Prime Day 2020 - Prep Guide

Uncertainty surrounding Prime Day 2020 will result in many brands choosing to ignore the massive retail event entirely. 

In this article, we’ll be discussing:

• The pros and cons of participating in this year’s Prime Day
• Tips on how to get the most of the event if you decide to participate

We hope you enjoy it!

The mystery surrounding Prime Day 2020 is not ideal

Amazon retains a significant competitive advantage over other retailers by keeping this year’s Prime Day date under wraps for as long as possible. But this is problematic for brands considering the backdrop of a global pandemic that has caused:

• Significant supply chain disruption
• Mass unemployment
• Economic uncertainty
• Huge changes in shopper behaviour

It’s widely accepted that Prime Day 2020 will probably happen in Q4, most likely in early October. For some brands the event will be used as a springboard for Holiday sales. Other brands will either choose or be forced to take a divergent path, and adopt a very different strategy compared to PD 2019.

Brands are taking different approaches

Some brands won’t participate this year simply because it’s too close to Q4. The event requires a lot of operational and marketing strategy heavy lifting, and if you don’t feel confident enough to execute, focusing on Q4 as a block may be the better move.

On the other hand, if your brand typically sees slow sales during Q4, this much later than usual Prime Day may be a great opportunity for a one-off revenue spike. Brands in this position could quickly capitalize on the increased traffic on the Amazon marketplace, and then hunker down for the remainder of the quarter.

💡 Check out Episode 151 of the Ecommerce Braintrust - Amazon’s Late 2020 Prime Day Will Be A Dress Rehearsal For Black Friday

Bobsled CEO Kiri Masters recently published an article on Forbes about Prime Day 2020. In the piece Todd Hassenfelt, Senior Director of Ecommerce at Simple Mills shared some reasons why a brand may want to invest in Prime Day 2020:

• If your products were deemed non-essential earlier this year, and you experienced a pronounced sales slump as a result, Prime Day could be an effective way to clear out excess inventory.
• If your brick & mortar business is waning, Prime Day could help make up lost ground on the ecommerce side of your business.
• Your products are giftable - an October Prime Day means the Holidays will be right around the corner.
• If your brand is new to Amazon and/or you’re looking to disrupt legacy brands in your space
• You feel bullish about strong economic recovery from Covid i.e. shoppers will be in a better place to spend big for the Holidays

“This year, because Prime Day will most likely fall sometime in October, many brands are thinking about running their Holiday shopping promotions that would typically commence in November or early December, immediately after Prime Day. You could lean on the brand visibility boost sparked by the retail holiday with Lightning Deals and other promos.”

💬 Olivera Bojovic, Bobsled Sales Specialist

Inventory Challenges

Amazon recently introduced Inventory Performance Index (IPI) restrictions for Q4, based largely on inventory turns, meaning brands can only have 3 months of FBA inventory coverage on hand. Learn more - Amazon Q4 Inventory Planning.

In addition, Amazon’s receiving times have ballooned to 20 or 30 days, compared to the pre-Covid average of 5 days. Brands may be reluctant to participate in Prime Day if they haven't had enough time to bolster their inventory levels.

“Amazon's response regarding inbound and outbound delayed FBA windows is very discouraging. I’m strongly encouraging my clients to consider feasible alternatives to FBA, as well as preparing FBM capability as a back-up option.”

💬 Jesse Chembars, Bobsled Project Manager 

Without question, many brands are inevitably going to run into inventory challenges during Q4. Tough calls need to be made around committing to optimizing inventory for Prime Day and accepting potential stock-out disruptions in the immediate aftermath, or sidestepping Prime Day promos completely and banking on big volumes during the rest of Q4.

“I'm telling clients that have high turns and low storage costs to essentially plan to max out all SKU-level inventory maximums, and then plan to have another restock queued up and ready to send out immediately the last week of the month in October. The hope being that this gives them the best chance at having max inventory available for Prime Day, followed by a quick replenishment that receives in time for Turkey 5.

Considering the anticipated delays we’ll be really threading the needle with this strategy, so I'm also pushing really hard for FBM as a back-up too.”

💬 Jordan Ripley, Bobsled Project Manager

How to make the most of this year’s Prime Day

This year many brands will definitely be pulling back, creating a vacuum for other brands to step into. If you will be making Prime Day 2020 a priority, here are some things to consider:

• You can no longer submit for Amazon’s official Prime Day promos, but you can still set up your own DIY promotions.
• Lean heavily on your own channels. According to many Bobsled clients, social media was the biggest driver for Prime Day sales last year.
• The retargeting capability of Sponsored Display ads are incredibly useful. Learn more - Amazon Sponsored Display vs DSP.
• Consider creating bundles for giftable items.
• Don’t forget to update your storefront to highlight Prime Day deals and bundles.
• There’s a lot of competition for eyeballs on Prime Day - leveraging free tools such as Amazon Live & Amazon Posts can be a great way to stand out.

“We haven't been pushing a lot of integrated marketing campaigns for Prime Day given the uncertainty/timing this year. Instead, we’re going to look at using it to liquidate seasonal/end of life SKUs coming out of Summer and Q3, but even that has been challenging since it's so late.”

💬 Jordan Ripley, Bobsled Project Manager