Need for a Well-Thought-Out Deals Strategy
While a compelling brand story creates higher purchasing intent and a more informed customer, O’Donnell acknowledged that at the end of the day, customers on Prime Day are primarily seeking deals, making it crucial for sellers to have a robust promotional strategy.
O’Donnell highlights Amazon’s sellers tools that identify the most suitable products for optimal deals and devise effective pricing strategies. These tools streamline the process and empower sellers to plan their promotions efficiently.
Consumers Are Loyal to Amazon — But Are They Loyal To Individual Brands on Amazon?
Although promotions and deals are intended to facilitate quick product sales and inventory clearance, they may attract customers who are unwilling to pay more than the discounted price for future purchases.
Nevertheless, O’Donnell points out that sellers can enjoy a significant benefit known as the “halo effect,” which often occurs after running a deal. Sellers frequently witness a boost in sales even after the initial promotion, underscoring the long-term impact of a well-executed promotional strategy.
As per O’Donnell, Prime Day sellers have experienced year-on-year (YoY) growth of 4,000%. In light of this, O’Donnell highlights the importance of Prime Day not only as a day of shopping for customers, but also as a means of supporting the growth and success of small businesses.
Products That Thrive on Amazon in Light of Current Economic Shifts
According to O’Donnell, “great products will always find a home on Amazon.” Sellers who offer outstanding products and devise a robust Prime Day strategy are poised for success.
O’Donnell additionally highlights the growing customer emphasis on value, or the perception of receiving a high-quality product in exchange for the money spent.
Loyal consumers exhibit a strong inclination towards the quality of products and services. According to the PYMNTS Consumer Inflation Sentiment report, “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” which surveyed more than 2,100 United States consumers in February to get a clearer sense of how inflation has been affecting their shopping habits and relationships with retailers, PYMNTS discovered that among the factors influencing their choice of grocery shopping, 15% cited quality as the most influential factor, while 18% expressed the same for retail shopping. Notably, loyal consumers are over 50% more likely than any other group to be motivated by quality.
Recognizing these evolving customer preferences, sellers are investing their time and efforts to ensure their great products are effectively showcased to customers during this crucial period. The key for sellers is to emphasize the value proposition of their products and ensure they are readily accessible to customers during Prime Day. By aligning their strategies with changing customer expectations, sellers can increase their chances of success and cater to customers’ desire for both quality and value.
Past Prime Day Results
According to O’Donnell, there were three noteworthy highlights. Firstly, over 60% of sales in Amazon stores are generated by independent sellers, many of which are SMBs.
The second highlight was the estimated creation of 1.5 million jobs in the United States by these sellers. O’Donnell emphasized that these small businesses are the “lifeblood of local communities,” providing employment opportunities and contributing to the growth of local economies.
Lastly, there was strong sales growth for independent sellers located in rural areas, with a 40% YoY increase.
Emphasis on SMBs Following the INFORM Act
The emphasis on SMBs comes at time where the INFORM Act has officially been implemented to tackle consumer safety concerns within online marketplace.
In response to the act, Amazon said in an email to Inc.: “Amazon has a zero-tolerance policy for counterfeit products. We have proactive measures in place to prevent counterfeit products from being listed and continuously monitor our store. If we identify an issue, we act quickly to protect customers and brands, including removing counterfeit listings and blocking accounts. We applaud the new Inform regulation in establishing a baseline expectation for the entire industry.”
In 2022, Amazon successfully prevented the entry of 6 million counterfeit products into its ecosystem by utilizing its Anti-Counterfeiting Exchange. The platform enables participating stores to exchange valuable information about counterfeiters, facilitating collaboration among industry participants to effectively identify and halt fraudulent sellers.
Read more: 5 Key Things You Need to Know About the INFORM Act
The post Amazon Says Prime Day 2023 Will Highlight Small Business first appeared on PYMNTS.com.
