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Momentum Commerce Analysis Shows Discounting on Amazon is Heating Up, Setting Stage for Dominant Holiday Season

Momentum Commerce today announced a new analysis detailing a steady, months-long uptick in discounting activity across Amazon US. With inflationary pressures likely impacting holiday shopping budgets for consumers, this trend towards more pervasive discounting is a positive sign for Amazon to capture a greater share of holiday shopping revenue in the coming months.


The release of this latest analysis comes alongside the addition of Amazon Prime Early Access Sale (PEAS) data into the Momentum Commerce 2022 Amazon Prime Day Brand Scoreboard.

To conduct the discount analysis, Momentum Commerce utilized its vast repository of Amazon search data. Specifically, Momentum Commerce examined daily pricing and discount data for all products ranking in the top 10 overall placements across the top one million keywords on Amazon between June 1 and October 18, 2022. Digital goods including software, gift cards, and eBooks were not included.

The analysis shows a notable peak in average discount rate during Prime Day in July, which quickly reverted to pre-Prime Day levels. However, since mid-August, the average discount for a product sold on Amazon rose steadily, hitting above 5% regularly since mid-September. While discounts on certain products were certainly much larger during Prime Day, this latest average discount level surpasses the July sale event.

There are several potential key drivers behind this trend. Brands may be attempting to sell down older inventory in advance of the holiday season. Other brands perhaps rose prices earlier, and are now discounting slightly to catch consumer eyes on the search page and better position their products versus competitors.

For Amazon, this shift towards larger average discounts naturally makes the retail site a more attractive option for consumers as the holiday season approaches. This is particularly relevant in the context of inflation, as consumers are expected to trim their holiday budgets, or at the very least spread out that spending over a longer period of time. This latter prediction was a major reason behind Amazon spinning up its Prime Early Access Sale in October.

“Lower prices have always been at the forefront of Amazon’s value proposition to consumers, and this latest data shows how this trend is accelerating,” said John T Shea, CEO and Founder of Momentum Commerce. “There are going to be more consumers looking to stretch their holiday shopping dollars in 2022, and Amazon is catering to those needs. Helping our clients execute effectively in this environment, and knowing when and where to discount, advertise, and optimize, is where Momentum Commerce is putting its focus.”

For brands selling on Amazon, it’s important to note that discounting activity naturally varies significantly even within a single sub-category. The Momentum Commerce Prime Day Brand Scoreboard research tool provides a clear window into how hundreds of thousands of different brands across more than 1,500 categories approached both Amazon Prime Day and Amazon’s Prime Early Access Sale in 2022. The data includes whether a brand cut prices, increased their advertising investment, or largely sat tight during each sale event.

For both Prime Day and the Prime Early Access Sale, users can also dig one level deeper. Clicking on a displayed brand brings up sale event pricing changes for a selection of that brand’s top products within the selected category.

“As we went through the process of updating the Prime Day Scoreboard around October’s Prime Event, it was important to add in functionality to provide deeper, product-level insights,” said Ben Saufley, Director of Front-End Engineering at Momentum Commerce. “The resulting drill-downs make the dashboard experience that much richer for brands.”

Particularly as the holiday season approaches, this product-level data helps brands understand the nuances of a given competitor’s strategy around each sale event, and how they should adjust going forward. The larger discounting environment makes these nuanced decisions even more critical to best positioning a product within a brand’s current competitive landscape.

The 2022 Amazon Prime Day Brand Scoreboard is free to access and can be found at https://momentumcommerce.com/prime-day-scoreboard.

 
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Momentum Commerce Teaches Amazon at Harvard Business School & Charlesbank

In a single week this past September, Momentum Commerce leaders gave two advanced audiences detailed talks about what it takes to win on Amazon. Our CEO John Shea taught an MBA class at Harvard Business School, while our head of strategy Eileen Devor led a discussion at Charlesbank’s invite-only Digital Day conference.

Being a part of both events was thrilling, and a nice moment of recognition. Momentum Commerce isn’t even two years old, so already getting invited to speak at some of the nation’s most prestigious business institutions means we’re likely doing things the right way.

