Last year’s holiday shopping season started earlier than ever, due to concerns about supply chain issues. This year, Amazon not only continued the trend but doubled down with a surprise major shopping event occurring in mid-October - the Prime Early Access Sale (PEAS). Brands and consumers alike were surprised by the announcement of the big sale; Walmart and Target quickly followed suit with their own early holiday deals. However, with little time to prepare, many brands were not ready to adjust budgets to fully participate.
An early holiday shopping event from major marketplaces isn’t a complete shock, as consumers are already starting to think about the upcoming season. According to the Jungle Scout Q3 2022 Consumer Trends Report, consumers are shopping even earlier than last year, with just 13% planning to wait until Thanksgiving or later, compared to 27% in 2021.
With short notice about the first-time event and a lack of participation, brands were unsure of what to expect from the results. While final results are still trickling in as attribution windows are still not closed, Code3 Strategists have compiled some early data from all Code3-managed search campaigns during PEAS.
Amazon stated tens of millions of Prime members shopped but stopped short of providing any sales numbers. Code3 Strategists found PEAS to be a less competitive shopping event compared to July’s Prime Day, with advertisers overall spending less. Budgets were lower and cost per click (CPC) were 40% lower than July’s Prime Day.
Additionally, success was found in different categories than usual. Typically during tentpole shopping events, a top 3 performing and competitive category is electronics. During PEAS, electronics was a top 3 most competitive category, however, it didn’t deliver on conversion rates like during July’s Prime Day. The top 3 converting categories during PEAS were Office Products, Toys & Games, and Grocery.
“Generally speaking, with inflation prevalent right now, consumers may not necessarily have the disposable income to spend on the typical electronics or household gadgets right now,” said Kirk Lutz, Lead Advertising Strategist. “What we saw during Prime Early Access Sale was the grocery category being one of our Top 3 converting categories. This points to customers possibly repositioning their dollars in their monthly budget to necessities.”
However, despite the inflation implications, Code3 Search Strategists found that if a promotion amount was competitive enough, shoppers were converting. Products discounted over 35% were purchased nearly 1.5x higher than items discounted 20%-35%.
Additionally, Code3 Search Strategists noted that the event's timing may have led to more price comparison and shopping around than usual. With the traditional shopping season just around the corner, shoppers may have been hesitant to add to cart just yet, hoping instead for a better deal on Black Friday and the subsequent days. Price comparison and shoppers who are just browsing lend to conversion rates being down for many brands. Code3 clients saw a 12.8% conversion rate compared to 15.3% during July’s Prime Day.
A bright spot, especially considering the timing of PEAS leading up to the holiday shopping season, is that 81% of sales measured from sponsored brand campaigns were new-to-brand, roughly a 20% increase from the lead-in timeframe. There’s no better time to introduce shoppers to your brand than just prior to the holiday season. “An increase in new-to-brand sales has a positive impact on a brand’s overall awareness,” said Lutz. “Increased brand awareness means increased traffic, which can make a big impact moving into the holiday season.”
What Does This Mean for My Brand?
If your brand participated in PEAS and saw solid results, you’re in a great position ahead of the more official holiday season; more shoppers are now aware of your brand and a potential flywheel has begun. However, regardless of participation in PEAS and their results, now is the time for all brands to start getting their catalog in conversion-ready shape for the traditional holiday shopping timeframe.
If you haven’t already, begin to plan holiday promotions, budget shifts, and clean up your catalog now. Identify priority ASINs, and ensure that both the consumer-facing and backend experiences are clean with no attributes left unfilled, quality copy, keywords, and imagery in place, and no third-party presence on your listings.
Follow the Code3 Resource Center for much more to come on preparing for a successful holiday season. If you could use a strategic partner to help you manage the upcoming shopping season, and maintain success into the new year, contact us today.