December 6, 2020
Amazon metrics from the 2020 holiday season revealed major shifts in customer behaviors. See the trends and get insights you can leverage to optimize your eComm advertising strategy.
Amazon metrics from the 2020 holiday shopping season revealed major shifts in customer behavior. In this webinar, you’ll get insights you can leverage to optimize your eCommerce advertising strategy based on trends and benchmarks from 2020 Prime Day, Black Friday, and Cyber Monday Amazon metrics.
All right, let’s get started. Welcome, everyone. Thank you so much for joining us for our Cyber 5 results. We really quickly aggregated our data and wanted to get some data back to our community this week to help give an update of what happened, help you benchmark your results. I’m Melissa Burdick, and I’m here with Mindy Fashaw…right?
Yup, formerly Mindy Martin. All right, so take it away – let’s go to the next slide, Mindy, and we’re gonna talk today about key trends, our results, our insights, and some takeaways. I did just introduce ourselves on the next slide, but for those of you who don’t know us, I’m Melissa Burdick, I’m the co-founder and president of Pacvue, and then, Mindy is our COO. Both of us worked together at Amazon for many, many years. We should have worn flannel today, Mindy, because that’s the Q4 thing to do at Amazon, started by Jeff Wilke, but we’re both wearing green, so we’re kind of in the holiday spirit nonetheless.
And then, just a little bit about Pacvue, if you don’t know us – hopefully you do – we’re an enterprise platform for brand sellers and agencies. We operate across Amazon, Walmart, Instacart, Criteo, and many others coming soon. So, with that, we will take it away. Mindy, you’ll kick us off with key trends – oh, but before we do that, let’s talk about our purchase behavior for Black Friday/Cyber Monday. Did you buy anything interesting?
You know, I did. I would say from a deal perspective, the best deal I got is a TV, which is kind of boring, but I wanted to tell you about a couple of purchases I made because they were a little bit – one was out of character for me, and the other one was just a little bit indicative of this strange extended holiday season. So, the first one was – Melissa, you know me very well. We’ve worked together for many years, and you know I’m not a morning person, but there’s a big sale – a candle sale – at Bath and Body Works that happens – I believe it’s once a year. I’ve actually never gotten to take part in it, and usually, because it’s in-store and you’ve gotta wait in line, et cetera.
So, this year, they did move it online, and it started at 6:00 a.m. Eastern, and for those of you that don’t know, we’re here on the West Coast, so it was 3:00 a.m. Pacific Time for us. I did set my alarm so I could get up and take advantage of that sale, so, $25.00 candles for $10.00. Anyways, they did have a lot of stress on their site, there was a lot of delays in checkout, but I was able to purchase 10 candles for $100.00, so I’m excited about that one.
How much better was it to get to buy it online than to actually go to a store?
I wouldn’t have gone. Even if there was no COVID, I would have never woken up and stood in that line for some candles. And then, the other one is if you know me and you’ve talked to me, you know I tend to say – whenever I’m looking at data and trying to get insights in this industry, I do look at myself. I am a more savvy shopper just being that I’ve worked in this industry my entire career, but at the end of the day, I’m still a consumer, and I still have typical consumer behavior – I’m a deal-seeker, et cetera.
So, one interesting story for me that ties into some of the trends that we’re seeing and the data that we’ll share with you guys is I just moved into a new house on Halloween, and I was looking for a couple of leather chairs, and I found some on West Elm, so I was watching them, waiting for them to go on sale, so they had gone on sale earlier in November for 30% off, but one of our coworkers, who’s also into home furnishings, told me that he’s gotten some deals there for 40% off, and once a year, they’ll go to 40%. So, I did not buy at 30% off. I waited, hoping that Black Friday/Cyber Monday, I’d find a 40% discount.
And so, then, the deal went away, and then it came back at some point, but it was not even 10% off, so then I got super nervous, so the minute it came back at 30% off, right around Thanksgiving, I just pulled the trigger because I was too nervous at that point to wait for another 10%. So anyways, not exciting, but I think again, it's just a bit indicative about the consumer behavior and some of the trends that we’re seeing in the data. What about you, Melissa? I know that we like to talk about our shopping, and I tend to be more frugal and probably more of a deal-seeker than you. What did you buy this year – for yourself, not even a giftable item, but what was your favorite Cyber 5 purchase?
