Coronavirus has shifted consumer behaviour dramatically over the last few weeks. With more bricks and mortar stores closing and social measures taking place online shopping for all products is becoming the norm. And while a lot of retailers are still re-working their supply chains and distribution to cope with the significant surge in online demand, Amazon is already able to cater for this demand across pretty much majority of product categories. For Amazon, the corona crisis is an opportunity to further expand its already dominant market position as a primary online marketplace.
It is not surprising then that since the quarantines and social distancing measures started across Europe, we’ve seen a continuous growth in audiences going to Amazon. As seen from the graph below the significant jump in searches for Amazon are aligning with the start of the quarantine in Italy (9th March) and Spain (15th March). We expect these trends to continue as more measures are put in place in limiting people’s access to goods in bricks and mortar stores.
How has the Coronavirus affected UK Amazon demand?
Masks, disinfectants, medicine and fresh food sales are booming on Amazon. We’ve seen that in the first week of March, of the top 100 search queries on Amazon, 52% were related to Masks and Sanitisers while in comparison with the same period last year 44% were focused on Consumer Tech. Moreover some 66% of the top 1000 queries this year are different from the same time last year, showing the scale of change in terms of customer demand.
Aside from Covid-19 necessities and essentials, we’ve seen several categories grow significantly showing large demand opportunities for brands.
We analysed the top 1000 searches on Amazon UK to see what trends are emerging across categories. We’ve seen that the demand for hygiene products, household essential and medicine has completely distorted the normal consumer pattern. On the graph below you can see a comparison YoY for the change in the number of search terms within each category. The orange bar below shows loss in search terms vs LY and the green shows gain.
What is surprising is Fitness & Exercise is down based on number of search terms, however from sales data we know this category is doing extremely well. One of the reasons for this could be stock issues whereby there is not availability to make a purchase leading to fewer searches for these products as well as the data based on the start of March whereby the country was not completely quarantined yet.
If we exclude household essentials, masks and hygiene products, we can see a clearer picture of how the rest of the market is performing. There are big gains for Pet Care, Beauty, Toys & Games and Consumer Tech that gives us an indication what consumers are shopping for. We’ve seen 5 categories with an especially strong increase: Petcare (81% YoY), Alcohol (298%), Adult & Sex Toys (46%), Beauty (53%).
Unsurprisingly the category which has been hit the worst from the Covid-19 crisis has been Fashion and Accessories, with more people staying at home and not planning for holidays or social gatherings in the near future.
Category Deep Dive: Toys
With more people having to work from home and tend to their children at the same time, we’ve seen a surge in search queries relating to toys and board games.
Nearly all type of toy & games-related search terms have seen a gain in terms of search frequency. We have seen also significant increases in adult game search terms, with the search term “board game adult” jumping to top 2000 search terms vs last year when it was not appearing even in the first 255k terms. Same applies to different types of family and drinking games. As we’ve seen video conference socialising and parties have started becoming the new way people connect and this is going to create also new opportunity for group games online despite the quarantines.
An interesting trend is the increase in learning and educational games searches, with brands such Orchard Games starting to appear in the top 3000 searches which is a significant jump considering that these independent brand terms normally appear past 100k rank in non-peak periods.
One of the few Toy sub-categories which has been negatively affected has been Travel and Outdoor toys which unsurprisingly may take some hit with focus shifting towards indoor play.
Category Deep Dive: Petcare
As shopping is becoming more restrictive and people are encouraged to minimise unessential trips, customers naturally shift purchasing priorities on heavy items such as pet food with preference towards home delivery vs in-store purchases. This leads to a strong surge in all food-related search terms. In addition, with people having more time to spend with their pets at home, items such as treats, toys and bath products have increased in demand.
We are seeing very strong increase in frequency for cat products with “cat litter” and “scratching post” both ranking within the top 400 search terms on Amazon.
Again, following the trends, the only types of search terms that have decreased in terms of average rank are outdoor related items such as harnesses, leads and collars.
Category Deep Dive: Beauty
Beauty is another category which has seen strong gains particularly when it comes to Skin and Body care. Products such as face creams, serums and facial tools are seeing increase in demand. Same applies to “feel-good” categories, such as bath bombs and bath products as people are looking to pamper themselves.
Surprisingly some categories which may intuitively seem should be seeing a sharp decrease have not been hit and we are still seeing strong demand for items such as fake tan, make up and perfume. This could be due to the increase in video and online communication as well as the psychological factor of customers aiming to find ways to feel better.
How should manufacturers deal with the changing landscape in the best possible way to emerge as winners?
The current situation poses both a challenge for some categories but also a vast opportunity for others with the increase demand and shift in online spending.
Brands in the above-mentioned categories can find a long-term online customer even past the quarantine if they are able to answer the demand and provide the right customer journey. As competition within these categories increases, the use of well-structured and targeted advertising as well as optimised product listings will be decisive factors on whether brands maximise their growth potential within the channel. Another key factor in winning in this environment will be the use of insight and data to understand how customer demand changes on daily basis and how audiences search for each brand’s products and what features they find important in the selection.
Brands making decisive steps to building their presence on Amazon by using data-led strategy will see both short- and long- term growth acquiring loyal customers and gaining market share vs competitors.