The Case for Share of Voice
Prime Day 2022: Highlights
We are already well into the second half of 2022, and brands and retailers have started preparing for the holiday season even if products are not yet in the public eye. Prime Day may be over, but Amazon’s strategy and performance around the key period can provide some guidance for what we can expect for Cyber5 and Black Friday.
So what happened during Prime Day 2022? There were certainly some surprises uncovered. All data presented here is taken from CommerceIQ customers that are 1P vendors on Amazon.
Supply Chains Uncertain
While revenue lost due to out of stocks did not approach 2020’s levels, the lift in out of stocks was still more elevated for Prime Day 2022 vs. an average day than it was for Prime Day 2021. 2022 saw a 1.8x lift compared to a 1.6x lift in 2021. Unit out of stocks however, were decidedly lower in absolute terms in 2022. Effects from Ukraine, Shanghai lockdowns, and category specific disruptions still threaten to elevate inventory out of stocks for bigger-ticket, more expensive items.
Figure 1: Vendors Saw a Slight Bump in Revenue Lost Due to OOS in Prime Day 2022
Gross unit margins saw a steep drop off in the days leading up to Prime Day 2022. Vendors may have struggled with maintaining profits as margins dropped almost 3 percentage points in two weeks. Rising costs are showing no signs of slowing down and Prime Day was no exception. Vendors need to use every lever they have to hold on to their profit and revenue, especially for high sales periods like these.
Figure 2: Vendor Margins Decline Steeply Ahead of Prime Day
Discounts Are Back
Prime Day 2020 and 2021 saw no discernible rise in discount levels for items on sale. On average, vendors had opted not to use steeper promotions for the retail holiday in favor of increased ad spend. In 2022, this trend reversed. Discount levels were up 39% for Prime Day itself vs. an average day beforehand. Discounts were especially intense on the 2nd day of Prime Day, rewarding those shoppers who held out for better deals. At the same time, brands also splurged in discounts 6 days before Prime Day. It’s also worth noting that despite the rise in discounts vs. levels prior to Prime Day 2022, discount levels have been declining in general for over a year. Prime Day discount levels for day 2 were actually similar in absolute levels to last year’s Prime Day.
Figure 3: Discount Lift Higher Than Past Years Even as Discount Levels Decline Generally
Amazon’s and brands’ focus on discounts worked. Ordered Product Sales (OPS) saw a 2.8x lift for Prime Day 2022 vs. an average day 2 weeks prior to the event. These levels reversed a decline that had occurred last year when OPS lift fell from 3.0x to 2.5x between 2020 and 2021. Prime Day has reclaimed its cachet for many shoppers.
Figure 4: OPS Lift Grows From Prior Year
The lift in shopper interest for Prime Day 2022 was significantly higher than either of the past two years. Glance views performed 3.3x better than an average day compared to only a 2.6x lift in both 2020 and 2021.Since glance views were exceptionally high in 2022, sales conversions were lower as a result. Nevertheless, shoppers were on the hunt for good deals and ways to spend their money this year.
Figure 5: Glance Views Exceptionally High for Prime Day 2022
Balancing Retail Media
Vendors may have shifted some of their ad spend budget toward discounts this year as the average ad spend lift was only 3.4x on Prime Day 2022 compared to 4.0x in 2021. Ad spend still performed spectacularly well with ROAS rising 8% for normal levels for the holiday, even at those elevated ad spend levels. With heightened competition over retail media, cost-per-clicks also rose 11% for the holiday vs. two weeks prior to the start of Prime Day. This CPC lift is the smallest Prime Day lift for CPCs within the past three years.
Figure 6: Ad Spend Lift High, but not as High as 2021
Figure 7: ROAS Sees Small Boost Despite High Ad Spend
Figure 8: CPCs Rose 11% for Prime Day 2022
There are still more CommerceIQ insights on Prime Day 2022 upcoming, including category level data. Join us for our upcoming webinar on July 28, 2 pm EST, where we’ll delve into more detail on Prime Day and how it should affect your approach to holiday 2022.
Register here: https://hubs.li/Q01gGy1d0