I’m a deal seeker, but…yeah. So, the interesting thing – and, this ties into Amazon advertising – I don’t know if anyone has watched the show Alex Rider. It’s an IMDB TV show, but it’s actually a great show about a teenage spy that you can watch with your kids, but it’s actually pretty cool. They just renewed for a second season. But, it’s very similar to a Peacock or Xfinity where you watch a TV show for free, and then there’s commercials, and the commercial – it’s on the Amazon network, of course. And, the commercials were very product-focused, like Lay’s potato chips, and the one that kept playing was this food – the Food Ninja? No, the Ninja Foodie, which is kind of this crock pot slow cooker 9-in-1 thing – air fryer.
So, that caught my eye, so I did buy it, although I did not buy it on Amazon, I bought it on Costco because it was cheaper, so Amazon won’t get that attribution in their data, but that’s certainly how I discovered it, so, good for…the company Ninja.
Great. Well, with that, let’s jump into some of the results that we’re seeing this season. So, these are a look at some initial results that came out from Adobe, so, on Thanksgiving Day, when many physical retailers, including Walmart and Target, were closed, in-store U.S. traffic fell 94.9% year over year according to Sensormatic Solutions. Adobe had predicted that Thanksgiving would be $6 billion, and while it was still the highest it’s ever been at $5.1 billion, it fell short of their estimate.
Shopify reported that Thanksgiving Day’s peak sales per minute from global shoppers were about $919,000.00, an increase of roughly 34% compared with last year. American consumers did spend $9 billion online on Black Friday, which was up 21.6% year over year – again, according to data from Adobe, which had originally predicted sales of $10.3 billion, so, $1.3 billion short relative to their projections. This figure still makes Black Friday – for now, at least – the second largest online spending day in U.S. history, and that’s after Cyber Monday of 2019.
Retailers who offered curbside pickup had a 31% higher conversion rate on traffic to their websites, which is really a reflection of how popular it’s become for people to buy online and retrieve purchases without having to step into stores. Adobe Analytics reports the number of orders fulfilled using curbside pickup has already grown over 100% year over year for 2020 through the holiday week.
And then, this is just a quick look at Amazon’s advertising forecast from eMarketer. I think one of the interesting things here is eMarketer has released three revised forecasts in 2020 just based on all of the changes and constant trenching that we’re seeing with COVID. The latest forecast has been revised upward from March, which was their original forecast, which they then brought down in June, so it’s just interesting some of the seesaw that we’re seeing, but they revised their forecast for 2020 and beyond for Amazon’s ad revenue, and really, after the initial onset of COVID in the U.S. combined with Amazon’s initial shift to focusing on prioritizing essential goods, eMarketer brought down their forecast in June because many brands had paused or reduced their ad spend while trying to assess and react to the COVID impact on their business.
Once Amazon got back to shipping across all categories, brands actually came back to spending at heightened levels, and we’ve seen that heightened level of spend continue to increase for a number of brands and advertisers that we work with as they continue to look for opportunities to shift budgets where consumers are shopping, and we do expect that this trend will continue well into 2021.
Another interesting data point out of eMarketer is just this continued shift in behavior in terms of where consumers start their product research. So, it’s not necessarily about where they’re purchasing, it’s where are they looking for information about products that they might be interested in purchasing, and I think what’s interesting here is the data is starting to show that it’s expanding well beyond Amazon, calling out just other marketplaces, other retailer websites, and also brand direct D2C sites, which is super interesting. I know D2C has been a big push for brands over the last several years, and so, it’s just interesting to see this trend shifting and starting to see some efficacy of brands’ efforts in building out their D2C sites.
And then, lastly for me, this really highlights the importance of cross-retailer marketing. This isn’t even about where they’re ultimately purchasing, it’s about where are they starting to look for information on their product to inform their ultimate purchasing decision. And again, for those of you that don’t know much about Pacvue, we really are a cross-e-commerce-retailer marketing software provider, so this is really aligned with what we’re seeing as well in terms of the need to be present across multiple retailer websites.
And then, this is just to show that Cyber 5 this year clearly became Cyber Month. With Prime Day kicking off the season early this year and the expected stress on the delivery industry, retailers followed suit and launched deals earlier this year, with the month of November really becoming more of a deal month. Every year, it’s really interesting to see how it goes from Halloween to Christmas, and this year for me just felt even more so. I don’t even – I don’t think I heard anything about Thanksgiving in between, so, just more and more people shifting to focusing on purchasing for holidays with the expected shipping delays. And then, next up, Melissa, I’d like to turn it over to you to share some Cyber 5 results and insights.
