Notes from Amazon’s Biggest Online Conference, Amazon Accelerate 2020
Amazon is hosting Amazon Accelerate, a virtual conference aimed at helping third-party sellers grow their businesses.
In this article, we’re going to take a look at what was discussed during the three-day event (September 1-3).
Highlights:
- The opening session focused on the impact of COVID-19 and how it’s the perfect moment for Amazon and third-party sellers to “stick together”.
- Amazon announced it will spend $100 million this year to promote small businesses during Prime Day and throughout the holiday season.
- They dedicated a section to flatter us sellers for all that we have contributed in times of COVID-19 (of course, these charming words are only a segue to the controversial topic of how Amazon competes with selling partners).
- Amazon launched more than 135 new tools and services this year to help sellers manage their businesses and connect brands with customers.
- Small and medium businesses with more than $1 million in sales increased by 20% compared to last year.
- Amazon invested $30 billion dollars in FBA over the course of 2019 and 2020.
- Amazon aims to manage the end to end supply chain from manufacturers to end consumers.
- Sellers can now book, manage, pay, and track ocean and air freight services from China to fulfillment centers within the US and Europe right from within Seller Central.
- Amazon also announced the launch of a new tool called Amazon Inventory Manager.
Day 1: The Impact of COVID-19 and the Importance of 3rd-Party Sellers
Jeff Wilke, CEO of Amazon retail Division, opened Day 1 of the event with a discussion on how sellers can thrive on Amazon. In this first part of the article, we’re going to take a look at the most important topics Jeff Wilke talked about in his keynote.
Ecommerce Amidst a Pandemic
The impact of COVID-19 has brought many difficulties for small businesses. The opening of this session focused on how to survive this reality that we are facing now and mentioned that it’s the perfect moment for Amazon and third-party sellers to stick together.
How to face this pandemic on Amazon. In terms of navigating this COVID situation, Jeff believes that it’s more important to focus on “what doesn’t change for customers” Often, people underestimate the cost of the entire journey of going to a physical store to buy a product. Finding a selection that customers really like and then lowering the cost of the products will help reach more customers. COVID-19 isn’t a situation that we should lose in terms of eCommerce–on the contrary, there is more demand and therefore more opportunity to succeed.
How Amazon managed this situation and what decisions they took to survive. Hundreds of decisions and changes have been made, but some of the most impactful ones are related to the safety of Amazon’s employees. As we know, Amazon hired 175,000 people so that way they were able to focus on what the customers needed the most (medical supplies, food, basic products…) Also, Amazon has launched more than 135 new tools and services this year to help sellers manage their businesses and how to connect brands with customers.
However, as a seller, we are still concerned about how holiday purchases will look in this context. The holidays will be different across the industry. Amazon announced it will spend $100 million this year to promote small businesses during Prime Day and throughout the holiday season. So, one of the advice for holidays, according to these experts, is we need to get ready for Prime Day soon since customers are looking to buy products earlier. Buy early and sell early, said Jeff Wilke.
As part of their discussion, they dedicated a section to recognize the role of sellers in this pandemic, exemplifying and flattering us for all that we have contributed in times of COVID-19, and how we are creating jobs (1.1 million jobs registered until now). Of course, these charming words that they dedicate to us are only the introduction to talk about a controversial topic: how Amazon competes with selling partners.
The message that Jeff Wilke wants to send us throughout the session is very clear, “sellers are important for Amazon because they are important for customer experience”. In Wilke’s words, they don’t have an interest in the limited performance of sellers.
How are we protected as brand owners? If you’re having a terrible experience as a third party seller (because of black hat tactics used by other sellers), they talked about your options. Amazon invested in new tools and programs such as Project Zero (over 10,000 brands using it), Transparency Program (7,000 brands using it) and CCU program to prevent fraud and prosecute these individuals.
What kind of business will lead you to success?
Jeff Wilke encouraged us to succeed as a seller by:
- Offering high-quality items
- Maximize your profitable margin
- Chase latest trends products and get out before everybody else jumps in
The most important strategy is to focus on things that the customer will love, like low prices, great selections and good customer experience.
Day 2: Building your Brand Using Amazon's New Tools
On Day 2 of the Conference, Christine Beauchamp (President of Amazon Fashion) explained how sellers can build or grow their brands in Amazon’s Stores through new tools to help sellers reach customers, incorporate the brand’s voice in the shopping journey, and create new ways to connect brands and customers.
