Smooth like butter
What’s going on in retail?
Let’s start with recapping last week’s fall sales event from Amazon. I’ve seen countless headlines about how it was a failure in comparison to July’s Prime Day:
“Amazon’s fall sales event estimated to have fallen short of Prime Day — while still raking in billions” (Retail Dive)
“Amazon shoppers shrug off second Prime Day sale” (CNBC)
I guess selling over 100 million items on a made up holiday is not enough these days ??
To quote an Amazon exec from their official recap: “Our Prime Early Access Sale was a great kickoff to the holidays, and the best part is that it’s only the beginning. Customers will find millions of must-have deals throughout the season that will help them continue to save money on gifts for loved ones”
But the real win was highlighted by Bank of America analyst Justin Post who said “Ultimately, we view this Early Access event as incrementally beneficial, as both a branding event for Prime and potentially smoothing holiday demand aiding with logistics”
Across the board, retailers are struggling with excess inventory. According to the US Census Bureau there’s about $609B in excess inventory — 21% higher compared to last year.?
So the fact that Amazon was able to clear billions in sales over a two-day period, while thousands of other retailers are stuck with crowded warehouses has got to be a win. Especially this early in the holiday season.?
Recap data from the Numerator, who conducts real-time research with Prime shoppers found that:??
From our view, there were about half a million searches for “deals” the day of the Early Access launch, with daily search volume increasing by +160% compared to the same time last year.?
Search interest didn’t quite reach the peaks from July’s Prime Day, but this event drove the second highest search demand for “deals” this year so far.??
Also worth noting that searches for “gifts” are down, and remained down by ~15% YoY during this promotion. Is this a signal at how deal-driven consumers are these days?? Are shoppers now prioritizing deals over gifting terms like “best gifts”??
Strategy Corner?
The consumer price index report was released last week and we got a look into the elevated prices we’re collectively facing in our everyday lives. Inflation accelerated in September, with the CPI rising 0.4% month-over-month and 8.2% year-over-year.
Here’s a look at some of the top categories and their associated year-over-year costs:
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So if your sales performance is struggling, think about your end customer and the challenges they are facing. Your largest headwind these days is likely inflation, not rising CPCs or CPAs due to increased advertising costs.?
Simply put, consumers have less discretionary funds to spend on your products/services. Just look at this insane change of the personal savings rate over the past 2.5 years.?
When you take a step back and think about how your target audience needs to find a way to justify purchasing your product (likely a very non-essential purchase… sorry) with the cost of butter up +32%, it should serve as a wakeup call to your marketing strategy.
(Sidenote: I can’t explain how awesome it feels knowing you just clicked a link to a chart about butter prices)
The core components of marketing like storytelling, targeting, incrementality, timing, and persuasion are more important than ever.?
So going back to Prime Day and this whole “shopping early” narrative you keep hearing from me and your Google reps. It’s because we need to assume that once a shopper makes their holiday purchase, they’re going to be done for the year. They don’t have the cash to splurge on items throughout the season like they have in years past.?
Good news? We’ve seen growing evidence that consumers’ consideration sets are expanding as people continue to assess the right buying choices amid rising costs.?
And you can help them.?
Survey data from our recent global insights briefing highlights how shoppers have now become even more intentional about the items they purchase and are using online sources more to help plan ahead for key shopping moments. For the past year, more than half of US shoppers have been visiting multiple websites before settling on what and where to buy.
More than half of US consumers say that brands and retailers are not doing enough to support them in times of inflation. Throughout their research journey, shoppers in the US are being much more intentional about the products they purchase, with:?
Want to be in a position to better help consumers make decisions throughout their purchase journey and buy more of your products?
Move beyond last-click attribution to better allocate your marketing resources into channels and campaigns that actually make an impact. Consumer journeys are expanding in both length and number of touchpoints, so stop investing all of your funds and resources into the last touchpoint.?
You can do this quite easily once you upgrade to GA4. Check out this sweet multi-touch attribution visual that comes baked into the UI:
By moving beyond the bottom-of-the-funnel, a world of possibilities to grow your business emerges. You’ll quickly be able to see the impact that upper-funnel activities can have on your overall performance, and will hopefully begin to allocate your resources accordingly.?
That’s all for this week.?
Co-Founder & Rainmaker @ Cause of a Kind | Host of Strictly From Nowhere Podcast | I build websites and software. @cuzzinjustin | Everyone’s Favorite Cuzzin.
2 年These are terrific Ben Kruger! Keep going! I especially enjoy the multi attribution view in GA4. Have not quite adopted GA4 fully yet, but its inevitable. Love all the statistics. You'll have to teach me how you source such data, Sense. ??