Here is a sneak peek at what 2022 holds for Amazon's sellers and what you can do to grow your business in the coming year!
Last year we had called on our Amazon experts to make some predictions for 2021, and many of those turned out to be true. For instance, we predicted that sales and customer demand would skyrocket in the first and second quarters of 2021. This chart shows the jump - sales on Amazon in the first two quarters of 2021 were 44% more than the same time in 2020. We also predicted that more big brands would start selling on Amazon, pushing everyone to optimize their ad spend. This also turned out to be true. 42% more big brands began selling on Amazon in 2021, and nearly 90% of brands adopted Amazon Advertising as part of their broader marketing strategy.
We foresaw that 2021 would see Amazon emerge as a full-funnel advertising solution. A whopping 88% of all Amazon brands are leveraging Amazon's Demand Side Platform to reach customers both on and off the platform. And it has been worth it! Half of these brands saw a 7X return on their advertising spend while the others reported 4 to 6X times return on their investment.
We think that Amazon will continue to gain similar momentum over 2022 and beyond. There is no better time to start selling on Amazon than today! Read on to discover five predictions for Amazon sellers in 2022 and ways to leverage these trends for your own store.
Find the short version in the infographic below:
More opportunities for direct customer connections
Amazon has slowly continued to add new features that allow brands to connect directly with their customers. For instance, you can use Amazon Live to live stream your brand story and build a following or use Amazon Attribution to measure ad performance on non-Amazon channels like Instagram. We expect this trend to continue as it benefits everyone—smaller brands get an opportunity to establish their community of followers and repeat buyers while bigger brands can use a cohesive marketing strategy across all their channels.
"In my opinion, the biggest trend in 2022 is not a product or a category, but instead it will be the release of a seller-managed DSP (Demand Side Platform)." - Quin Amorim, Founder of Prolific Zone Agency
How you can leverage this trend
- Plan your Amazon Live campaigns for 2022. Amazon Live is a great way to add more social proof to your products, and the visual explanation improves your customer's end experience leading to more positive reviews.
"I believe one of the biggest opportunities for brands and sellers on Amazon in 2022 is going to be the use of live video. Amazon Live is continuing to grow in popularity, and its uncanny ability to help launch new and innovative products, boost current product sales and build brand reputation is unparalleled" - Shannon Roddy, Founder ofMarketplace Seller Courses
“I think Sellers should focus on Live streaming shopping: using platforms such as Twitch, Instagram, or Amazon Live” - Jordi Ordóñez, eCommerce & Amazon consultant, jordiob.com
- Plan a cross-channel marketing campaign. There is no longer an expectation of advertising only on Amazon. Amazon has now made it easy to grow your brand presence on other channels and drive all that traffic to your product pages. You can also use our Amazon Traffic Insights tool to examine external traffic channels and use the data to get more sales. This tool provides analytics reports and traffic volume estimation for the largest number of traffic channels on the market.
"Expect to be able to connect with followers more closely on new product launches and deals, and for followers to see more of your content as they browse Amazon. The adoption of Attribution will increase dramatically as more brands enroll in brand referral bonuses and drive outside traffic into Amazon. If you aren't driving outside traffic now, in a year from now, you will." - Liran Hirschkorn, CEO and Founder at Incrementum Digital Agency
- Align with customer values. Customers today are looking for brands that match their value system. They look for products that give priority to quality, aesthetics, and ethics instead of pricing. Building a brand identity around values will help you establish a loyal customer base.
“Sustainability, diversity, equity, and inclusion are among the top issues that are important to consumers. As brands seek to differentiate themselves in the market, as well as Amazon launching a program around sustainability and social issues, brands that are actively aligned with these causes will benefit.” - Will Haire, CEO, and Founder - BellaVix
Supply chain challenges to remain till mid-2022
The post-pandemic economy is battling supply chain challenges all around the globe, and we don't see things easing anytime soon. Supply chain bottlenecks and inflation on raw materials, labor and trucking costs are causing product shortages on Amazon. On average, 15% to 23% of products are currently out of stock on Amazon's online marketplace, and the situation is not something that can improve immediately. Many countries around the world are still grappling with escalating pandemic cases and re-occurring lockdowns, and it's most probably going to take all of 2022 and even some of 2023 for the economy to recover.
