Webinar: 6 Amazon Marketplace Predictions for 2023
February 8, 2023
If you’re an Amazon seller, you know if you’re not ahead on the trends, you’re behind. In 2023, this will prove especially true as Amazon updates some of its features and the world continues to rebound from a turbulent and often unpredictable few years.
In this webinar, Liran Hirschkorn and Mansour Norouzi from Incrementum Digital joined Avishai Sam Bitton, VP of Growth at 8fig, to discuss their 6 Amazon Marketplace predictions for 2023.
AI Will Drive More of the Creative Process in 2023
Between content generation and image production, eCommerce sellers will be leaning more on AI (artificial intelligence) this year. In fact, Liran noted that over ⅓ of marketers are already comfortable using AI to generate and optimize creative copy and images.
Any sellers who are interested in increasing their operational efficiency in the new year should investigate how AI could make their jobs simpler. One such example is product images. Liran pointed out that with new AI technology, it is no longer necessary for sellers to take their own product photos or hire a photographer every time they launch something new. Instead, they can add their product into a generator and receive high quality photos in seconds. He highlighted the following images that were generated to showcase a ring as an example of things to come, adding that AI will be able to predict which audience might like each picture the most.
Ad Cannibalization Will Become a Thing of the Past
Ad cannibalization happens when two or more of your ads compete for the same customers so you effectively compete with yourself, wasting valuable marketing resources. AI is going to help companies prevent this from happening by providing a better understanding of how and where potential customers interact with ads.
Currently, sellers only see when a customer makes their purchase, not how they got there. Services like Amazon Marketing Cloud, a cloud-based measurement and analytics tool, will help sellers see what digital journey the customer went on before they bought something. This gives a more robust understanding of all the platforms and touchpoints that make a customer aware of the product and eventually purchase it. Having these data sets provides a major boost to companies refining and optimizing their marketing campaigns for an improved ROAS (return on ad spend). It will be far more straightforward to determine whether an ad made an impact or not, meaning companies can launch their campaigns with more confidence.
Amazon Will Share Proprietary CLTV Data
In this section, Liran talked about how Amazon has withheld Customer Lifetime Value (CLTV) data from its online store. A few years ago it was unthinkable to him that Amazon would share search volume data, and then it happened. Under its new leadership, it is sharing a lot more data, which is invaluable for online sellers. Understanding these metrics properly can provide brands with great insight into how their marketing campaigns are performing. This means knowing the best times to invest in ad budgets or not.
According to Liran, Amazon has a vested interest in sharing this data as it encourages companies to spend more on advertising on its platform since they now have a deeper insight into their performance than ever before. Avishai added that having these metrics can also help eCommerce sellers better predict their sales and manage inventory accordingly to avoid stockouts.
Buy With Prime Will Become Its Own Holiday
Liran opened this discussion by focusing on Buy with Prime, which lets D2C (Direct to Customer) brands put Amazon checkout boxes on their website. Knowing that the buying, shipping, and returns process is managed by Amazon, as well as getting 1-2 day shipping can be a huge incentive for many customers to complete purchases. The Buy with Prime holiday will give this feature a major boost.
Liran believes that in the future, Buy with Prime won’t just be a box on seller websites, but a button on Tiktok and other social media pages, from where people can buy the products they are looking at directly. Properly rolling out Buy with Prime is a major priority for Amazon this year so sellers should keep an eye on its development.
Audience question: Is Buy with Prime a better option than sending [customers] to Amazon with an attribution link and potentially getting the 10% [referral bonus]?
Liran thought Buy with Prime is still the better choice since sending customers to Amazon from your store exposes them to a wide variety of other products that might catch their attention instead. Buy with Prime allows you to import Amazon reviews, further building trust with your website and brand. You also get the added bonus of collecting their data, such as emails, so keeping customers on your own website is more advisable according to Liran.
Brands Leveraging UGC Will Win the Market
Avishai has noticed that big brands are moving towards UGC (user-generated content) ads. For him, it is very clear that customers trust people over brands. Many consumers are fatigued by brands that create very polished and shiny ads. Avishai found that even small influencers with around 1,000 followers that don’t necessarily generate high quality content, but actually engage with the product, seem to get higher conversions than more established alternatives.
Liran highlighted the launch of Amazon Inspire, which seeks to incorporate the influencer world with Amazon’s products. Mansour agreed on its importance, adding what a wide impact influencers can have on product searches and purchases. However, he stressed that when you use influencer marketing you need to ensure that all the traffic generated goes toward your website and products, and not elsewhere. Avishai emphasized that creators need to be briefed thoroughly in order to give an engaging and authentic preview of products and brands.
Supply Chains Will Make or Break Brands
Avishai observed that supply chains are becoming more important and sophisticated than ever. Amazon is optimizing its storage and has introduced seller auctions for inventory space. That means companies need to outbid each other for storage space, but if they win the bid and sell their stock within 30 days, they get credits from Amazon. This adds a whole new layer to supply chain management; eCommerce sellers that don’t adapt risk falling behind. While this seems worrying for small businesses, Avishai pointed out that big brands with more money might not change their behavior much, meaning small companies that play their cards right can gain some noticeable advantages.
Bonus: The Science of Inventory Management
To Avishai, stockouts are a death sentence on Amazon. Sellers should always keep their inventories full to hold onto their raking. Stockouts can eliminate months of growth by dramatically decreasing how highly a product is placed on Amazon’s search. Avishai recommended spreading out your stock, so you’re not dependent on one container and perhaps ordering some air shipments.
Audience Question: How does Amazon upstream storage fit into this?
Liran explained that it’s a separate warehouse where sellers store inventory, from which it is shipped to Amazon warehouses. It acts like a third-party logistics provider and replenishes inventory to FBA (Fulfillment by Amazon) for eCommerce stores.
Audience Question: What advice do you have for a seller to prepare for swings in the market?
To this Liran said that sellers need to try to predict market trends. You should be constantly wondering about what is going to happen in your sector. He recommended looking at trends that happened in the past and at all the data Amazon is sharing. Pay particular attention to search volume, how many new competitors emerged in a particular market, past sales history, and whether conversion share and search volume are going up or down in a certain market.
Audience Question: What are some of the top tools you recommend for sellers?
To Mansour, keeping a close eye on your Amazon store’s profits and losses is central for any eCommerce seller, so he recommends tools that can facilitate this process. He suggests Sellerboat, which offers a deeper understanding of what is happening to a store’s sales. Mansour also likes Perpetua for advertising and marketing services. Helium10 and JungleScout are great for market research and keyword tracking as well.
The world of eCommerce is changing day by day. Amazon is constantly implementing new changes that completely overhaul how things are done on its marketplace. Liran believes that online sellers who don’t want to get left behind need to stay on top of what is happening in this sector every week. He recommends following Incrementum Digital and 8fig through their social media channels to keep hearing the latest trends in eCommerce and stay ahead of the competition.
You can follow Incrementum Digital on Facebook and LinkedIn and 8fig on Facebook, LinkedIn, Instagram or TikTok.
Julian writes about the ins and outs of eCommerce at 8fig. He is passionate about exploring and covering the dynamic and fast-paced world of online retail.