Aleksandra Tadrzak
It is known for its competitive pricing, speed-of-light shipping, and true-blue customer service. Today, more product searches are conducted on Amazon than on Google.
Last year Amazon’s activity has made clear what the platform intends to. The e-commerce giant continues to take market share from Google and Facebook. Throughout the last year Amazon has introduced several new, powerful features. Many of them made sellers ready for anything that might happen.
Every roll-out directly impacts retailers’ bottom line. So what's in store this year?
Take a look at our summary and Amazon’s updates of the greatest significance. Find out how one of each may impact your eCommerce business in 2020.
Here is a quick recap of notable 2019 Amazon Updates:
Amazon FBA fees
Amazon is striving to leverage their services but allows to make some savings too
Manage Your Experiment Feature
Creating a more attractive product view with enriched multimedia
New Advertising Products
Feature-rich and easy-to-use advertising on Amazon
Request a Review Button
Keeping buyer-seller communication in-house
Final Thoughts
Amazon’s FBA fees change
Amazon is constantly looking for ways to make their operations more efficient. The part of this strategy is to review their pricing structure every year.
2019 kicked off with Amazon announcing that they will update their FBA fees. This fee change was a piece of good news for sellers. Not only because it allowed making some savings, but also because it proved that Amazon is striving to leverage their services.
It all depends on:
- the weight,
- size,
- and type of product.
On the positive side, Amazon has lowered long term storage fees and referral fees for certain categories. What is more, long term storage fees no longer start at 181 days, but at 365 days. Sellers have an additional 6 months before they are penalized for keeping inventory in Amazon’s warehouses.
The downside for the sellers is that fulfillment fees might have increased depending on the size or weight of products. The advice is to identify the inventory that is affected by the changes.
You need to check if and how it impacts your business' profitability. If it does, sellers who are facing an increase could try to reduce packaging size or weight when possible. They can also consider what more than a 30% reduction in referral fees may bring.
Now that low priced items have better sales margins - expanding business on Amazon might be possible with cheaper items that were unprofitable up to 2019.
“Manage Your Experiment” feature
This recently announced tool allows sellers to test their A+ content. In effect - make data-driven decisions.
A+ is a content feature, which allows sellers to change the product description of their branded ASINs (what is ASIN?). The idea is using rich texts and images to enhance the user experience. With enriched multimedia, you can create a more attractive product view.
Source: Amazon Branding Service
According to Amazon, “Experiments can help you statistically find the best A+ content for your listings, improve future content, and help drive more sales.” There is no need to spend months testing different product marketing strategies anymore. Through the use of A/B tests, you can compare the two versions of content simultaneously.
The tool shows the results in a simple dashboard. It helps to understand which version of A+ content resonates more with Amazon’s customers.
Selecting the right images and UVP increases conversions on your product’s page. Adding relevant product details helps customers understand exactly what a product is for. It addresses customers’ concerns ahead of time, thereby reducing returns. Savvy sellers who take advantage of this tool will benefit in Amazon’s highly competitive marketplace.
To be eligible for Manage Your Experiments, you must have the Brand Representative role in Brand Registry. At least one eligible ASIN with already published A+ content is a must. It needs to belong to your Brand, and needs to have high traffic. If those requirements are fulfilled Amazon can provide more statistically sound results for A/B tests. Then you can set up a second version of A+ content. Use the same ASIN and get your content approved before submitting your experiment.
New Advertising Options on Amazon
This year advertising on Amazon has become more feature-rich and easy-to-use than before. In 2019, they have added new features for Sponsored Products. This gives sellers more tools for running sophisticated paid marketing campaigns. Sellers can use these features to develop strategies to outsmart competitors and maximize their marketing ROI.
The new bidding and targeting features give retailers more possibilities to optimize campaigns. It is a way to have more control over where ads appear, how to target, and how to bid.
Dynamic Bidding
Amazon has always used dynamic bidding. Up to now, the only possible option was to bid “down only.” This year they allowed to leave bids at the “down only” default.
With dynamic bidding, Amazon adjusts your bid according to the probability of a sale.
Sellers can now apply the following bidding strategies/options :
- down only
- up/down
- or fixed strategy.
source: sellics.com
Fixed bids mean that dynamic bidding is deactivated and bids remain the same. Amazon always uses the default bid. Amazon will raise or reduce your bids depending on how the click is likely to convert.
- Raising up to 100 % is for placements at the top of search results.
- For all the other placements Amazon will raise your bids up to 50 %.
- Only search queries that are very unlikely to convert will lower a bid to 0.
It is generally recommended to keep the bidding strategy at down only. Up/down may give higher conversion rates, but may also have an increased cost per click and ACoS.
Targeting groups for automatic campaigns
Automatic campaigns allow Amazon to place ads across search and product pages. It is happening without sellers specifying the targeting. While it’s a great way to let Amazon do keyword research, it may also turn into an inefficient campaign with little control about where the ad shows up.
Automatic campaigns now have targeting groups. It means different bids for:
- Close Match,
- Loose Match,
- Substitutes,
- and Complements.
Sellers can optimize based on how these segments perform. It is worth to consider re-launching old automatic campaigns with new targeting groups.
Product Targeting
This feature was previously only available to vendors in the Product Display Ads. But now, also sellers can take advantage and expand their presence.
It is an opportunity to go beyond just bidding on keywords. Sellers can target their audience by category, ASIN, reviews, price, and brand. If used correctly, it might be a powerful way to get ads in front of the right audience. With product targeting, it’s easier to reach shoppers as they browse detail pages and filter search results for specific products similar to yours.
After a set up, Ads show up in search results and in the Sponsored Products ads carousel on the product page.
Product targeting allows you to choose specific product features that are similar to the product in your ad. It is best to use this strategy and reach purchasers while they are browsing detail pages and categories, or when searching products on Amazon.
Ads optimization
Sponsored Brand Ads are supposed to get some more features that are still in BETA. Now we can check less significant but still interesting revamp.
This update is the option for Amazon to choose an ad image. The choice is based on what is on your landing page and what is most likely to convert. Theoretically, letting Amazon leverage its data to optimize your advertising might help. However, sometimes it seems to work in Amazon’s favor, not the seller.
It's always better to run some A/B testing. We recommend checking this feature against a campaign where you pick the items by yourself.
Remember to follow a few best practices when testing:
- Set up multiple campaigns to run simultaneously
- Change one variable at a time
- Run the test for at least 2 weeks
- Identify winning criteria based on your business goal and the test set-up
Source: Amazon Advertising
Request a Review Button
Amazon is moving away from contacting customers via the buyer-seller messaging system. Recently they have also removed sections such as last name and shipping address.
The “Request a Review” button is also about keeping buyer-seller communication in-house.
With no doubt requesting reviews from your buyers is worth the effort. Especially if you need to see how quickly you’re able to generate reviews. It is worth remembering that products without reviews on Amazon do not attract shoppers. For brands, reviews are one of the few ways to build equity. It is quite possible that with the ask coming from Amazon, customers are going to be more eager to respond.
However, there is a threat. As more sellers become aware and overuse this button, it may lose effectiveness.
Final Thoughts
As 2019 whirlwind year came to an end, we can say that many significant changes were introduced. Even if hurdles appeared, many vendors and sellers need to be present and visible on Amazon.
No matter what, it is critical to position their products for success and get all the bases covered. Understanding how recent changes affect your business in 2020 is a must. Especially if you want to adapt and maintain your sales.
