Amazon Cyber Week 2021: The One Mistake That Will Sink Your Sales

Amazon Cyber Week is one of the most important shopping events for sellers. Also known as Cyber Five because it includes the days between Thanksgiving and Cyber Monday, Cyber Week is a relatively new term in ecommerce that underscores how Black Friday has evolved into something much more. This seasonal event is a golden opportunity for brands to boost sales from shoppers who are hungry for deals, but there is one mistake that is all but certain to hinder your success.

Amazon Cyber Week is Now Part of Black November

The first Black Friday took place in Philadelphia during the 1950s. Since then, it has become one of the busiest shopping days of the year. People all over the country wake up at the break of dawn to flood their favorite retail outlets in anticipation of jaw-dropping deals. It’s shopping madness. At least, it used to be.

The pandemic changed Black Friday – probably forever. Foot traffic to brick-and-mortar stores fell 52% in 2020, according to Adobe Analytics. Many shoppers didn’t want the hassle of in-store capacity restrictions. Others feared large groups due to the risk of contagion. Perhaps most of all, it was easier to find deals online. Not only were most major retailers hosting their own Cyber Week events, but many had started in early November. Walmart launched Black Friday for Days, an online sale that turned one day into three separate events. Target hosted Black Friday Now deals, which took place across multiple Thursdays. Countless other retailers ran similar promotions.

The same thing is taking place this year. Walmart just announced that Black Friday deals will take place through the month of November. Lowes is launching its “Season of Savings” sale on October 28, which will offer new deals every week through December. Over at Amazon, holiday shopping has been in full swing for weeks. The retail giant began “Black Friday-worthy” deals at the beginning of October, and recently announced it has already sold one million toys for the holiday season.

The key takeaway here is that Black Friday has become Black November. The change culminated last year when the pandemic forced Amazon to push its annual Prime Day event to October. The highly anticipated event generated more than $10 billion in 48 hours and brought customers into an early holiday shopping spirit. Customers enjoyed incredible deals last October, many of which rivaled Black Friday savings. This created an appetite for early holiday savings, which retailers have jumped on.

Amazon Cyber Week 2021: Three Challenges for Brands

Cyber Week 2020 broke just about every record possible. Not surprisingly, e-commerce dominated sales. Adobe Analytics reported that Cyber Week generated a total of $34.4 billion, a 20.7% YoY increase from 2019. More than a third of this spending took place during Cyber Monday, making it the largest online shopping day in U.S. history. Amazon reported independent businesses surpassed $4.8 billion in worldwide sales from Black Friday through Cyber Monday, a 60% YoY increase.

This year also looks promising. A recent report by eMarketer forecasts U.S. retail holiday online sales will rise 11.3% to $206.88 billion. Analysts predict total holiday sales in 2021 will reach $1.1 trillion, which means e-commerce will account for a record 18.9% of holiday shopping.

A bar graph showing U.S. holiday retail sales over six years.

Despite a positive outlook, the 2021 holiday shopping season will not be without its problems. Many people are tired of talking about COVID-19, but the pandemic is not done with us. The following are the three most important factors expected to impact brands and retailers this holiday season:

  • Raw Material Shortages
    Brands can’t manufacture goods if they don’t have access to raw materials. According to a recent report by the Institute for Supply Management (ISM), companies and their suppliers “continue to struggle to meet increasing levels of demand.” It’s not just a problem in the U.S. The entire world is seemingly low on copper, iron ore, steel, corn, coffee, wheat, soybeans, lumber, semiconductors, plastic, cardboard for packaging – you name it. This kind of shortage has a snowball effect leading into the holiday season. Manufacturers anticipate even higher demand this year and are stocking up as much raw material as they can find, further aggravating the global shortage.
  • Logistics Barriers
    Companies depend on a vast network of ports, container vessels, and trucking companies to move goods around the world. The growth of ecommerce has bottlenecked this industry. According to reports, it takes retailers an average of 1.5 days longer to fulfill orders since the outbreak of COVID-19. Increased volume, staff shortages, and social distancing guidelines caused significant delays in shipping and receiving. This translates to an increase in costs for every part of the supply chain during the holiday season.
  • Labor Shortages
    Rarely a day passes without a major news outlet reporting on the increased demand for workers. This amplifies the impact of raw material shortages and logistic barriers. A recent Washington Post article summarized it with the following headline: How the Delta Variant Stole Christmas: Empty Shelves, Long Waits – and Yes, Higher Prices. It’s 100% true. The labor shortage in the U.S. will pose perhaps the greatest challenge to brands this holiday shopping season. This is troubling news, considering the holiday season accounts for up to 50% of annual sales for many retailers.

Amazon Cyber Week 2021: Channel Key Takeaway

There’s no defense like a good offense. This adage is mostly associated with sports and combat, but it applies just as well to brands – especially this holiday season. In many ways, this year will look like 2020. In other ways, it will be different. Nobody knows for sure, and brands have no control over the changes taking place. What brands do have control over is how they adapt and prepare. The following marketplace strategies will help you avoid and/or overcome the most likely obstacles this holiday season.

  1. Inventory Planning
    Sales and inventory forecasting is always an important part of the holiday shopping season for brands. Get your inventory to FBA warehouses as soon as possible. Last year, Amazon recommended that shoppers place holiday orders as earlier than usual to avoid shipping delays. You may remember in March 2020 when Amazon abruptly suspended inbound shipments to its fulfillment centers for non-essential items. All of this underscores the importance for brands to prepare for potential Amazon fulfillment challenges during the busiest shopping season of the year.
  2. Logistics Backup Strategy
    Even with a strong inventory forecast, you might still run into challenges. Your FBA success during the holidays depends on Amazon’s ability to deliver products to your customers. Channel Key recommends that brands consider a Fulfilled by Merchant (FBM) backup strategy that will ensure you don’t lose sales due to FBA inventory challenges. This will enable you to continue selling ASINs that are unavailable in FBA by fulfilling these orders yourselves.
  3. Start Holiday Marketing Now
    The biggest mistake brands can make this season is to wait until November to begin their holiday marketing. The traditional Thanksgiving/Black Friday start to holiday shopping is gone. The season now starts in October, and Cyber Week takes place across the entire month of November. The longer you wait to promote your holiday deals, the more sales you will lose to your competitors.
Posted October 29th, 2021 in .

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