Covid-19 Amazon Consumer Demand Update

Coronavirus has had a profound effect on consumer demand in the last few weeks since social distancing and quarantines began cross Europe and UK. Last week we published an article which explored the effects on demand for products on Amazon, specifically looking at the 1st week of March, right at the start of the lockdown in UK.

To continue observing these trends week on week we created the Emergent Keyword Analyser which classifies the top 100,000 Amazon search queries each week and shows changes in behaviours. Further to this we also monitor Amazon’s Top 100 Best Sellers across categories to understand change in supply and top sellers.

We can see that both the changes in demand as well as the challenges to product supply and fulfillment are significantly disrupting the current Amazon Marketplace. Challenges in product supply are leading to volatility in the marketplace with a 38% change in best sellers across categories. For sellers who currently have stock ready to ship, this provides an ample opportunity and a ripe moment to invest in AMS advertising, gaining sales velocity versus more established competitors which may have challenges in their supply chains.

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From a demand point of view, we can also see strong fluctuations. In our article last week, we saw that Masks and Disinfectants, or simply Coronavirus Essentials, had dominated the search queries right at the start of the lockdown.

After the initial couple of weeks of panic buying and essentials shopping, the last week of March offers a changing landscape in terms of shoppers’ demand. Despite still being in the top searches, in the last week we’ve seen a steady decrease in Coronavirus Essentials and Medicine. We predict that decline in demand will continue in the current weeks both due to the supply issues and due to the vast number of low-quality products such as rogue face masks currently in the market.

This decline in demand can also be seen with Medicine and Groceries, as more people have now stocked enough so demand will normalise in the next couple of weeks.

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From an YoY perspective, the change in demand for categories is still strongly focused on Medicine, Covid Essentials, Groceries and Personal Care products, with these four categories showing between 90% – 260% increase from 2019.

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What is interesting is the significant increase in Health & Fitness and Toys & Games categories, showing 70%-80% increase YoY.

In my first article, covering the data from the start of March, Health & Fitness was not yet a growing category but as we can see in the two weeks after the initial lockdown there has been a significant increase. This would have been also influenced by the growth of popularity in online yoga and workout classes which has inadvertently focused consumer demand on smaller workout equipment such as mats, bands and weights.

As suppliers are having issues with fulfillment, another trend emerges around pricing. We’ve seen pricing surge exponentially, with brands charging 80%-100% more since the last two weeks in March. A good example is the current #1 Best Seller in Yoga mats, which up till the 17th March was retailing at £12.95 and since then gradually peaked to £27.95 in the past week. This points to the fact that current suppliers from any of the in-demand categories can raise price exponentially without affecting demand as supply and fulfillment are still a challenge for many competitors.

Further to significant fluctuations YoY, we’ve also seen how quickly consumer demand changes WoW. Comparing the last week of March vs the one before, we’ve seen strong increases based on factors such as weather. The Home & Garden category has grown by 108% WoW, as weather has improved in the last couple of weeks and demand for “sun loungers” and gardening products have surged.

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Adult Games such as adult colouring books and adult jigsaws were also within the top 20 search queries last week showing the demand for home hobbies and relaxation help. We’re seeing this trend across wider platforms, with Google reporting x4 increase in searches for Meditation apps such as “Headspace”, so brands able to market products around mindfulness will see surge in sales.

Increase in demand for products for “self-care” is also visible in the Beauty category. Feel-good products such as self-tanners, bath products as well as make up continue growing. We are also seeing demand for home salon products such as nail sets and hair products, as people are replacing their usual manicure and hairdresser appointments with DYI alternatives. As mentioned in last week’s article, this is also widely driven by the increase in video conferencing both for work and socialising.

Finally, Fashion brands, despite the expected decline across most categories, can restrategise by pushing their “essentials” supply on Amazon. We’ve seen an increase in demand for underwear, socks and PJs, so selective supply and distribution within these categories will provide a consistent stream in revenue.

We will continue tracking the market fluctuations in terms of consumer demand over the next few weeks. We are currently helping numerous brands rapidly change their Amazon strategies to take advantage of the current landscape and launch products as the demand dictates, so feel free to get in touch in you’re looking for Amazon launch or support.

Joanna Lambadjieva, Managing Partner of Emergent Retail (part of Threepipe Reply)