By looking at overall Amazon trends, we are able to glean a clearer picture of what we can expect in 2019. We then use these predictions to develop a solid strategy for succeeding in 2019. E-commerce is expected to continue its upward climb, growing by 15.1% in 2019. While this is slightly lower than the 16% it grew in 2018, this steady incline is consistent and expected to be even higher in particular market segments. In particular, we can expect to see rapid growth in products of personal use and consumption. Food and beverage (17.9%); health, personal care, and beauty (17.2%); and furniture and home furnishings (17.1%) are among the fastest-growing categories.
Amazon shows no signs of slowing in its dominance of the e-commerce market. In fact, in 2019, Amazon will account for more than half (52.4%) of total online retail sales for the first time.
With this knowledge in mind, it’s important to consider the Amazon trends we are likely to see in the coming year. This way, sellers can make a plan that addresses them efficiently and effectively.
Predictions for 2019
- Prediction 1: Amazon Business will become a major focus
- Prediction 2: Amazon Private Label and Exclusive Brands will continue to grow
- Prediction 3: Added Convenience of Physical Locations
Prediction 1: Amazon Business will become a major focus.
Launched in April of 2015, Amazon Business has been a growing focus for Amazon’s overall brand. Marketed as a sort of Amazon Prime for business owners, this service aims to connect businesses of all sizes with Amazon’s powerful market. By offering business-only pricing, free shipping, and easy-to-use tax-exempt tools, Amazon has made itself an attractive option for businesses looking to manage their purchasing choices.
Amazon Business has certainly been a huge success. Amazon saw sales over this platform that surpassed $10 billion in 2018. This included large segments of Fortune 100 companies, education organizations, and hospital systems. This is clearly a well-established platform with plenty of room for growth.
Amazon will be launching new advertising products specific to Amazon Business as they aim to grow this particular segment of their market. As Millennials become major buyers for businesses across the world, Amazon will be tapping into the search and purchase habits of this generation for not only personal products but also for large-scale business purchases.
Prediction 2: Amazon Private Label and exclusive brands will continue to grow.
Amazon’s Private Label has been expanding into multiple markets. At this point, Amazon now offers private label options in clothing (including men’s, women’s, and children’s), personal care products, and furniture. As you may notice, these offerings align very well with the fastest-growing e-commerce market segments. It’s clear that Amazon is following (and perhaps driving) trends as they expand these offerings.
We expect these exclusive brand offers to continue to expand across Amazon’s platform. In particular, we will be seeing improved user interfaces and processes to speed up the method of getting new brands selling exclusively on the platform. We will see Amazon license particular products from manufacturers and an influx of new brands into the Amazon Exclusive Accelerator program.
Prediction 3: Added Convenience of Physical Locations
When Amazon announced its purchase of Whole Foods in 2017, speculation ran rampant about just what the partnership would mean for the future of shopping. As we go into 2019, this purchase and other moves that Amazon has subsequently made have produced a clearer picture of their plans. Convenience rules many purchasing decisions. Amazon is definitely perched to help bridge the gaps between the convenience of brick-and-mortar and online shopping.
We expect to see more physical location emphasis as solutions to costly problems and inconveniences of online shopping. For example, Amazon launched Amazon Locker, which can serve as convenient pick-up sites for customers who are unable to receive packages easily at their own homes. At the same time, they serve as an opportunity to return items without costly shipping fees. This saves money for both consumers and retailers. We can expect to see more innovations and experimentation around physical locations in 2019.
Strategies for 2019
- Strategy 1: Amazon Brand Stores
- Strategy 2: Increasing Advertising Budgets
- Strategy 3: Using Amazon DSP More Effectively
- Strategy 4: Supplemental Technology
- Strategy 5: More Granular Campaign Measurement
Strategy 1: Amazon Brand Stores
Amazon’s branded “storefronts” are an important component of an updated advertising strategy for 2019. We are working with clients to use their Amazon Brand Stores more strategically. Tweaks to these elements should be part of their paid search and display advertising campaigns to ensure maximum visibility and consumer interaction.
Strategy 2: Increasing Advertising Budgets
We expect to see more and more opportunities and methods for advertising on Amazon in 2019. Consequently, brands and manufacturers will need to increase their advertising budgets if they want to stay competitive as these new opportunities roll out. Even more importantly, brands that have not yet started advertising on Amazon will need to begin in order to keep themselves relevant and visible.
Strategy 3: Using Amazon DSP More Effectively
Amazon’s demand-side platform is already a critical part of a full-funnel Amazon advertising strategy. It will only become even more important in the face of increasing Amazon advertising opportunities. Any brand that is not currently using Amazon DSP should evaluate its potential fit for their business immediately to avoid falling behind.
Strategy 4: Supplemental Technology
Additional technology capabilities for managing Amazon businesses are becoming even more necessary for staying ahead of the curve by making data-driven decisions for maximizing growth potential. Brands need complete and easy visibility into their sales trends, catalog and advertising campaigns from an account level down to the item level. Supplemental technologies can complement an Amazon strategy to make sure it is as effective and efficient as possible.
Strategy 5: More Granular Campaign Measurement
Competition on Amazon and retail in general is going to increase in 2019 as brands jostle to break through and be highly visible during the entire purchase funnel. As mentioned earlier, this means advertising budgets are going to increase. It is important that every campaign have a specific goal and the proper measurements in place to ensure campaigns are performing in a way to meet their goals. Otherwise, businesses risk wasting advertising budgets without getting the results that drive overall success.
Campaign measurements that are specific enough for 2019’s market landscape will need to look at categories like brand vs. non-brand, category vs. competitor, prospecting vs. retargeting, and top sellers vs. new products. As a result, each should be measured separately with a specific marketing goal in mind. Grouping all campaigns under a single goal and measuring with a universal metric is simply not going to work in the future. Advertising is becoming more sophisticated as it follows users through their entire shopping journey. Advertising strategies will need to become smarter and more detailed to adapt.
In many ways, 2019 will be a continuation of existing Amazon trends and their commitment to be a customer-centric company. However, sellers will need to proactively engage with new opportunities and competition that is emerging. Brands and manufacturers that recognize the importance of utilizing cutting-edge technologies stacks and implementing sophisticated full-funnel advertising strategies will see great success in 2019.