2022 Amazon and E-Marketplace Trends and Predictions

This blog was inspired by Feedvisor President and COO Dani Nadel’s recent Tech Talk with eMarketer. To watch the recording of the webinar, click here. Continue reading to get a summary of the webinar.

Even with in-person limitations and inventory issues happening with retail in parts of the U.S. throughout this year, eMarketer forecasts e-commerce sales to grow by 13.7% in 2021, reaching more than $908 billion. This shows that inventory challenges have not slowed down buyers, and it is clear that Amazon and e-marketplaces as a whole remain an opportunity for growth among brands and retailers.

However, with growing competition and changing demographics impacting the types of technology, channels, and ads that resonate with shoppers, businesses need to stay at the forefront of emerging trends and predictions to connect with consumers on Amazon and the greater e-marketplace ecosystem. 

Trend 1: Product Search is Happening on Amazon, Not Google

Search isn’t just happening on Google. More shoppers are turning to Amazon first to find product information. Amazon is where two-thirds of shoppers start product search and where three-quarters go when they want to make a purchase. 

On average, brands allocate 28% of their overall digital media budgets to Amazon, 22% to Google, and 23% to paid social. This is a notable shift from brands’ media spend allocations last year. 

E-commerce sales at many of Amazon’s competitors are growing quickly, but Amazon’s sales are still growing faster than the overall market.

• Amazon: $367.19 billion in total e-commerce sales
• Walmart: $64.62 billion in total e-commerce sales 
• Target: $20.23 billion in total e-commerce sales 

Why do shoppers prefer Amazon? 

Consumers are looking at prices and product reviews above everything else. Amazon has an easy user interface, competitive pricing options, a more sophisticated and superior search and query, recommendations based on past purchases, one-click ordering, automatic re-ordering, and a variety of reviews on products to validate purchases and quality. All of these features make Amazon a top competitor in the e-marketplace space.

• 75% of consumers say they check prices and product reviews on Amazon before purchasing.
• 92% of consumers say they are more likely to buy products from Amazon than other e-commerce sites.
• 56% of consumers say they visit Amazon daily or at least a few times a week.

Feedvisor’s 2021 Consumer Behavior survey found that online shopping will remain dominant, with 57% of consumers claiming they do more online shopping now than they did before the pandemic. We also found 78% of U.S. brands are currently selling on Amazon’s marketplace, up from 55% last year.

Key Insight

Cyber Five has concluded, but holiday shopping is not yet over. This is why it will be important to continue strategizing past December and into January and February as storage fees increase, inventory gets tighter, and returned products start coming back. 

Here are a few tips you can use all year round, but especially in December:

• On-hand inventory is arguably the most important — and costly investment for your business. Strike the optimal balance between not enough inventory coverage and being overstocked 
• Be particularly sensitive to maintaining a positive Inventory Performance Index (IPI) score
• Be very clear on shipping promises to avoid an influx of negative reviews if last-minute gifts did not arrive on time
• Make sure your advertising, promotion, and pricing strategies are in alignment with inventory for optimal results

Trend 3: Holiday Shopping Does Not End After the Cyber 5

Although consumers were encouraged to shop early to avoid any supply chain issues, many shoppers still believe that they can find the best deals in November and December. This will lead to more last-minute shopping, not just on Black Friday and Cyber Monday but throughout December. 

Where is last-minute shopping happening?

The answer? Amazon. The Feedvisor Consumer Behavior Report revealed that customers tend to turn to Amazon for their last-minute shopping. Amazon is the leading destination for late Q4 shopping, with more than half of consumers purchasing last-minute holiday gifts from Amazon. 

Not only that, but shoppers allocate significant portions of their holiday spending to Amazon, with 28% of consumers saying they spend 21%-40% of their holiday budgets on Amazon. In comparison, 27% of consumers spend 41%-60% of their budgets on the platform. 

Key Insight 

Even after Black Friday and Cyber Monday, you still need to stay on top of your Amazon strategy to win last-minute shoppers. Expect your inventory, advertising, and brand strategy timeline for the holidays to stretch past Cyber Monday to the entire month of December.

Your entire operation is dependent on your ability to fulfill customer orders. On-hand inventory is arguably the most important — and costly investment for your business. While low stock levels can directly lead to a decrease in sales and negatively impact your organic search rankings, excess inventory can result in hidden expenses such as long-term storage fees, loan interest, and alternative costs of not investing in new products.

This process can be simplified with the proper tools and expertise. Leveraging technology and data will help you access inventory performance insights for inventory levels, demand fluctuations, and account health. With continued supply chain issues, it’s important to be particularly sensitive to prepping for your inventory position at the beginning of the year to plan for major holidays like Prime Day 2022. This is also the time to look into maintaining a positive Inventory Performance Index (IPI) score.