OCR’s Amazon.com Black Friday/Cyber Monday Recap: What Brand Manufacturers Need To Know
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Transcript of OCR’s Amazon.com Black Friday/Cyber Monday Recap: What Brand Manufacturers Need To Know
Now that the marathon shopping spree of the Black Friday/Cyber
Monday weekend is over, it’s time to take a breath and look back at
how successfully all those deep discounts offered by both brand
manufacturers and 3rd party sellers translated into actual sales on
Amazon.
OCR’s Amazon.com Black Friday/Cyber Monday Recap: What Brand Manufacturers Need to KnowBy Jeff Brown, Director of Client Services at One Click Retail
There’s no denying the fact: Amazon’s Friday and Monday
sales dwarfed those of Saturday and Sunday. This despite the
average discount of 57% on Sunday was greater than Cyber
Monday’s 45% average. The deepest discounts on Amazon
(which averaged overall at 53%) occurred on Black Friday,
which saw an average of 70% off list prices.
How customers shopped this Cyber Weekend: It’s all about the deals on Black Friday and Cyber Monday
Still, despite lower discounts being offered on other days, Cyber Monday lived up to
its name as the online shopping day, with total Amazon 1st party sales at more than
$640M, topping Friday’s $515M+. While this is a sizable 24% difference between
these “traditional” rivals, the real drama unfolded between the ones caught in the
middle. Saturday’s sales dropped 6% YoY to $190 million, and Sunday’s surged passed
$310M (a 49% spike over last year’s sales). Is this the beginning of a new rivalry? And
should brand manufacturers consider Sunday as an opportunity for next year’s
growth?
Side Note: Another contender may be entering the fray. This year OCR saw a lift in Amazon traffic starting
Thanksgiving evening, instead of last year’s traffic increase that began early Black Friday morning.
While 3rd party sellers offered the lion’s share of the promotions, it was
1st party sellers who benefited the most this Cyber Weekend with
overall sales growth on Amazon up 18% from last year. It’s true that 3rd
party sellers experienced strong YoY growth at around 40%, but
because of their vast numbers on Amazon, the increase in sales was
substantially diluted across the entire base.
Direct from the manufacturer… by way of Amazon.com
The overall top product groups for the Black Friday/Cyber
Monday period, including both 1st and 3rd party sellers, were:
Apparel, Shoes, Jewelry, Home and Sports
These two categories saw noticeable declines in 1P sales compared with 2015.
Apparel was down by 20% year over year, and Shoes saw a drop of 27%.
Similar to the overall top product groups that saw a YoY declines yet still made
the top 5 in terms of total sales on Amazon, Video Games and Home
Entertainment experienced declines (on one or both days) but still made the top
10 product groups for 1st party sellers in terms of overall sales.
Apparel and Shoes were the categories most heavily promoted via 3rd party sellers.
Keeping with the trend we noted in early holiday season sales in October through
Thanksgiving, Home Entertainment sales were down from 2015 by 42%. Video
Games sales also continued their decline with a drop of 17% from last year’s Black
Friday numbers. Despite the downward seeming trend, Video Games rallied at
the end of Cyber Week to more than $160M in overall sales, with PlayStation 4
Slim 500GB Console leading the charge with over $10M in sales on Cyber Monday
alone, making this one of Amazon’s top selling product groups despite the YoY
decline on Black Friday.
While everyone could predict that the PlayStation 4 Console would
be one of the best sellers during this shopping weekend, Black Friday
proved that we love our crock pots. The Instant Pot 7-in-1 Multi-
Functional Pressure Cooker raked in close to $15M in sales on Black
Friday, propelling Kitchen’s 46% YoY sales increase on Black Friday
and taking the 4th spot in total 1st party sales for Cyber Weekend.
Video game consoles vs crock pots: Yes, the day matters
Crock pots on Black Friday and Video game consoles on Cyber Monday. So,
which day is best for brand manufacturers to drive promotions on Amazon? This
year, manufacturers were more selective and the results speak for themselves:
The product groups that chose Cyber Monday as their day this year on Amazon
experienced declines in Black Friday YoY sales: Video Games (-47%), Home
Entertainment (-42%), Shoes (-38%) and Wireless (-23%). Home Entertainment,
for example, which sold 39% of their total weekend sales last year on Cyber
Monday, shifted their promotions to Monday this year and subsequently
experienced a drop in YoY sales.
