Many online, consumption-based activities have seen spikes. Unsurprisingly, Amazon has been at the epicenter of this activity boost. Amazon’s increased activity across the board stems from the obvious: folks are less inclined to be in public spaces during the pandemic. Google Trend shows general searches for “Amazon” have seen a rise as of the past few weeks. The peak is not nearly as high as Prime Day or Holiday timeframe in 2019, but if surges like this rear their heads during unexpected times, they can wreak havoc on even the best-run, most efficient supply chains.
In the wake of this, Amazon has relayed news detailing how they’re going to halt shipping of non-essentials to their fulfillment centers until April 5th. This is an attempt to meet demand for more important items, via Amazon:
“We are temporarily prioritizing household staples, medical supplies, and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and deliver these products to customers.”
What Does This Mean for Amazon and its Sellers?
This news is so fresh, that Amazon’s advertising arm is still gathering details at this point. Our asks into Amazon reps were understandably met with a hold tight, gathering details response. The central theme: Amazon has had difficulty meeting surging demand for all items. Therefore, they’re going to focus on the essential items people need, ensuring fulfillment center availability for only the most important products.
The one piece of preliminary information we were able to gather from Amazon regards inventory on-hand. Any inventory in a fulfillment center (FC) – or already in-transit – will still be sent to customers. Brands may be impacted due to a lack of new orders from Amazon regarding inventory replenishment during this time, though. Meaning brands with large quantities of inventory on-hand might see little to no affect. Amazon has also noted this should have very little effect on consumer deliveries, seeing it’s more focused on new purchase orders for their warehouses. If the ban is extended beyond the initial April 5th mandate though, it could have farther reaching effects.
This also would only affect sellers and vendors on Amazon that are Fulfillment by Amazon (FBA) – meaning Amazon stores their products in Amazon’s fulfillment center where they pick, pack, ship, and provide customer service for those same products.
What Does This Mean for Advertising via Amazon?
For Advertisers with large amounts of inventory on-hand within Amazon’s fulfillment centers, this may not affect them as readily as the headlines purport. The preliminary feedback from Amazon has noted these products may still be eligible for shipping, Amazon simply won’t be putting any additional orders in for products to be stored within the FCs between now and April 5th, via Amazon:
“It doesn’t affect last-mile shipments of those products to consumers.”
With this being the case, brands using FBA need to thoroughly monitor their vendor and seller central accounts to ensure a firm understanding of what is in-stock and what is out-of-stock. The shipping dates currently noted for most products on Amazon back this up. They’re delayed (as they have been for the past week or so) but they don’t speak to an all-out stoppage until early April.
For smaller advertisers or simply products with limited inventory on-hand within Amazon’s FCs, advertising dollars within Amazon – especially search – need to be closely monitored to ensure they can be purchased on Amazon without massive delay. Reducing clicks that may result in a consumer bounce due to the eventual delayed shipping reveal should be a priority.
Constant monitoring of media endeavors is the new norm as consumers and advertisers alike continue to respond and adjust to everything COVID-19-related. Empower will continue to provide updates on this topic as further details are revealed.