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January 05, 2021

Amazon Trends in 2021: Expert Forecast

While many businesses around the globe are shutting down or experiencing massive downturns, e-commerce is booming.  Closed stores and fear around Covid-19 drove a huge surge in the numbers buying online.  This led to many e-commerce businesses having their best year ever on Amazon.

As the year ended, we asked some of the world's leading experts on Amazon from around the globe to share their predictions for 2021.

Amazon in 2021 is only going to get more exciting and competitive.  As more large brands and venture capital starts to come to the marketplace, sellers of all sizes will need to be working towards a more sophisticated marketing strategy for Amazon.

This means that for companies to remain competitive, they will need to create the skill sets around listing optimization and ad structure.  They will also need to master Sponsored Product Ads and expand to a full-funnel ad approach to keep their advertising costs down.

Finally, Amazon has really been focusing on Stores and Amazon Live, so you will want to keep your eye on those areas as well.

In my professional opinion, we will see an increase in rules and regulations from Amazon that force third-party seller information to be more transparent. Over the years, knockoff and low-quality products have been able to hide behind brand names; however, I believe buyers will soon be able to gather more information about sellers they are purchasing from. If this happens, Amazon will bolster its trust with buyers even more. I look forward to seeing if this actually rolls out, and to what extent transparency is revealed.

Overall, Covid-19 has pushed more retailers into the digital space. It's become a survival mechanism to have a digital presence, and marketplaces like Amazon are amongst the biggest beneficiaries. We are on pace to see a 32% YoY growth in e-commerce, and Amazon owns about 39% of that market share. I expect to see more businesses adopt an omnichannel strategy to diversify their online presence across multiple marketplaces.

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Improvements in tracking and sharing data with external sources are something Amazon recognizes as a gap in the platform for marketers and advertisers. Amazon has been slowly improving these features by incorporating Universal Tags inside the storefront to track ads' performance to a store page. They also rolled out Amazon Attribution, which allows us to track performance from off-Amazon sources to a product detail page. I'm expecting to see further advancement in the sense of our ability to add Facebook or Google Pixels/Tags to the backend of Amazon Attribution to share performance data to the different networks. This will allow the other platforms to optimize ads based on performance and more transparency on performance on the platform.

With Covid-19 shaking up supply chains and e-commerce, it's no surprise that even some of the biggest companies are having pains with fulfillment. I'm expecting significant investment by Amazon in its fulfillment centers. This is obviously a high priority issue as Amazon recently named Dave Clark as Jeff Wilke's replacement as Vice President of Retail Operations and the likely predecessor of Jeff Bezos when he decides to leave the job. Dave Clarke is the mastermind behind Amazon's current logistics network. He took this over in 2013, and by 2019 Amazon was delivering 46% of US packages purchased on its platform and consistently delivering on its 2-day and 1-day shipping promise to customers. What can we expect? I would expect shipping quantities and inventory limits to be lifted in Q1. As vaccines become more widely available, I foresee warehouses and fulfillment centers operating back at capacity. The end customer will start to see Prime shipping, 1-day shipping, and same day shipping available and meeting customer expectations.

Reviews continue to be a major challenge on the platform: a classic chicken or the egg story. It would be best to have lots of great reviews to sell products on Amazon, but you can't get any sales until you have some reviews. Amazon has attempted to address this pain point with programs like Amazon Vine or the Early Reviewer Program. As Amazon becomes more selective about the brands it works with, I expect two things to happen: 1) Stricter guidelines and savvier algorithms to recognize inauthentic product reviews, and 2) More internal programs allowing sellers to get their products in front of potential customers. Brand Registry will still be a major piece needed to participate in some of these programs. One of the features released this year that we are a big fan of is the Amazon Request a Review feature, which tends to get better results than using a Post Purchase Email Sequence (PPES) leaving the PPES as a brand opportunity to delight your new or existing customers further.

I expect Amazon to slow down its private label brand expansion. Congress grilled Mr. Bezos this year as they investigated the anti-trust issues. Amazon is using sales data and supply chain data to create competing products,  to the frustration of many small businesses and private label sellers. With the negative publicity and potential for future litigation, I'd expect Amazon to push off its private label brand expansion and focus on its advertising platform, which generates more revenue.

Voice search

The key element here is that in terms of voice, Amazon is leading the way, so the below will highlight how to rank on Amazon and therefore also rank on Alexa.

Selling on Amazon, you might not always notice some of the little things that happen. And one of them that gained popularity this year was a little dark blue badge with the words ‘Amazon’s Choice’ on it. It’s actually been here since 2015, when Amazon used it to streamline purchases made from the Echo, but now it’s changed to mean ‘Amazon’s Choice recommends highly rated, well-priced products available to ship immediately’ when you roll your cursor over it.