Fundamentals
Here are some key elements that Christine Beauchamp mentioned which are important to provide a good customer experience:
- Product quality
- Assortment breadth
- Availability to ship quickly
- Excellent value for the price
Another thing you have to keep in mind when building your brand is data quality since it can help improve shopping results and make it easier to discover your products. Here some tools she mentioned:
- Seller listing quality Dashboards
- New tool: Fix your products (identify root causes for listing issues)
Merchandise your Product and Brand
After establishing the foundation of your offering, the next step is elevating each of your products through the perfect merchandising and investing in discoverability. According to Christine Beauchamp, some of the best ways to attract customers are:
- High quality and multiple images
- Customer reviews to increase your sales
- Seasonal events and promotions (Prime Day and Holiday)
How to merchandise your entire brand beautifully? The most important way to highlight your unique positioning and values as a seller it’s creating consistent and compelling brand content through the customer journey.
- Brand Registry
- Brand Stores
- Discovery in Search (new)
- Versioning & Scheduling for events (new)
- A+ Enhanced page content
Beauchamp also encouraged us to amplify our brand with strategic and measurable marketing, or in other words, Sponsored Ads. Amazon offers 3 new kinds of Sponsored Ads to grab the customer’s attention:
- Embedded video creative
- Shop by brand (Beta)
- Posts (Beta)
Amazon presents different programs to help sellers engage with customers both within and outside Amazon’s Store:
- Amazon Live
- Associates Program
- Creator Connections (new in Beta)
As a seller, you probably want to learn how customers engage with your brands and products in Amazon to customize your strategy across channels. Fortunately, Amazon offers sellers a bunch of data tools such as:
- Brand Analytics
- Search Terms (new tool)
- Market Basket Analysis (new tool)
- Demographics (new tool)
- Repeat Purchase Behaviour (new tool)
In addition, Amazon built tools and products to facilitate a test and learn mindset, adapting to customer preferences over time. Christine Beauchamp mentioned these tools:
- Manage your growth
- Manage your experiments
Sellers believe that building a long-term customer relationship management strategy is one of the best ways to grow any business. So here are some new tools that Amazon is launching:
- Brand CRM Tool
- Brand Follow
They also announced that they are investing in brand innovation in search and discovery to help customers find and quickly navigate products. Here some new experiences and tools that they are launching:
- Shopping Pages
- Prime Wardrobe
- Product Fit
- Virtual Try-On
Day 3: Inside FBA–Looking to the Future
Devesh Mishra, VP of Amazon’s Worldwide Supply Chain, opened Day 3 with a keynote discussing how the pandemic disrupted logistics in all levels, Amazon’s investments in their fulfillment and delivery network, policy changes they’ve made recently, expansions to cross-border fulfillment, and a new tool called Amazon Inventory Manager.
How third-party sellers are faring this year
Devesh echoed the sentiments of many sellers this year: the disruption of the last 6-7 months due to the pandemic is something he’s never seen before, despite having worked for Amazon for 15 years. Even so, third-party sellers flourished on Amazon this year:
- There are now more than 1.5 millions small and medium businesses selling on Amazon
- Third-party sellers account for 60% of product sales
- American small and medium businesses sell more than 6500 products per minute
- SMBs with more than $1 million in sales increased by 20% compared to last year
Investments to FBA and Increased IPI threshold
He also talked about the investments they’ve made on FBA over the course of 2019 and 2020:
- $30 billion dollars invested
- 33 new fulfillment centers in 2020
- 35 million cubic feet new capacity for 2020 peak
- Spent $38 billion on shipping
- Placed orders for 100,000 electric delivery vehicles
- More than 80 planes in Amazon’s fleet by 2021
After a barrage of flattery and thanks to third-party sellers, peppered with screenshots from sellers who are super thankful for FBA’s services, Devesh touched on a topic many sellers aren’t happy with: increased IPI.
You might have been affected by Amazon’s increased IPI threshold that went into effect last month. To be fair, what Devesh said is true: they needed to optimize the supply chain to meet crazy high demands that they expect for this year’s peak season. And they did offer free removal for 6 weeks.
The future of FBA
A lot of new things are coming into FBA in the coming months. It looks like Amazon is hell-bent on dominating logistics for consumer goods:
- Cross-border fulfillment will be expanded
- Amazon aims to manage the end to end supply chain from manufacturers to end consumers
- Sellers can now book, manage, pay, and track ocean and air freight services from China to fulfillment centers within the US and Europe right from within Seller Central
- Amazon is expanding the program where customers can buy your products while they’re still in transit to them
Amazon Inventory Manager
Devesh also announced the launch of a new tool called Amazon Inventory Manager. It was a little cryptic but here’s the gist of it:
- It’s going to be a highly selective program for which enrolment will open soon
- You can increase your sales by offering one-day or same-day shipping for selected ASINs
- This will help you reduce costs
- The program will directly create shipping plans for enrolled ASINs and simplify inventory management decisions for you
Devesh ended the keynote with a reminder that this year’s peak season will be entirely different from past ones. He also reminded sellers to help make the process easier by making sure to provide accurate information on incoming shipments.
Amazon Accelerate is finally over! Let us know what you think of the event in the comments down below!