Perfect, thanks. All right. So, kind of high-level summary here. Black Friday/Cyber Monday 2020 was a little bit less impressive than previous years. In particular, Cyber Monday advertising was a little bit less efficient this year, and brands experienced a smaller rate of return on their ad spend. And then, one thing that we really like to look at – and I’m sure everybody out there is looking at – is Prime Day versus Black Friday/Cyber Monday if you’re analyzing your Amazon business.
And so, we really – what we saw in the data and what we believe is that having Prime Day in October seems to have negatively impacted the Cyber 5 performance. There seemed to be some deal fatigue, people pulled forward some budget, we kind of – people are seeing some out-of-stocks on their key ASINs by the time they got to the Cyber 5 week, which makes sense and may have been – that was done on purpose, but we did see that. In terms of the deal fatigue, many brands ran promotions at the beginning of November and across retailers, so they had less of a need to run steeper discounts on Cyber 5, or maybe they didn’t participate at all.
And then, we did see stronger performance on Black Friday over Cyber Monday, and while this isn’t a high-level summary, we wanted to bring this to everybody’s attention because we believe that this kind of bug that we saw during Prime Day in the sponsored brand creative impacted spend allocation because there was poor performed in the sponsored brand ad unit because of this, and not sure if everyone knew about this, that we’re kind of seeing that in the data, so we’ll show you a screenshot of that in a second.
It’s kind of funny because it feels like it’s a new year, but the same deal. You can predict that 23andMe and Instant Pot and those headphones are gonna be on deal, which was the case this year, so it’s just kind of funny to keep seeing them. How much more penetration can there be with these kind of products? But, I will say that I bought an Instant Pot two years ago, and it is still sitting in my house. It has never been used. Maybe I’ll have more use out of my Food Ninja.
Melissa, I did buy one this year too, and it’s still sitting in my cupboard too.
All right, I’m not the only one. So, this is the bug that we were talking about. So, basically, in the creative, if you click – if you type in “batteries” or something like that, the little badge for a deal was not showing up during Prime Day, so it’s a little bit of a bug, and then, for Cyber 5, it was fixed, but we think the damage was done because people analyzed the performance and saw a sponsored brand wasn’t performing as well. So, when we looked at the data average daily spend for sponsored brand ads was down 12% Prime Day versus Cyber 5 while sponsored product ad spending was up nine percent, so we think probably people looked at their performance and it wasn’t performing as well, but it potentially was because of this bug.
And then, just a trend around this livestreaming. We saw this during Prime Day, this is kind of becoming a bigger thing, is there’s this actual widget on the detail page where there’s this livestream component, and if you think about it as people aren’t going to stores, really, having this video and livestream shopping component really helps people understand the products, and the key takeaway that I have around this is how are brands thinking about leveraging influencers in 2021 and making sure that they have their video content and some of this content that’s needed. Some people, it’s hard enough to just have the detail page content that you need, let alone start thinking about what is your influencer strategy and how you’re gonna get that on the site. So, that’s just the takeaway there.
And then, in terms of search behavior, finally, toilet paper and face mask was pushed down out of the top 10, and top searches are finally holiday oriented and people are decorating and things like that. So, these are the top clicked-on items last week during the holidays, and it’ll be interesting to see if toilet paper and face mask make their way back up after everyone’s shopped, so we’ll see. All right, now we’re gonna go into a little bit deeper dive on the numbers, and Mindy, take it away on that.
Yeah. So, as Melissa mentioned earlier, we did see some interesting behavior when comparing Prime Day to Cyber 5. So, while these two events are never truly an apples-to-apples comparison given a number of factors, including the mix in deal activity, the time of year they take place, and also the consumer intent for the event – are they shopping for personal reasons, are they gifting – but this year, it’s especially interesting to look at this comparison given the closer timeframe of both of the events, as well as Prime Day shopping intent is likely being more weighted toward gifting than it has been in past Prime Days.
So, this chart is looking at average daily performance for the two days of Prime Day compared to the average daily performance of Black Friday and Cyber Monday, and ultimately, some of the conclusions that we’re drawing is that if Amazon’s intent was to pull forward the shopping season, this is a clear indicator that they did see success in doing so.