When Amazon’s Choice badges started in 2015, buyers who ordered items via Echo had a way to make purchases more efficiently through smart speakers, as the Amazon’s Choice label grouped voice searchable products together to make the process easier. Because Amazon has so many products on it, using voice search to sift through all the differences would have taken way too much time. Imagine if you were trying to order a phone case — how would you use voice commands to narrow things down between colour(s), material, design, price, buyer, and buyer metrics? But with Amazon filtering the best of the best (in terms of seller rating and features offered), your search would be a lot easier and faster. This is only going to pick up more momentum as the year goes on, and as it evolves, so will voice purchases.

Pandemic influence

The SERPs on my home page, before Covid hit the UK:

The SERPs on my home page, shortly after Covid hit the UK:

This was an interesting variation on how popular trends influenced how Amazon highlighted products. It makes sense if we look at the core function of Amazon. Amazon was built to sell products and every ranking factor can be brought back to that simple fact. If you sell, you do well. Amazon saw these products had shown an increase in demand, so it moved away from its personalisation aspect (which has previously worked extremely well) and adapted to “Clearly there's a huge demand for these types of products.” This dissipated after a while, and we had back the old-school Amazon we all know and love. But it highlighted a ranking factor that no one previously accounted for: Trends. Amazon will adapt to trends to help it sell products, and it will be interesting to see how/if this evolves [post a global pandemic).

Amazon SEO

In the past year I'd say the biggest trends towards success for Amazon SEO is the keywords research behind the products. When Amazon is deciding which products should appear highest for a user’s search, it will use a variety of different factors to determine this. One of the most important of these ranking factors is the relevance of the product to the search that’s being made.

One way in which Amazon determines this relevance is by looking at the keywords being used in the product listing. If the same or similar keywords appear in the product listing as those that are being used to search Amazon’s product list, then Amazon will rank that product higher than a listing that doesn’t include these keywords. In addition to this, the more prominently that keyword is placed, the more heavily Amazon weights that keyword, so a keyword appearing in the product title will be more effective than one appearing in the bullet points, which will be more effective than keywords appearing in the product description. In the past, the better you were at this, the better you ranked and, historically, Amazon has only evolved on this. However, the biggest and increasingly important Amazon SEO trend right now is driving sales from sources outside of Amazon.

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Images & Videos in listings

This has been one of the biggest new features I've seen this year. Traditionally, images would arrive in the SERPs and would be a key factor in conversion. The quality and volume of images are not only part of Amazon’s guidelines, but are also a ranking factor. Amazon states that product photos should have a white background (at least for the initial images) and that they should only feature the product. The more images that are shown, the more a user is able to see of the product, which helps to inform their buying decision. Because of this, Amazon will provide a small ranking benefit to products with more images. In addition to this, image quality is important, so ensuring that the image can be enlarged without becoming pixelated will also improve rankings (roughly 1000x1000 pixels is ideal). The new element of adding videos instead of images has been a revelation that has increased CTR and conversions, drawing more attention in the SERPs. If Amazon can somehow use its personalization elements in the coming years, for these videos, we're looking at something groundbreaking.

Data privacy

I think Amazon could care less about privacy. If anything, more privacy and lack of data will hurt their business model.  Amazon will do everything it can to toe the line of the law in each country it sells in, depending on their laws, but we've seen that mainland Europe is specifically targeting Amazon with legislation to try and cut Amazon’s power base here. Amazon needs your data to evolve and improve shopping experiences, so it will fight tooth and nail to have as much as it possibly can.

Delivery

This will only gain in importance and is so, so useful to make brands more competitive with other sellers that are fulfilled by Amazon, but FBA sellers will continue to have an advantage. I would always suggest considering becoming an FBA seller, because without this status, it’s likely to be very difficult to rank well for many of the bigger, more relevant keywords within clients' niches and the revenue is likely to be lower without this boost.  This will only continue for brands of any size!

If you work in any form of commerce, Amazon is coming for you. We've seen the global shift towards online groceries due to the pandemic, and Amazon’s move into this is no coincidence for its UK site. Recently, they've partnered with American Express to move into the financial sphere. I guarantee it will not be long before you can buy a car or even book a holiday through Amazon. For those in the UK wondering what Amazon will do next, my advice is, ALWAYS check what moves they're making in the US because we always get it next! If you work in any form of commerce, get on Amazon as soon as you can, or risk falling behind when it steps into your field.

Visit Amazon Stores - Amazon has already been experimenting with “Visit Brand Store” via product pages this year. We will see more push from Amazon for brands to create stores.  To encourage brands, Amazon may release more store visits data valuable to brands and add Amazon live features via Amazon Stores, so buyers can directly engage with the brand.

It’s my belief that brands need to be preparing for an ugly Q1/Q2 now. In many aspects especially because of production timeframes, it may be too late if they have not already been doing this. By ugly, I mean busy… busier than 2020 was when COVID started. Politics aside, the virus is soaring out of control, and I believe it’s likely that the surge to eCommerce will rise to new highs in the very near future.

Stay tuned...

Big thanks to our panelists!

Robyn Johnson - @AMZRobynJohnson

Zach Zorn - @MoneyNomadZach

Will Haire - @BellaVixMarketing

Dan Saunders - @DanSaunders86

Prabhat Shah - @daytodayebay

Eddie Levine - @Eddie-Levine

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