Logan Nielsen is a senior retail marketplaces sales development manager at Acadia.
Amazon Prime Day 2023 is quickly approaching. Are you ready?
The summer retail holiday can offer brands a sales boost at a much-needed time, as well as a wealth of customer intel. But preparation is critical: going into Prime Day is like going into battle. This year, while Prime Day may be the same, the world around it has changed, and brands’ focus has had to change as well. To succeed, brands need to take a dual approach, optimizing their operations and advertising strategies to make the most of the sales spree without leaning too far out over their skis.
Before we dive into four new strategies we’re leveraging for Prime Day this year, let’s look back on what happened in 2022.
2022 Prime Day in review
Last year, brands faced specific challenges around Prime Day that were specific to 2022’s unique set of challenges.
Average order value was up over 2021, making it Amazon’s biggest Prime Day ever. Meanwhile, average product prices were down 3% site-wide on Prime Day (adjusted for inflation). That’s a significant reduction in overall prices compared to 2021, when discounts from brands were negligible, according to data from Analytic Index.
That said, high inflation impacted the approach to the holiday. A big challenge in 2022 was that many brands hadn't yet passed on price increases to customers after months of facing rising costs from suppliers. This meant that many brands were reluctant to run discounts over Prime Day and further erode their margins. In 2022, 31% of our clients chose not to participate, up from 25% compared to 2021.
This year, those price increases are generally fully baked in and our clients are ready to discount again. Consumers may be more likely to hunt for deals too, given price inflation, something that’s a hangover from 2022.
So what worked last year? External marketing efforts to push customers to Prime Day sales was one way brands drove people to their Amazon offers. Brands who promote their deals through social media channels, newsletters, and engaging influencers, are more likely to get eyeballs on their deals, without relying only on paid advertising efforts.
Advertising efforts are also key to promoting deals and maximizing the influx of traffic during the holiday.
The cost of advertising on Prime Day 2022 was lower than 2021, with average ACOS down 12%, compared with ACOS on Black Friday and Cyber Monday increasing by 20%. While it’s true that brands should expect the cost of ads to increase around Prime Day, that is just one side of the math equation. Purchase volume and purchase intent is high during this period, and so the overall cost of acquiring sales is usually very good.
This all means that Amazon Prime Day is a good investment for advertisers. From a marketing perspective, last year’s best strategy was to build awareness in the lead up to the event, with organic keyword ranking and creative on site driving performance for brands. Brands – particularly in categories like beauty and healthcare – that were able to get customers to add products to cart ahead of Prime Day were positioned to win.
Like every year, there were glitches in 2022. Prime Exclusive Deals and Lightning Deals both proved to have technical problems on the day of the event, with scheduled Prime Exclusive Deals launching on product pages and then disappearing without warning. Lightning Deals, which need to strike at the exact promoted time to be effective, also had glitches, with some showing up late or being suppressed from PDPs. It’s difficult to prevent these types of errors from happening, but what’s most important is having a back up plan. Coupons – while maybe not as compelling as Lightning Deals and Prime Exclusive Deals – were a quick-fix supplement to deals that are less prone to glitching.
The biggest learning from last year was to be prepared – Prime Day is like the Super Bowl in terms of big brand moments, and it can reposition your company to hit sales goals for the rest of the year when done right. With all that being said, let’s get into how to best prepare for this year’s event.
Source: Screenshot from Amazon.com
C4 Energy is a brand that doubled-down on Amazon Prime Day in 2022, with celebrity spokesperson Kevin Hart hosting multiple Amazon Live appearances during the event.
2023’s new tools and best practices for Amazon Prime Day
Armed with last year’s knowledge, it’s time to build your Prime Day 2023 conquer strategy. It’s a team sport, so I also asked my colleague Ross Walker, senior retail media manager At Acadia, to weigh in with the best advertising tips and tricks for this year.
Unlock new tools using the Amazon Marketing Cloud
A relatively new tool is the Amazon Marketing Cloud, so figuring out how to make the most of that toolbox should be a top priority for brands looking to make the most of this year’s event. We’re bullish on AMC, which has become more usable and more accessible over the past 12 months. Used properly, brands can better understand the path to purchase on Amazon (as opposed to last-click attribution only), which products in an assortment lead to future sales for the brand, and which ad sequences are best at driving new-to-brand sales. Also new to this year is the ability to create custom audiences and deploy ad sequences to audiences based on how they responded – or not – to past ads. That means this year’s Prime Day should be saddled with more in-depth customer data on the other side of it.
The first feature to get familiar with is the complementary products query, which shows customers what products are typically purchased after they’ve bought your product. AMC will now show you the percentage of people who bought what after an initial purchase, with an entire data tree of information around first purchase and follow up purchases, and that can provide valuable data around what customers are buying.
Another key AMC tool is the add to cart audience, which creates a DSP from all of the customers that added your brand’s products to their cart in the last 90 days, so they can be targeted to make a purchase relevant to what they’ve shown interest in already.