While this makes sense given that Prime Day is an Amazon-exclusive event, so it would make sense that it has stronger performance, and for Cyber 5, consumers have more places to shop when looking for holiday gifts – like I mentioned earlier, D2C sites, mass retailers, specialty retailers, et cetera – I think what’s most surprising to me is just how much bigger Prime Day was than Cyber 5.
So, just quickly looking at this slide, looking at the average daily KPIs for Black Friday and Cyber Monday relative to Prime Day, as Melissa mentioned, it was a little bit lackluster. Impressions were down 40%, sales were down 30%, ROAS down nine percent, and CPCs were essentially flat. Again, this is based on weighted Pacvue consumer data, but I think the next – sorry, client data – the next slide, I think, is actually super interesting to tell the story, and this is one of our favorite slides.
So, one of our team members, Riku, puts the slide together for us. He started doing it when COVID hit, and it was just really cool to see some of the trends. So, this is a trended graph of consumer behavior. This is daily ad impressions, so this is just indicative – this is not sales – but what’s super interesting is instead of seeing that steady leadup to Cyber 5 that we saw in 2019, we saw a two-and-a-half-times impression spike for Prime Day 2020 over both Prime Day 2019 and Black Friday/Cyber Monday of 2020.
And then, the other interesting point is just looking at that – the daily volatility leading up to Cyber 5 in 2020 versus 2019, so, 2019 follows a very typical Amazon sales trend, and you see a lot of small peaks and valleys, and this is because this is a daily chart so it’s really showing you some of that day-of-week pattern – sales pattern – but what’s really interesting is that lead-up this year and just between the Prime Day spike and the lead-up, just all those peaks and valleys.
So, on that, Mindy, do you think that this is gonna have to be a throw-out year? When people look at next year and hopefully things are back to normal – let’s cross our fingers on it – but as we look at preparing budgets and thinking about spends, I just wonder if we have to disregard so much of this behavior this year.
Actually, I think it’s a bit of the opposite. Instead of disregarding it, it’s really – we’re gonna have to make some assumptions. People are gonna have to make some judgment calls on what they think next year will look like.
Obviously, with the vaccine coming out soon, there’s going to be some changes in consumer behavior next year, but without knowing what those could look like – I think this goes back to something I said on a previous webinar, which is you take all the information you have and you build the best plan that you can, but that’s why it’s really critical to have a Plan B and a Plan C, and then, also making sure that you’re empowering your executors to make real-time decisions because things are never going to shake out the way that any plan really expects them to, so I wouldn’t say throw it out, I would say draw insights, take learnings, and then place some bets and factor some of this information into those bets that you plan to place next year.
All right, so, let’s dive into some of the marketing KPIs. So, again, as a reminder, this data is an aggregated look based on Pacvue’s total client performance. So, both sponsored brand and sponsored product ad spending followed similar curves to the previous year, with spend rising the day before Thanksgiving and then remaining elevated over the Cyber 5 weekend.
Average daily spend on sponsored product advertising was up 37% year over year on Black Friday and 35% year over year on Cyber Monday. The year-over-year growth rates, however, pale in comparison to their respective 2019 growth rates, which saw 98% and 116% year-over-year growth respectively for Black Friday and Cyber Monday. This is likely due to the fact that brands shifted some of their holiday budget into October as well as early November to capture some of the heightened traffic. Given all the speculation around Prime Day and the Prime Day impact on the season, brands have been nervous to put as many eggs into the Cyber 5 basket this year.
So, many of the brands that we worked with continue to face inventory constraints, as Melissa mentioned earlier, and they’re really looking to sell as much as possible as early in the season to ensure that they hit their annual targets and they’re able to get shipments out the door. And also, we’ve seen some clients with fiscal years that are not aligned to the calendar year pull some of their Q1 2021 budget into Q4 of 2020 to maximize sales potential for the fiscal year with the heightened traffic.
And then, looking at ACOS and cost per click, interestingly, cost per click over the Cyber 5 didn’t follow the same trend as last year. Sponsored brand CPCs only rose 21% week over week and grew two percent year over year on Black Friday, so, essentially flat year over year. Cyber Monday CPCs were only up 13% year over year, and then, the Saturday and Sunday between Black Friday and Cyber Monday actually saw CPCs decline seven percent and 21% in 2020 year over year.
