How Brands Should Get Pricing Ready for Holiday Value Hunters
Want to know how people will shop this holiday season, and how they’re shopping already?
For a reliable crystal ball, look no further than how Americans shopped Amazon's most recent Prime Big Deal Days (PBDD). Across the board, households spent more, and their carts were filled not with the latest tech but with everyday basics.
What the Results Revealed
Numerator found that average household spend on Amazon rose 9% year-over-year to $114.01, with more of those dollars going to inexpensive items. Purchases under $20 made up 68% of the total. Adobe reported household cleaning and paper sales up 55% across U.S. online retailers, while pet food and personal hygiene each rose 45%.
Inflation was the top motivator for shopping the event: 74% of shoppers cited it as the No. 1 reason for joining the event, up 4 points from July, according to Numerator. Adobe summed up its analysis this way: Shoppers prioritized getting the best value for their dollar.
Our own early read was strong. Across the brands managed at AMP, sales ordered on Amazon grew 33% year- over-year. Advertising returned about $4.80 in ad-driven sales for every $1 spent, up from $3.86 last year.
What It Means
We believe consumers are checking prices everywhere they shop. Per Numerator, more than half of PBDD shoppers compared prices at other retailers before they bought. When value comes first, loyalty to any one retailer carries less weight. Cost-of-living pressure is still real, and the midterm elections have added noise to the news cycle. We expect many holiday shoppers to wait and see what their favorite products cost, then buy those in volume when the price is right.
Two insights follow from this. Discounts and promotions will matter even more this year. And shoppers waiting for the best price are still reachable, because what they bought and searched for already shows what they want.
What to Do Now
- Keep pricing and promotions consistent. Brands that can control their pricing across channels have an advantage here. A price gap, or a deal that disappears on one channel, sends shoppers somewhere else. If you cannot control shelf price, align the promotions and pack offers you can control.
- Build two audiences before the deal. The first is shoppers who showed interest but never bought. Amazon Marketing Cloud (AMC) lets brands find them: They viewed your product page, added it to their cart, clicked an ad or searched for your brand. These are your shoppers waiting for a deal. The second audience is past buyers. Some are due to reorder their basics, and some love one product but haven’t tried the rest of your line. Have both audiences ready before the deal goes live.
- Ramp up to the deal. A lead-in plan warms shoppers up on the product and the price, and then the event converts them. A lead-out catches the late deciders. Offer bundles and multipacks for stock-up shoppers.
Mind the tradeoff. Deeper promotions cost margin, and matching prices everywhere limits how flexibly a brand can promote. Pick a few hero items to carry the deal and protect margin on the rest.
The holiday season starts earlier every year, and shoppers have shown us how they plan to buy. Will your prices and your audience be ready before they arrive?
About the Author
Erik Ricard is VP of e-commerce at AMP Agency, a division of Advantage Solutions. He has been in the e-commerce space for more than 15 years, including eight years at Amazon across advertising, marketplace and devices. Since then, he has built retail media and Amazon advertising practices at WPP, Stackline, Teikametrics, and Omnicom.
