The Orca Pacific Blog
Inflation and the extended holiday shopping period have undoubtedly shaped how shopping looked this year; brick-and-mortar traffic plummeted while a new wave of online shoppers drove eCommerce revenues to a record height from Cyber 5, a five-day shopping period spanning from Thanksgiving to Cyber Monday.
According to Adobe Analytics, Cyber 5 resulted in a 4% increase in online sales YoY, generating over $35 billion in sales.
However, factoring in inflation brings unit growth to -4 to -5% across online sales.
Nonetheless, we noticed that many of the brands in our portfolio were up 20-30% despite retail being down.
Other notable callouts are:
- Best-selling categories included toys, jewelry, sporting goods, apparel, books, and bigger ticket items like electronics and appliances
- Cyber Monday was the largest sales day, generating over $11 billion in sales
- Black Friday was the slowest-growing day, generating over $9 billion in sales
Our Cyber Week experience:
The brands we partner with witnessed a sales lift across the board; however, ad spending did increase due to the influx of competition due to supply chain constraints, increased inflation, and increased shipping costs.
Our holistic approach proved to be successful as it ensures a healthy balance between ad-attributed revenue and organic revenue, both of which were among this year’s top driving factors of sales. By working as an extension of the brand’s team, we work closely with everyone to ensure we drive traffic and convert shoppers accordingly.
We will dive more into this as we unpack the 4 takeaways from the five-day shopping holiday in November 2022.
The top 4 key takeaways from Cyber 5:
Despite higher costs and a second Prime-like event in October 2022, US shoppers purchased more items this year than during last year’s Cyber 5 shopping period. Amazon announced in an official release that this was the biggest shopping holiday ever, with hundreds of millions of products sold, and proves once again that brands who do not have a presence on Amazon risk losing revenue.
Takeaway 1:
Adoption of mobile shopping
Over the years, shoppers have grown more comfortable browsing online. Adobe Analytics data indicated that mobile accounted for 55% of online sales during the five-day shopping period, compared to 46% in 2021.
- On Thanksgiving, smartphones and tablets represented 55% of sales, up from 51% in 2021
- On Cyber Monday, 43% of sales came from mobile, up from 40% in 2021
While brick-and-mortar stores saw some foot traffic, over half of the total sales came from a smartphone alone during Cyber 5. This increase in mobile, paired with an early start to the holiday season, makes it all the more important for brands to stay updated on trends to remain competitive.
Takeaway 2:
Relying on deep discounts
To offset the supply chain disruptions, brands and retailers alike offered deeper discounts during these five days to drive consumer demand across the board.
In years past, the size of the discount didn’t matter as much as it did this year, where the average discount came out to 30%.
Our Amazon perspective:
In reviewing our performance data, we noticed that the brands not running deals or only running a small assortment of deals saw underwhelming results, including:
- Very little sales lift
- A drop in conversion rates
On the other hand, the brands that fully leaned into special pricing tactics across multiple products and categories experienced the opposite: an increase in conversion rates and total sales. The brands that ran relevant deals also saw a significant increase in impressions. This is a trend that will continue in the new year as retailers continue the attempt to unload inventory.
Takeaway 3:
The impact of paid search
In 2021, there were concerns surrounding supply chain constraints and high shipping costs. This year, the hot macroeconomic issue is inflation, so the question then becomes: how necessary is a robust advertising effort to support sales during economic hardships?
Extremely necessary.
Brands need a refined, strategic approach to retain revenue, page visibility, and long-term success.
Paid search was the number one driver of online sales, bringing in 28% of online orders during the five-day shopping period. Other avenues brought in the following:
• 18% of orders came from DTC websites, affiliates, and partner websites
• 17% of orders came from emails
• 15% of orders came from organic
Our Amazon perspective:
The rise in consumer demand and inventory led to more aggressive keyword bidding tactics during Cyber 5. We suspect this has largely to do with Amazon sellers and vendors attempting to make up for lost sales over the last year.
Additionally, we saw an increase in cost-per-click rates, which meant that brands had to spend more to achieve the same level of traffic as last year. This led to a 135% increase in ad spending YoY, indicating that inventory and supply chain issues have vastly improved since 2021.
We expect paid media to impact overall sales when executed correctly properly. However, it’s still imperative that brands focus on building organic relevancy to avoid staying a pay-to-play brand forever, as this is not sustainable to win on Amazon.
Takeaway 4:
Conversion rates are suffering
With more ad inventory for retailers and brands to offer discounts, shoppers are faced with more options. This, paired with an early start to the holiday season, undoubtedly impacted conversion rates in more ways than one. As a result, converting shoppers proves to be more difficult, especially given the current macroeconomic environment.
Our Amazon perspective:
Working as an extension of the brands we work with, our efforts were aligned across the board. We knew how competitive the ecosystem is and how conversion rates have been impacted as a result, including:
- A 55% decrease in conversion rates YoY:
- A 21% increase in click-through rates YoY:
More ad inventory resulted in more options for shoppers to choose from and more ad engagement, buoying the importance of a robust ad strategy during high-traffic periods. With these rates and the increase in price-conscious shoppers in mind, we urge our partners to ensure all product pages are optimized and retail ready to improve their standing on the Amazon platform. Learn more about A/B testing product pages for optimum performance here.
Sources:
Adobe Analytics
Salesforce
Flytedeck by Media.Monks
Not sure what to make of your Cyber 5 performance data?
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