These are all tactics that are relatively new, and well suited to brands who are already successfully leveraging Amazon DSP advertising and looking for an extra edge this year.
Get Sponsored Brand Ads ready early
Another win for marketers on Prime Day is to invest in Sponsored Products ads, so that their listings are at the top of the funnel and get the most reach. Somewhat controversially, Automatic Sponsored Product campaigns are also a good way to take advantage of Prime Day, because they unlock special placements on Amazon search and product pages that we can’t access with manual campaigns. One challenge new to this year is the turnaround for Sponsored Brand Ads, which used to take a few hours to get approval from Amazon but now take more time – in some cases, up to 56 hours. The earlier you start, the more data you can collect around the ad, and the further the ad will go when it’s live.
Be sure to think beyond static ads here as well. Sponsored Brand Videos can play a major role in educating customers and building brand awareness. (Learn more about Sponsored Brand Video ads and best practices for creative in our Amazon content best practices swipe file!)
Maximize inventory sellthrough
Also new to this year is Amazon’s capacity monitor, which means maintaining proper inventory levels to support promotions will be critical.
Amazon has flipped its inventory system, treating it differently than years past. The IPI (inventory index) score has taken a back seat to the new capacity monitor, which allows brands to request more storage space – for a fee. So how should brands play this? One of our contacts at Amazon – an FBA inventory specialist – advised that brands should prioritize increasing sellthrough in order to up their inventory limits and win more space in FBA shortage. Focus on moving your best-selling products as fast as possible, and the space will clear up for you. Amazon wants to see overall volume and demand and will reward those moving the most units. This is what Prime Day is for.
Perfect the art of the deal
Customers shop Prime Day because they want good deals. That doesn’t mean it’s a race to bottom-barrel prices, but it’s necessary to stand out from the sea of other deals and make people feel like they’re getting the best bang for their buck. It’s also necessary to be savvy about which products go on sale. Your entire product catalog doesn’t need to be marked down. Maybe you only markdown your hero product, which is a gateway to the other products. Or you push the product you need to clear inventory for. Either way, people are looking for good deals and brands participating need to come prepared with something competitive in order to get seen.
Sitting out from the event may mean saving margin, but it can also push customers to your competitors who are taking advantage of the day. Read our 2022 Prime Day recap to see our analysis of brands who “went dark” on Prime Day, versus those who chose to participate with deals and promotions.
A Prime Exclusive Deal on Amazon in 2022.
Amazon Prime Day 2023 Preparation Countdown
Timing is everything when it comes to Prime Day, and brands should be getting ready now to ensure everything goes as smoothly as possible. Here’s what to do and when to optimize sales.
Two months out:
With two months to go, you should be thinking about inventory, manufacturing capabilities, fulfillment centers for this year’s Prime Day. First, decide what products will be promoted and what kind of deals you’ll be running. Then be sure to notify your partners about a spike in sales and ensure inventory is placed. At Amazon, June 15 is the FBA cut off for getting inventory in for Prime Day. Now is also time to set up your backup plan: I recommend having merchant fulfillment in place to ensure you don’t miss sales if FBA inventory sells out or unexpected products start selling.
Creative should also be prepped now. Use videos, banner ads, brand story modules and other display ads to promote Prime Day deals. (Get some ideas for these creative content capabilities in our Amazon content best practices swipe file!)
One month out:
This is the wrapping up stage for optimizations. At this time, promotions should be scheduled on Amazon, so you can catch early problems with Prime Exclusive Deals or coupons. Also make sure you’re working internally to plan strategies like email campaigns, traffic strategies, social strategies. Now is the time to also get your storefront prepped and ready with Prime Day related banners or a landing page.
Two weeks up to Prime Day:
When you’re two weeks out, your inventory is at the fulfillment center, your promos are set. Now is the time to audit. Did your coupon get suppressed? Did your deal go through? Walk through PDPs to make sure they’re clean and optimized. Is all creative live? Check and re-check brand registry and seller’s port to make sure everything is set. Once it’s started, it’s too late to fix.
In the lead up, you’ll also likely see lower conversion rates as people wait out for Prime Day deals, but pay attention to add-to-cart rates – they’ll start rising as people get ready to buy on the big day.
Preparing for the worst:
Something can go wrong even for the most prepared brands. During BFCM last year there was a widespread advertising reporting outage. Last Prime Day many clients were affected by pre-booked discounts and coupons that didn't display on the product detail page.
Deals being suppressed is the worst case scenario, so be ready to get a promotion back up and running. For ads, have your agency on call, and have back up plans for your back up plans. Hope for the best, but plan for the worst. Be aware that things break, be on call and ready to pivot.
Get support for Amazon Prime Day
Prime Day is the Super Bowl for the retail marketplaces team at Acadia, where we have been helping brands prepare for and be successful on Prime Day since the event first launched in 2015 when we were known as Bobsled Marketing. The tools and best practices have changed a lot since then, but we always take the time to reflect on what strategies need to change and adapt in order to build a custom strategy for each client. Learn more about our Amazon full channel management services.