Now, let’s get into what John and Eileen covered in their respective sessions.

On Monday, September 19th John Shea joined Ben Kirschner’s digital marketing MBA course for a guest lecture on digital advertising. Eric Gesimondo, the COO of our client XMONDO, tagged along with John to help present some real-world examples and spur discussion. 

With roughly 30 students in attendance, John did a thorough run down of Amazon strategy, how this relates to an emerging brand like XMONDO, with lots of interaction coming from the class itself.

A brief overview of the topics covered:

  • The Amazon Ecosystem, Why it’s Important, and Why it’s Exciting
    • If Amazon was a country, it would be the 23rd biggest economy in the world
    • Amazon’s structure has allowed it to grow this fast, and why it’s outpacing Walmart
  • The Nature of Amazon’s Dominance
    • Amazon provided a way for Chinese manufacturers to have a more direct road into US sales – a huge change from how things worked in the past
    • Now, with advertising on the site becoming necessary for brands to succeed, they’ve developed a more multi-dimensional business model as the marketplace grows more complex
  • A Background on XMONDO
    • A great example of merging a social concept like hair care with the ability to buy those products
    • After starting D2C, the question was ‘what justifies a move to Amazon’?
  • Cold Calling the Class on Pros and Cons of Selling on Amazon
    • Some example pros the class came up with: improved growth potential, capturing demand already going to Amazon
    • Some example cons the class came up with: potential for unauthorized resellers, potential cannibalization of D2C sales
  • Variances in Potential Strategies for Amazon
    • 1P vs. 3P and why a 3P strategy is likely the best for a company like XMONDO still growing rapidly
  • Exercise: Best New Category for XMONDO to Enter?
    • John provided some real-world market data around the ‘Styling Tools & Appliances’ and ‘Coloring & Highlighting Tools’ categories with a class discussion on what makes one or the other a better theoretical target for XMONDO to enter
  • Exercise: Using Data to Inform Marketing Spend or Discounts
    • After showcasing the Amazon Search Trends tool, John went through specific relative stats to track when deciding to increase marketing spend or instead mark down the price of a given product

Thursday of that same week Eileen Devor spoke at Charlesbank’s Digital Day conference. This more discussion-based session was laser focused on ‘How to Win on Amazon,’ with Eileen taking the attendees through a number of concepts specific to Amazon, and then soliciting thoughts from the audience.

  • Giving your products the greatest advantage on Amazon
    • Amazon’s ad business has grown faster than Google or Facebook, and you need to leverage those paid placements to drive growth
      • As the ecosystem has ballooned so quickly, so has the complexity of navigating it appropriately
    • Brands need to have a more nuanced approach to when and where to invest in certain ad products, along with developing a system to continually refine segmentation, targeting, reporting, and subsequent investment
      • This approach needs to be conducted on a product-by-product basis to drive consistent growth and outflank competitors
  • Applying competitive intelligence effectively on Amazon
    • Focus on understanding the competitors in your space and how they price, perform and market their products.
      • Relative statistics (e.g. number of reviews vs. your competitive set) matter more than ‘raw statistics’ (e.g. just the number of reviews alone)

Eileen had some great conversations after introducing these concepts, and an overarching theme was that many brands simply don’t have this data available to them, or the processes in place to activate that data at scale. A bit of a humble brag – this is Momentum Commerce’s bread-and-butter.
If you’re interested in a Momentum Commerce executive education session on Amazon at your company, shoot us a note at hello@momentumcommerce.com

 
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Know Your MC: Matt McKeon, Retail Media Manager

This is the fourth of an ongoing series profiling Momentum Commerce team members (MCs for short). Click here to see more of our team, and be sure to check out our open roles!

Before coming to Momentum Commerce, what was your experience in the eCommerce space?

During college is when I first started developing an interest in eCommerce. This is when dropshipping was becoming more well-known, and the ecosystem around that piqued my interest. After I graduated, I jumped straight into Amazon at Pharmapacks. I was just the second hire on the marketing team, meaning I got thrown into the fire almost immediately. I was doing a little bit of everything associated with running an Amazon business – which was a lot of work but it allowed me to learn so much. I stayed at Pharmapacks for four years, first as an analyst, then moving up to a manager position with a half dozen people on my team.