Those that chose Black Friday as their day to compete on Amazon and with
traditional brick-and-mortar sales saw their YoY sales jump: Toys (+26%), Kitchen
(+46%), Home (+30%) and Home Improvement (+105%) indicate that holiday
shoppers are no longer just looking for the best deal on their list; they’re looking
for the most convenient way to buy them. If they can find what they’re looking
for online, then why bother with the madness and mayhem of in-store Black
Friday shopping? Maybe this is the reason for the spike in Amazon traffic on
Thursday evening: shoppers were deciding whether to buy wish-list items on
Amazon or set off at midnight to battle the crowds.
This year’s overall 1P sales on Amazon suggest that
shoppers are choosing online more than ever over
shopping in stores: Total Black Friday / Cyber Monday
Amazon sales jumped 18% this year, pulling in over $1.6B.
Once brand manufacturers decide whom they’re competing
with (brick-and-mortars, other brand manufacturers or 3rd
party sellers on Amazon), it’s time to figure out the discount
level that brings in the money.
The sweet spot for brand manufacturers: Where day, discount and desire meet
While many of the deals offered on Black Friday were in the 20-30%
range, most of the sales were on items discounted between 40% and
50%. (Why the 60-80% discount range doesn’t translate in the largest
sales on Amazon is a topic for another OCR Insights article, but lack of
shopper interest combined with the smallest item prices are factors to
consider. Let’s face it, no matter how deeply discounted a PlayStation 3
console is, if PlayStation 4 is what shoppers want, then that’s what they’ll
buy.)
For the manufacturers that did choose Black Friday as
their Amazon day, the lift in sales from their promotions
clearly impacted their YoY sales for both Black Friday
and for Cyber Weekend overall.
What did Kitchen and Camera do right? From the total sales
this Cyber Weekend, we definitely know that shoppers love
crock pots. And from the spike you see above, they still love
their cameras. On Black Friday, with a 31% discount and a sales
price of $90, the GoPro Hero pulled in more than $3M, making
it one of the top selling items for 2016.
There is no question that the Instant Pot 7-in-1 Multi-Functional
Pressure Cooker is Cyber Weekend 2016’s darling. Traditionally a Black
Friday brick-and-mortar purchase, this “little pot that could” rang up
nearly $15M in sales, to be Amazon’s top selling Black Friday item. By
offering a 47% discount and a sale price of $69, this Instant Pot pulled
in 116% more than it did last year.
Be like the crock pot: Desired and discounted
Winning on Cyber Weekend requires brand manufacturers to leverage promotions
– no question about it. The impact that promotions have on sales range between
10X and 100X, as the Instant Pot demonstrates. But as more and more brand
manufacturers compete on Amazon, not just in the US but internationally as well
(with 64% of total promotions coming from the UK, Germany, France and Canada),
manufacturers must decide which day to focus on – and that decision should be
based on a deep dive into each product group’s drivers and setbacks, and the
opportunities for growth.
Key Learnings
In the next OCR Insights article, we’ll be taking the first of many
product group deep dives as we explore Amazon’s performance
in Grocery compared to total retail sales, both online and
offline. So make sure to stay up-to-date with the latest insights
from One Click Retail by checking out:
www.oneclickretail.com/insights, and following us on Twitter and LinkedIn.
One Click Retail (OCR) is a market leader in eCommerce data measurement, sales analytics and search optimization for brand manufacturers in North America, Europe and Asia. Thanks to our proprietary sales calculations that are 98.5% accurate down to the SKU level, OCR’s accuracy is unrivaled in the marketplace. The OCR Product Suite provides 1st and 3rd party business intelligence across the 30 largest retailers such as Amazon, Walmart, Target, Staples and Home Depot. The world’s top brands, such as Procter & Gamble, Panasonic, Nestle, Hamilton Beach and HP, rely on OCR insights to drive sales and profitability across eCommerce.
Founded in 2013 by eCommerce experts from Amazon, Walmart, Target, Overstock and other leading retailers, OCR was acquired in 2016 by Ascential plc (LSE: ASCL.L), a UK-based international B2B media company with a focused portfolio of market-leading events and information services products.
To learn more about how OCR can provide your brand with the competitive edge in today’s ecommerce marketplace, visit www.oneclickretail.com.
About One Click Retail