For Snocksulting and SNOCKS, the year 2021 has begun. Therefore, Snocksulting managing director Romy Riffel and SNOCKS founder Johannes Kliesch sat down to discuss the last weeks of 2020 and the start into the new year. Snocksulting now looks after 20-30 Amazon accounts from different categories, which makes a comprehensive market analysis possible. Benchmarking and trend analyses in particular make it easier to evaluate the performance of individual accounts.
E-commerce in December: winners and losers
Snocksulting enjoyed strong sales figures for almost all clients at the end of 2020. Amazon sellers in the beauty and jewellery categories in particular had a strong Q4. There are several possible explanations for this. Firstly, very high marketing and advertising budgets are regularly used in these categories in the last quarter of the year. Beauty and jewellery products are popular Christmas gifts, which is why demand for these goods is generally high at the end of the year. In addition, due to the Corona measures, the entire German retail sector remained closed and gift shopping increasingly took place online. In contrast to the beauty and jewellery categories, clothing underperformed on Amazon in December.
SNOCKS has also felt this effect. After Black Friday, the sales targets for December could not be reached. In relation to Amazon, this is due, for example, to the already mentioned high advertising budget of sellers from areas such as beauty or jewellery. This increased the advertising costs on Amazon in December for all sellers. In addition, there was only limited buying interest in socks and boxer shorts, SNOCKS' top products, in late 2020. Alternative marketplaces such as OTTO represented a glimmer of hope for SNOCKS. There, all sales targets were even exceeded in 2020.
2021 holds uncertainties for e-commerce
At the beginning of the new year, some logical trends can be observed on Amazon:
- Food supplements achieve high turnover
- Alcohol products are hardly in demand
- Sports products have a high demand
These trends can probably be explained quite simply by New Year's resolutions. A look at the current Amazon market also reveals that the apparel category is not performing well, as it did at the end of 2020. This observation is also reflected in SNOCKS' first sales figures of the year. Added to this is an uncertain outlook for March, April and May, which are normally the strongest months of the year in terms of sales. Due to the global pandemic, it is uncertain when people will be allowed to go outdoors and meet in groups again. The outgoing restrictions jeopardise the wedding of SNOCKS products. In general, the year 2021 is marked by many uncertainties due to the ongoing crisis. At the same time, the SNOCKS warehouses are full: Due to the Chinese New Year, the factories there are closed in January and February. Therefore, all the goods for the expected high-turnover months had to be ordered already. If demand is further dampened by the ongoing crisis in spring, this could result in a liquidity problem. Johannes Kliesch is nevertheless positive, especially in view of the imminent opening of SNOCKS Coffee.
Finally, Johannes and Romy have a clear recommendation for all Amazon FBA merchants: If your products can be marketed through New Year's resolutions such as sport, reading or health, you should allocate advertising budget here especially in January. If, on the other hand, you offer alcohol or sweets, you tend to burn any advertising budget in January. Enjoy the podcast episode!
