Advertising and inventory are the yin and yang of an ecommerce business: you need inventory in order to advertise, and you need advertising in order to sell your inventory. Both are necessary for the success of your business, and both work together to help you kill it on the sales front.
While advertising can be extremely good for business, there is an unpleasant side effect that increased advertising can cause which isn’t so good for business, especially not on Amazon: inventory stockouts.
Stockouts can generally lead to disappointed loyal customers and the loss of potential customers across your sales channels. On Amazon, however, stockouts don’t just disappoint customers: they make your listings practically disappear.
Here’s how it happens. When your brand starts pouring more money into advertising a product on Amazon, you generate more traffic on that product’s listing. If you’ve got good conversion rates, increased traffic through advertising means you’re going to sell out faster.
Without a safety net or proper planning, that stockout will create two major problems for your business:
**1. Wasted ad dollars: **your product could go out of stock at any time, and every minute advertising is not paused on that product could be a minute of ad dollars wasted, which adds up quickly. Advertising inventory that is low in stock can be problematic as your advertising might be what drives the sales to push the product out of stock, wasting ad spend that could have been used elsewhere and causing an item to go out of stock, lose it’s rank, and force customers to buy other brands.
**2. Lowered rankings in organic search results: **Amazon has no awareness of when or if a product will be restocked, so once an item sells out and traffic and sales drop off of the listing, marketplace algorithms will push that product listing lower in the search results, making your product all but invisible to customers, even when it comes back into stock.
“The ramifications of running out of stock are pretty heavy,” said Mitch Park, Director of Product Management at Pattern. “Customers can’t find you, and so you don’t sell anything, but the trickle down effect is you start losing out on your organic rank. Your best seller ranking goes down because your sales drop because customers can’t find you.”
Lost sales are twofold, added Tony Morales, Director of Advertising at Pattern. Not only do you lose sales for every day your item is not available to be purchased, “but also when it comes back online, it may have been selling, say, 100 units a day, but because its ranking is lower and it’s on a different part of the page, maybe now it’s only selling 20 units a day when it comes back in stock. Even though you’re back in stock, you’re essentially still losing out on 80 units a day.”
“The best thing we can do,” Morales said, “is just make sure we never go out of stock to begin with.”
Manually tracking your inventory shortages and pausing your ad spend so you don’t waste money is both inefficient and exhausting, especially when you have a hundred plus products to keep track of and limited manpower.
The best solution to prevent your advertising from turning into a money pit and protect your brand from stockout penalties on Amazon is through Pattern’s one-of-a-kind, expansive ecommerce tool Predict and its newest feature, In Stock Protection (ISP), available to Pattern brand partners now.
Launched in November 2020, the In Stock Protection (ISP) feature on Predict is specially designed to automate the ad spend process for you so that you can save money, keep your products in stock, and protect your ranking on Amazon without breaking a sweat.
Through the ISP feature, Predict provides your brand with daily updated data on how many units you have on hand, how many you’re currently selling per day, and when your anticipated restock date is. Using that information as a baseline, Predict will automatically pause advertising on Amazon for products that are running low on inventory, divert ad dollars to other products, and re-enable ads once additional inventory is available.
“Everybody wants to advertise to sell more units, but if you don’t have enough items in stock, essentially what you’re doing with your ads is you’re accelerating your time to be out of stock,” Morales said. “What we’re doing here is we’re essentially preventing that from happening, saving the money we spent on ads, and hopefully prolonging the time that that item can be in stock from natural sell through until the next order comes in so that they have more units such that they don’t run out and don’t lose their ranking.”
In addition to giving you detailed data about your inventory, Predict provides personalized reports that give your brand insights on how many ad dollars you were able to repurpose by pausing ads on low stock products and how many organic sales (meaning sales that you would have missed out on had your product gone out of stock) were protected.
Predict will pause advertising for products that meet one of the following criteria:
“If you’re not likely to meet weekly demand, we’re going to pause ads to protect spend. If you’re not likely to meet demand for two weeks, including inventory that’s coming, you’ll be paused for that, too,” Park said.
Let’s say you sell an expensive jewelry item and you only have one left in stock, but you typically sell five a week. In this scenario you also aren’t expecting a restock within the next two weeks. If you keep advertising, those five people who normally find you via ads aren’t going to all be able to purchase that jewelry from your brand that week. To protect your organic sales and make your last unit as profitable as it can be, Predict will automatically pause advertising on it and divert it elsewhere until your next shipment of jewelry arrives and is processed.
“This is all done without the user or an employee having to worry about it or keep track of what’s going on, which is a big benefit,” Morales said.
Maybe you don’t want Predict optimizations to run on a certain product because it’s a holiday special and you need to sell out of it. ISP can easily be overridden to allow for stockout exceptions.
ISP runs across all global Amazon marketplaces, streamlining international inventory and advertising processes as well as domestic. Currently, Predict and the ISP feature are only available to Pattern brand partners.
Since the In Stock Protection update launched in November, Pattern has been able to repurpose over $1.03M USD in global ad spend and protect more than $2.41 million USD in organic sales for brand partners.
“Across the board for all of our brands, we have made adjustments 12,000+ times. That’s more than any person is going to be able to do,” Park said.
One of Pattern’s brand partners in the health supplement space has found major success with the ISP feature, repurposing $147k in ad spend and protecting $275k in organic sales in just the past six month. This brand was able to repurpose $10k in ad spend for their liquid vitamin D3 product alone through the implementation of these optimizations.
Part of what makes Predict—and a Pattern partnership at large—so valuable for brands is that Pattern manages both the inventory side of your business and the advertising side of your business, making the sales process far more efficient.
“No other ad tech has as much insight into that whole pipeline as we do,” Morales said.
Advertising and inventory optimization isn’t the only thing Predict can do. This comprehensive ecommerce tool helps Pattern’s brand partners manage every facet of their business. Predict can show brands if they’re winning the Buy Box, which competitors in the marketplace are selling their products, where price erosion is happening, how they can improve their customer experience, and much more.
To learn more about Predict or learn more about a partnership with Pattern, schedule a demo today!
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Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.
In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.
From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.
According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.
From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.
It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.
A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.
Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.
The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)
Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.
Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.
Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.
Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.
Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.