We’re four months into 2020 and, if you ask most people, we’re not off to a very strong start. Many of those who excitedly said good riddance to 2019 are now looking back longingly at the days when simple luxuries, like getting basic necessities at the grocery store, were not only possible, they were pretty much guaranteed.  

COVID-19: Reshaping Shopping Habits

January 2020 started like any other, gyms were packed, basketball season was well underway and many were looking forward to the promises of the coming year. Fast forward four months and you’ll find us living in a sort of alternative universe where working from home, binge-watching Tiger King and minimizing contact with the outside world have quickly become our new normal. In just a few short months, the worldwide spread of Coronavirus has impacted us and our way of life in unprecedented ways. As people have altered their daily habits to protect themselves and their loved ones, we’ve seen an enormous shift in shopping behavior. In this article, we’ll take a closer look at changing consumption trends, how Amazon is reacting to this new wave of panic-driven online shopping and how brands and agencies can proactively prepare.

With the global spread of a pandemic, drastic changes to consumption habits are not surprising. Nielsen uses six behavior threshold levels to illustrate how consumer shopping patterns have evolved since the Coronavirus outbreak.

In a mere month, Americans went from cool, calm and collected level one shoppers to panicked, hand sanitizer hoarding heathens at level 5. As in-store inventory depleted and anxiety over the virus mounted, consumers turned to eRetailers to supply basic necessities. According to Adobe Analytics, the product categories that experienced the most growth include virus protection, over the counter medication, toiletries and shelf-stable pantry goods.

While the influx of traffic and sales may seem like something worth celebrating, it has also posed new challenges for packaged goods manufacturers and top retailers as they struggle with supply, production and fulfillment. Even Amazon, eRetail’s superstar, is feeling the pressure.

The Pandemic that Pushed Amazon

Theoretical Question: If you needed something and you couldn’t find it in-store, where would you look for it next? Chances are, Amazon came to mind.

Amazon’s vast marketplace, extensive product selection, fast shipping and unwavering dedication to the customer experience make them an obvious first choice for online shoppers. However, with the rise of the virus and in-store shortages, consumers are leaning on Amazon now more than ever. Here’s a quick look at the immediate impact:

  • Between March 14 to March 17, daily visitors jumped from 5.18 million to 73.55 million.
  • Compared to February, March sales growth for “essential” products are up 30-100%, while “non-essential” items are up nearly 20%.
  • Top searches on Amazon have drastically pivoted as well. The list, once dominated by tech and gadgets, is now mostly made up of household and personal care products.

Amazon Pushes Back

At this point, you may be thinking that Amazon would be thrilled by the rising demand – after all, who doesn’t like making money. However, this rapid and somewhat unexpected escalation in sales has put a massive and unwelcome strain on Amazon’s supply chain and operations. In true Amazon fashion, the eRetailer has responded to the unforeseen challenges by quickly putting new measures into place. Here’s what you need to know:

  • To address issues related to price gouging and misinformation about the pandemic, Amazon has suspended 3,900+ seller accounts and removed over 500,000 products. They are currently monitoring all essential items around the clock to ensure fair pricing and product listing accuracy.
  • On March 11th, Amazon began restricting the types of sellers that can sell health and sanitation products like face masks, hand sanitizers, antibacterial wipes, disinfecting spray and more. Since gating sanitary items, Amazon has stopped accepting applications to sell these products.
  • As of March 17th, fulfillment centers are only accepting high-demand and essential items. Essential items are those that fall within the following categories: Baby, Health & Household, Beauty & Personal Care, Industrial, Scientific and Pet Supplies. For products other than these, Amazon disabled shipment creation until April 5th. On March 26th, Amazon introduced the Restock Inventory tool and Restock Report in Seller Central. These resources allow sellers to check which products are eligible for shipment creation.
  • To ensure the capacity to receive, restock and ship high-priority products, Amazon temporarily paused removal operations in some of their fulfillment centers. Sellers can continue to create removal orders, but there will be delays in completing the requests. As a result, the eRetailer has also waived the April 15 long-term storage fees for the United States, United Kingdom, Germany, France, Italy, Spain, Poland and the Czech Republic.
  • Prime shipping on non-essential items is currently delayed for up to a month. The delay is a result of Amazon’s singular focus to deliver high-demand products to customers.
  • Sellers will not be able to create new product promotions, discounts or deals until April 5th. However, existing promotions will still run as planned.
  • Due to the unmanageable demand for grocery products, Amazon has suspended Prime Pantry for the time being.
  • To alleviate concerns from many 3P sellers, Amazon has relaxed its policies for shipping-related account performance metrics. Specifically, any COVID-19 related disruption as it relates to late shipping or needing to cancel orders due to factors outside of a seller’s control.

Sellers, It’s Your Move

During these uncertain times, sellers should be taking a page from Amazon’s book. Since we don’t know how demand will change in the coming months, we should be prepared to quickly respond to the crisis as needed. In the spirit of preparedness, we’ve outlined recommendations that brands and agencies can implement right now.

#1 Know Where You Stand

With Amazon temporarily prioritizing products coming into their fulfillment centers, it’s vitally important to understand whether your products are considered essential or not. Seller Central users can reference the Restock Inventory and Restock Report if they are unsure.

#2. No Inventory, No Sales 

Brands that fall within one of the six essential product categories should focus on monitoring their inventory and shipping more units to Amazon as needed, allowing extra time for potential delays.

Sellers with non-essential products have a few options. First, they should consider temporarily fulfilling their own orders, rather than relying on FBA. Next, they should focus on driving traffic to their brand’s website, allowing for higher profit margins and faster fulfillment times. Regardless of the route chosen, sellers should be prepared to send inventory as soon as the FBA suspension lifts. Planning ahead will help get your business back on track as soon as possible.

#3 Adjust Your Marketplace Strategy

If you think you may have a shortage of inventory in the near future, adjust your marketplace strategy. To conserve your inventory, consider reducing your advertising activity and suspending any upcoming promotions. Doing so will prevent any unwanted spikes in sales, allowing you to keep units in stock.

On the flip side, if inventory is not a concern, now is a better time than ever to ramp up your marketing efforts. Increasing your advertising investment will put your products in front of consumers and bring awareness to your brand.

#4 Fine-Tune Your Messaging

For those selling essential items, consider ways to fine-tune your messaging. Adjust your product description or add an image to help reassure consumers that your products are responsibly sourced and helpful during the current state. Research has shown that transparency and product education establish trust and helps customers overcome purchase hesitation.

#5 Focus on Your Brand

The impact of COVID-19 is sure to impact every seller in one way or another. For some, sales may take a hit in the coming months. We encourage you to use this time to focus on your brand, ensuring your listings are fully optimized and mastering your advertising strategy.

#6 Keep in Touch

Our last recommendation is the simplest of all, don’t forget about your customers. In uncertain times, people are looking for comfort and answers. Continue communicating with them, both on and off Amazon. When this is all over, people won’t forget the brands that were there for them when they needed it most.

Given the current circumstances, it’s normal to approach business management with a sense of caution. However, we encourage brands to proactively monitor performance, observe trends and adapt their strategy accordingly. If you need help navigating the complex intricacies of Amazon’s ever-changing landscape, let’s chat! OmniiX empowers brands to thrive on eRetailer platforms with knowledge, actionable insights and tools to even an unfair playing field.

Need help navigating the complex intricacies of Amazon’s ever-changing landscape? Let’s chat! OmniiX empowers brands to thrive on eRetailer platforms with knowledge, actionable insights and tools to even an unfair playing field.