We’re back for another episode of MikMak’s 12 week holiday countdown. This week, we’ll be featuring an exclusive interview with Pacvue’s Director of Marketing, Adam Hutchinson, to compare the shopping insights we’re seeing from our first-party data, and report the trends and forecasts you should be watching out for this holiday season.
MM: Welcome Adam, thank you so much for joining us for the second week of MikMak’s 12 week countdown. Although 2021 is still a pandemic year, many shoppers have begun returning to stores. How do you see the holiday season play out this year for shoppers?
AH: Thanks for having me here. The 2021 season will be another record-breaking year for eCommerce. We’re still in the midst of an uncertain pandemic environment, so while we may see some holiday shopping return to brick & mortar, eCommerce will continue to play a big role. With that, holiday shopping will begin earlier than ever this year - like, now!
MM: I love it. And what about brands, what can they expect?
AH: To put it simply: advertising will be expensive. According to Pacvue first-party data, average CPC for Sponsored Products on Amazon in Q4 2020 was at an all-time high of $1.19, up 10% year-over-year. Costs are still rising. In Q2 2021, average CPC for Sponsored Products was $1.22, up 36% year-over-year.
MM: This is definitely something we’ve been hearing too, Adam. Not just the cost of advertising, but raw materials, labor, fuel — everything. More than ever, this is the year for brands to get it right.
AH: Yes. But it’s also an opportunity. Brands should be watching their competitors closely and capitalize on moments when they’re out of stock or run out of budget in their ad campaigns. Something we’ve been talking a lot about at Pacvue is moving beyond ROAS. Peak periods like Black Friday and Cyber Monday are invaluable opportunities to reach new-to-brand customers, drive awareness, and build a pool of page visitors that you can remarket to later, so it’s important to define holiday success holistically. Now is the perfect time to take full advantage of display, social, and other ad types across marketplaces.
MM: So let’s talk more about omnichannel. Our Shopping Index finds that this holiday season, omnichannel commerce will help consumers get what they want to buy in time. Is this also a trend you are seeing?
AH: Definitely. In fact, one of the most interesting trends to come out of the eCommerce boom from the past 18 months has been the rise of alternate fulfillment models, such as curbside pickup, which has benefitted traditional retailers like Walmart and Target. While pickup has traditionally been popular in the CPG category, brands of all categories should ensure they have enough inventory with these channels for the holiday season and lean into advertising and marketing across omnichannel retail.
MM: Very much agree. Given Pacvue’s expertise in helping brands optimize advertising on Amazon, can you give us some insight into what you see consumers purchasing this year?
AH: Well, an interesting trend we’ve seen at Pacvue is that demand for at-home items isn’t slowing down. In fact, it’s accelerating. Demand in the Home & Kitchen category on Amazon typically stays flat over the summer months, but according to Pacvue’s Q2 2021 CPC Report, the average daily ad spend in the category increased 35% in June.
Many people moved to new homes during the pandemic and people also took up new at-home hobbies, such as home improvement, cooking, gardening, and fitness. The 2021 holiday season is going to be a good opportunity for brands to capitalize on this trend.
MM: And how can brands best do this? Especially on Amazon?
AH: It’s important to know that more and more consumers use Amazon as a research tool, similar to Google, so start promoting early in the lead up to microseasons.
For example, for Valentine’s Day 2021, both Amazon and Google saw searches containing the phrase “Valentines day gifts for…" start to increase right on New Year's Day, instead of late January that is more typical for Amazon. There were 804 different "valentines day gifts for…" search variations in the top one million searches in 2021.
Holiday shopping is beginning early as well. Search term data from Amazon, or any marketplace, is a rich trove of data to uncover consumer behavior. Start looking at which terms are rising in popularity, even if the volume is still small now, and ensure you have campaigns ready to go targeting those keywords. Also monitor hot products (what will be this year’s Instant Pot?) and cross-promote your own items, use display to get in front of high traffic categories, and never sleep on remarketing opportunities across channels after the peak has passed.
MM: Thank you so much for chatting with us, Adam!
AH: Thanks!
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