While less pronounced than sponsored brands, sponsored products also saw similar CPC growth this year, up 16% year over year on Black Friday and 20% on Cyber Monday, and both days had experienced year-over-year growth of 30% in 2019. All right. And then, advertisers typically see a lower ACOS on Black Friday and Cyber Monday compared to the prior week since conversion rates increase, but 2020 didn’t follow this trend this year.
So, sponsored product ACOS decreased only seven percent week over week on Black Friday and increased on Cyber Monday by 15% week over week. Similarly, sponsored brand ACOS decreased 17% on Black Friday, but increased over the weekend and remained elevated, up one percent week over week on Cyber Monday as Cyber Monday saw lower conversion. All right, I’m gonna turn it over to Melissa for some category insights.
Great. And, I do wanna respond to one of the audience questions. They asked a really good question, which is “Is this Amazon data or is this your client data?”, and while we wish we had the entire Amazon dataset to play with, only Amazon has that data, so this is based on Pacvue proprietary data, and so, we do have a significant amount of ad spend flowing through our tool, so these are pretty good trends to follow and look at.
All right. So, we’re gonna look at some category-level detail, starting with the toy and game category. So, this is a really interesting category for advertising because it’s usually dark for the most part of the year, and then Q4 is like the Super Bowl. So, they heavily spend – you can see their ad spend levels are pretty high, and then, you can kind of see ROAS takes a dive and CPCs go up, so it’s very – this is what you would expect in this category within toys.
And, on the next slide, the other interesting thing about this category is I really feel like this does not say it all for the year of COVID. So, there wasn’t a whole lot of change between 2020 and 2019 search behavior in terms of what are the top search terms – LEGO – there’s a little bit of mix, who’s No. 1, who’s not, so LOL kind of made its way down and LEGO made its way up, maybe less popular. But, the one thing is the jigsaw puzzle trend that we saw come out as a craze in March, where everybody was stuck at home and doing jigsaw puzzles.
And then, on top of that, this is the top-clicked item, which is this Cozy Retreat. I think everyone is maybe having a little bit of wishful thinking that they’re at a cozy retreat versus in lockdown, which is the case of where we are in Seattle because we’re in a further lockdown here, but I thought it was kind of funny that this is on the kids’ holiday list. It does say “adult puzzle” in the title, but anyway, that was kind of an interesting insight that we saw there.
And then, on the next slide – so, we just have a few slides talking about category trends. You can see here that toys had the highest spend when you look at the average daily spend. The way that we like to use this data is more like benchmark. So, if you’re thinking there thinking about “How is my category doing against – how is y brand doing against others in the category?”, that’s really how we leverage this data and look at being able to run your advertising program more effectively with certain targets and benchmarks, so that’s kind of the gist of this data, but we just wanted to point out a few interesting things that we saw.
And then, next slide, ROAS – so, something to point out here – the pet category had high spend and high CPCs, but unlike electronics, poor ROAS, so this seems to show that non-giftable items don’t perform as well during these periods, and this could also be exaggerated by a lot of people stopping up on CPG and pet items this year. In the absence of major price drops, people don’t need to move product, and there is less conversion – less of a conversion trigger when there isn’t a deal going on, unlike electronics category, where something is very giftable, highly promotional, lots of deals across the site, people need a reason to buy.
And then, looking at the CPC category trend – so, again, electronics is kind of an interesting one since ROAS still spiked on Black Friday and Cyber Monday, even with much higher spend and CPCs for these big-ticket items, which are usually giftable and have higher ASPs. The high ASPs can mitigate the high competition and CPCs.
So, we just wanted to give you a quick-hitting insight into some category benchmarks. We are sending out our report, so everyone on this webinar will receive the report that we send out so you can actually see the data versus squint at a screen, and just a little bit about what is up next. We have a – like I said, we’ll be sending our Cyber 5 CPC report out. You can feel free to download this, send this around to your teams.
And then, the other big thing we have coming up this month is on December 16th, we’re doing a First Movr event around the pet category, and our very own Matt McCrory, one of our account directors, is going to be speaking with one of our clients on the pet category, so if you are in that category, it’s a must-attend event, highly recommend that you do. And, with that, we are at our 30-minute allotted time. We thank everybody for your time today, and we hope you have a great weekend, and happy shopping.