"The early part of 2022 will likely be tempered with the remaining carnage from the supply chain issues of 2021. Some companies will have an excess of inventory that didn't make it to shelves in time for Christmas, while others might have trouble restocking before their remaining stock runs out. This means being proactive and flexible about your supply chain, and delivery will still be key into the next year." - Robyn Johnson, Amazon expert and consultant, Co-founder of Marketplace Blueprint agency
What you can do about it
- Increase your prices as stock levels drop. Inflation is a reality, and 2022 is not the time to undercut prices. It makes more sense to increase your profit margin and have a buffer in case you have to deal with a month or two of out-of-stock items post-holidays.
"95% of Sellers will raise their prices TWICE in 2022. That's how bad inflation is right now. COGS are up, logistic costs are up, and so is the payroll." - Steven Pope, Founder of My Amazon Guy
- Plan your inventory management down to the last detail. Schedule orders, look at data to anticipate the volume, and be proactive about stock levels. Keep an eye on competitors so you can up your prices as soon as they go out of stock. Also, think about ways to reduce costs. Can you get rid of extra packaging material? Can you replace an international supplier with somebody local? The more you refine your inventory management, the better your profits for 2022!
"As 2022 is quickly approaching, Amazon sellers will need to keep even more attention to detail on inventory management. I don't see production lead times improving in the near future. Also, I would encourage sellers to look at their current product packaging and see if there are changes that can be made to reduce packaging space and costs." - Zach Zorn, Owner of MoneyNomad.com
Greater focus on brand authenticity
2022 will see Amazon taking more steps to get rid of cheating on the platform. From fake products to fake reviews, Amazon plans to crack down on imitators using a combination of technology and manual screening methods. For instance, Amazon is already doing manual review assessments and has added several new features and badges to the storefront that let you establish your brand authenticity.
"Consumer behavior also changed in 2021 drastically as potential customers are increasingly visiting the storefronts to ensure sellers are reputable. This change has been brought about by a media focus on counterfeiters and bad actors taking advantage of the Amazon platform. From fake reviews to ranking manipulation, there is plenty of reason for buyers to be skeptical of any brand. Your storefront can provide customers ease of mind before making their purchase." - Colby Almond, Director of Online Marketplaces at ViscoSoft Inc.
How you can leverage this trend
- Treat your Amazon storefront like your website. Amazon has provided several new and useful modules, metrics, and attribution features that allow sellers insights into their storefronts. Make sure you are aware of all the changes and incorporate them regularly to establish customer trust.
"Amazon has spent a lot of time and money improving the storefront experience, and I expect to see that focus increase in 2022. Be sure your brand isn't left behind." - Colby Almond, Digital Marketing Speaker, eCommerce expert, Director of Online Marketplaces at ViscoSoft Inc.
- Bring your non-Amazon products to the platform as soon as possible. This is especially important for smaller brands with a niche customer base. If you are thinking - "My website is doing well through direct sales. I don't need to be on Amazon.", then it's time to change the mindset. 2022 is going to see a lot more brands join Amazon to avoid copycats imitating their brand over there.
"As of today, there are Amazon and DTC sellers who sell through the Instagram website, but not in the marketplace. These are big brands or just big companies. These two major Amazon parties are likely to exchange platforms. Amazon sellers strive for diversification and are willing to grow their brand through website, Instagram, etc. Meanwhile, DTC sellers are willing to do the opposite: they wish to move to the marketplace, build and grow their brand on the marketplace and receive sales. This is quite rational as Amazon’s huge traffic and potential sales may be the lucky strike for a seller.” - Vitalii Khyzhniak, CEO at Profit Whales
- Protect your Amazon listings - Products that you are selling on Amazon can also be copied! You can use our Listing Protection Tool to set up alerts on email and SMS. The tool will notify you immediately if someone copy’s your listing and you can take action fast before facing a drop in sales.
"Brands are already reaching out to consumers via Amazon channels, and this will only increase without the need for intermediaries. In addition, some brands who were reluctant to be on Amazon are seeing incorrect catalog entries on Amazon. This is prompting them to increase their presence on Amazon." - Prabhat Shah, eCommerce, and Digital Marketing Consultant, Daytodayebay
Amazon CPC rate to increase in several categories
The Amazon platform lets sellers create ads about their products and target specific keywords. When customers search for those specific keywords, your products show up on top of the search results. However, given the competition, you pay Amazon per click, which is your Cost Per Click or CPC. With the increase in the number of sellers and so many new products being launched in 2021, CPC rates are set to go up.