What made you want to make the jump to Momentum Commerce?

I found out about Momentum Commerce from a former coworker of mine Aisha Khan. Aisha gave me a glowing review of the team, and asked if it was OK for her to reach out to me if she thought there was a good fit. That got me in touch with people like Todd Bowman – who seemed like a genuinely nice person, and also really smart. That’s something I was looking for in a company, and it’s the same feeling I got after chatting with John Shea, Jay McQuillan and Kelsey Scarzello. Just such a strong team for such a young company. I knew that being at a startup meant I’d have an opportunity to learn, but also grow and make more of an impact than at a big, more corporate company.

How would you describe the journey so far?

So far, it’s been amazing. Everything I wanted when joining has come to fruition. I’m feeling like part of a team and that I’m making an impact. I love the transparency from John, Jay and all the way through the organization. You don’t see a lot of companies do it, and if they do, it gets lost really quickly. The fact that leadership and everyone holds themselves to be transparent has been refreshing.

What’s your favorite work memory?

I’m sure it’s shared across a lot of people, but the Newport trip is my favorite memory so far. For such a young company to do something like that for the employees is a testament to the culture and what the founders are trying to build here. There’s nothing like meeting and getting to know people in person. You get some of that through Zoom, but the summit really helped solidify the connections across the company.

What are your favorite things to do outside of work?

I love anything on the water – boating, kayaking, paddle boarding – and I even rode in jet boots once. Since I was a baby, I’ve been out on the water, and I worked at a marina during high school.

What’s a fact about you that might surprise some people?

I’m a huge New England Patriots fan, despite living in New York. The first football game I remember watching was the first Pats Super Bowl win. After Brady’s third Super Bowl I was all in. Then, I ended up playing quarterback in high school, but I wasn’t very athletic, so Brady was a great role model for me. I got a lot of grief during high school and college, so it’s been great to have so many Boston-area folks in the company.

 
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Know Your MC: Grace Abraham, Retail Media Analyst

This is the third of an ongoing series profiling Momentum Commerce team members (MCs for short). Click here to see more of our team, and be sure to check out our open roles!

Before coming to Momentum Commerce, what was your experience in the eCommerce space?

I’ve always been an avid online shopper, but before joining Momentum Commerce, my eCommerce and retail experience was more on the consumer side. I worked in luxury retail for a time, and we had a smaller eCommerce presence that was part of the job, apart from the brick-and-mortar sales. Outside of that, my background is in corporate tax accounting, which I was good at, but was consistently dry and boring.

What made you want to make the jump to Momentum Commerce?

From my time in college I have some marketing background, both as a minor during my undergrad and then a separate product marketing certification. Then, when I was in luxury retail, I really fell in love with brands and what makes them special. I felt right away that this was more my jam, and eCommerce is the fastest growing, most lucrative platform for brands, so that’s where I gravitated. To start that journey of my career I wanted a CEO mentor. I reached out to a few folks completely cold, and one of them was John Shea. After chatting with him, he suggested I apply for a role at Momentum Commerce, and a few weeks later I got the job. So my transition to eCommerce was a bit quicker than expected, but I was overjoyed at being able to make that change in my career.

How would you describe the journey so far?

It’s been a fun one! At first I was scared, but it’s awesome to have the support of a team, and lean in on my intrinsic motivation to learn a lot quickly. I’ve worked with awesome brands like XMONDO, and helping drive their success has been incredibly rewarding. To be honest, at first I didn’t know if I was going to like it – Amazon-centric eCommerce is naturally a bit more niche, but it’s been really fun. Advertising is a cool challenge that has immediate results, naturally holds you accountable to goals, and necessitates you constantly adjusting to meet them.

What’s your favorite work memory?

I mean, it has to be the Newport summit this summer. Hanging out and getting to know everyone a bit more was so much fun. There was a lot of laughing and bonding watching this one man act at a bar in Newport doing everything from Beyonce to country music.