"In 2022, I think, we'll continue to see CPCs rise as more and more institutional money (Over $12B as of November 2021) is raised and put into buying, then running Amazon stores. Conversion rate increases will be pivotal to avoiding the rising advertising costs, logistics costs, and manufacturing costs" - Jacob Grau, Partner at Proventus - Proven to Succeed
What you can do about it
- Optimize your product listings - CPC costs are an issue only if the clicks you are paying for don't convert to sales. To convince customers, you have to make sure you have given sufficient thought to your listing design and used images, videos, and high-quality content. You can use a tool like Sellzone’s Listing Quality Check tool to scan your listings for content errors as well as compare them with competitor listings.
One way that I've seen brands really stand out is by using video for their SERPs and in Sponsored products and brands. Using these, we've seen a massive increase in Search traffic, CTR, and Purchases. This has been one of the biggest new features I've seen. - Dan Saunders, eCommerce Channel Manager at Stanley Black & Decker, Inc.
- Be strategic in your ad spend - Sponsored products are not the only PPC campaign options available on Amazon. You can run different ad types, test your ads and try PPC optimization strategies on less competitive long-tail keywords. These strategies can reduce your CPC costs as well as make your campaigns more effective.
"With the changes with iOS and Facebook, I think you will see more ad dollars being shifted to Amazon. This will raise CPC's for many categories. This means to keep costs downs, brands will have to continue to get more strategic in their ad spend and diligent with campaign structure. Be sure to test outside of Sponsored Products as some of the CPC's in the new ad products can be lower." - Robyn Johnson, Amazon expert, and consultant, Co-founder of Marketplace Blueprint agency
- Don't forget to target voice search - Amazon is pushing sellers to run Alexa ads and offering buyers more incentives to purchase from voice-optimized listings. Amazon promotes products with the Amazon's Choice badge in Voice search results and encourages top sellers to target keywords their customers will say instead of type. With voice search set to become more popular over 2022, this option is worth exploring.
"Voice search in eCommerce is on the rise. The best way to win this and increase your New To Brand Sales, Share of Voice, and Click-Through Rates is with an Amazon Choice tag. This is only going to pick up more momentum as the year goes on, and as it evolves, so will voice purchases." - Dan Saunders, eCommerce Channel Manager at Stanley Black & Decker, Inc.
More sellers will use outside experts to grow their business.
As Amazon grows, the Amazon ecosystem is becoming more crowded and complex. You cannot get ahead by just getting the basics right. 2022 will see more Amazon sellers turning to Amazon experts for help. Brands will use technology, tools, and consultants for everything from marketing to product ideation and design. Entrepreneurs who have smart people on their team and smart technology in their hands will be outperforming competitors in 2022!
"Amazon will likely continue to release new features in their Manage Your Experiments section to make A/B Testing a bit easier, but Amazon sellers need software tools and expert help to compete in the ever-changing Amazon market." - Jacob Grau, Partner at Proventus - Proven to Succeed
How you can leverage this trend:
- Invest in creative professionals - You need creatives to help make your listings, ad content, and videos stand out.
"Creative is going to be big in 2022 when it comes to Amazon Advertising. Brands that are only focusing on basic sponsored product ads and bid optimization will need to evolve their strategy. Advertisers will need to implement and analyze their copywriting and design tactics as well. This will lead to more advertising experts in the industry, bigger budgets, and an increase in the competition overall." - Evan Facinger - Director, Sales, and Marketing at Foremost Media
- Use tools for PPC - Sellzone has a variety of tools like PPC optimizer for optimizing your PPC campaigns and Keyword Wizard to find the right product keywords to target for Amazon SEO and better search visibility.
Here’s wishing all our readers a Happy New Year in advance. May you have a lot more sales and a prosperous year on Amazon in 2022!
Want to grow your Amazon business in 2022? We have put together a list of events such as Ecommerce conferences, workshops, seminars, and webinars for 2022. So mark your calendar, it’s going to be an amazing year ahead!