More broadly, the whole experience really helped foster more of a whole company relationship. I had built relationships before the summit with different pockets of the company, but not collectively with the whole company. By the end, I had this ‘wow’ moment – everyone’s on the same page individually and collectively. Just reinforced that this is a great company I want to stick with!

What are your favorite things to do outside of work?

I like to go to the gym, but my favorite activity is collecting odd things. I’ve got a lot of Simpsons artwork, 3D-printed character heads, and other quirky things. I love art and graphic design, so stuff like this just brings me a lot of joy.

What’s a fact about you that might surprise some people?

I ziplined across a lake full of alligators one time. A little scary, but memorable.

 
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Video: How and Why We Built the Momentum Commerce App

Earlier this year, Momentum Commerce, announced the launch of app.momentumcommerce.com. This platform contains Amazon reporting, insights, and advanced strategic tools – all carefully designed to help brands understand what is happening in their Amazon business, why it happened, and what they should do to grow.

The new Web-based software connects multiple years’ worth of Amazon reporting, search, and product data together with Amazon Seller Central and Amazon Vendor Central information, layered with sharp visuals and data enrichments to make insights clear and actionable.

The app provides brands with a deep accounting for their own progress on Amazon across advertising, inventory, digital shelf, and other key business functions. Additionally, metrics can be benchmarked against competitors, and research tools illuminate the “state of play” of other categories on Amazon when investigating potential new product launches.

Building the app wasn’t easy, but it was absolutely necessary to address the current realities of being a successful Amazon seller. Insights unveiled within the tool make performance easier to track, while exposing tactical and strategic changes that can make a difference.

So, how did we build the app? Why did we design it the way we did? Let’s have our product and engineering team explain it themselves.

To learn more about the Momentum Commerce App, and how we can help your brand perform better on Amazon and other retail channels, please shoot us a note at hello@momentumcommerce.com, or fill out the form below.

Learn More About Momentum Commerce's New Insights Platform

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Know Your MC: Noah Jones, Senior Retail Media Analyst

This is the second of an ongoing series profiling Momentum Commerce team members (MCs for short). Click here to see more of our team, and be sure to check out our open roles!

Before coming to Momentum Commerce, what was your experience in the eCommerce space?

I came out of school with a degree in music business so my first jobs out of school focused on music marketing for non-profits and festivals. There was a lot of moving from one short-term engagement to the next, and within a couple years I decided I needed my career to have more stability. That’s when I moved over to Merkle as an analyst on the Amazon and e-retail team. It was something I took to quickly, helping manage clients’ search and larger retail media buys across Amazon, Walmart, Target, and a variety of other marketplaces.

What made you want to make the jump to Momentum Commerce?

Strangely enough, it was almost the opposite of wanting stability. At a holding company agency there is not a lot of room for growth, and at the analyst level you do not have much say in how things get done. I wanted to help good people build a good company from scratch. Todd Bowman was actually the connection between my time at Merkle and Momentum Commerce. Todd must have given John my name, and he reached out to me. After talking with John I really got it, and I’m so glad I made the change.

How would you describe the journey so far?

It’s been a roller coaster – but a fulfilling roller coaster. I didn’t realize how many cool people are in this industry. The co-workers and clients have all been great people to work alongside. And over the last year, it’s pretty amazing being part of something growing from what Momentum Commerce was when I joined, to now. I’ve built some friendships along the way, and being recognized with a recent promotion felt incredibly gratifying.

What’s your favorite work memory?

I live in New York City, so the trip where a big contingent of folks came up to Manhattan is a definite highlight. You know they are great through the time we’ve spent on Zoom together but meeting everyone for the first time, all being in the same room, you really get a better feeling for who they are as people. On that same trip we golfed all together as a team, and it was a ton of fun.

What are your favorite things to do outside of work?

Music is still a big part of my life. I’m always attending concerts and other music events. I only moved to New York City about a year ago, so I’m still exploring a bit more of the city. I also love rock climbing, and looking to get back into a local league for ultimate frisbee, which I played in college at UVA.

What’s a fact about you that might surprise some people?

I founded the Chocolate Milk Monday club in High School.

 
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