Amazon Selling Trends 2024: Do’s & Don’ts for Sellers
At the end of each year, the online seller community shares its experience in webinars, forums and blog articles to review current trends and developments in regard to Amazon and e-commerce. This year has been particularly exciting for everyone. The ongoing AI revolution is already showing significant impacts on the retail industry, and in 2024, marketplace sellers can look forward to many innovations that will profoundly change their daily work.
While Artificial Intelligence dominated discussions last year, changes are also emerging in other areas that Amazon sellers should not miss. Niche markets, social commerce, new advertising formats, and ultrafast delivery may not have the same broad societal impact, but they do play a crucial role in customer acquisition and experience.
E-Commerce Trends: What to Look Forward to in 2024
Let’s take a closer look at what 2024 holds in store for us in regard to e-commerce trends and set out some best practices for Amazon sellers to make the most out of this year
#1 Microbrands and Niche Markets
The high competitive pressure on Amazon has been sufficiently described not only by us. As a platform, Amazon is a hub for hundreds of millions of customers worldwide – this in turn attracts a large number of manufacturers, brand owners, and sellers. Over the last few years, the intense competition has increasingly led sellers to redirect their focus from reselling to private label. Many Amazon sellers who started with wholesale have built up a well-diversified portfolio in the meantime that includes both their own brands and wholesale products.
Looking towards 2024, many experts expect a continuation of this development. Presumably, Amazon sellers will put more effort into entering niche markets in which the competition is not as fierce as it is in already established markets. There are several noteworthy advantages in doing so:
However, we don’t suggest that sellers blindly jump on this bandwagon and hope for the best. The key to success here is not mass-produced goods but a high level of knowledge about the customer needs of the target audience and product development aligned with it. The more “niche” the market, the more specific the product requirements.
The Retail Sector Embraces Amazon
2024 is also the year for retailers on Amazon. A little while ago various luxury brands like Dior or Chanel opened official Amazon stores. In addition, the e-commerce platform is striving to establish itself in luxury retail, introducing the “Luxury Stores.” Although they are not performing as well as Amazon had envisioned, it seems that shoppers enjoy buying their luxury articles in a non-online environment.
Nevertheless, this Amazon trend will primarily affect the big players in retail. We will see in the next few years whether this business model is profitable and if the broader retail sector follows suit. Interestingly, both major retail brands and small startup sellers benefit from Amazon’s logistics network.
This shift may not be particularly favorable for traditional online retailers. In certain segments, competition is expected to intensify, leading to increased advertising expenses. Monitoring the situation and optimizing your own processes and listings constantly has never been as important as it is now. AI can save you a lot of time in this regard.
#2 Augmented and Virtual Reality, AI
It was one of the main topics, if not the main topic in 2023. The subject of VR, AR, and AI will continue to engage us in 2024. Developments in this field have picked up at such a high pace that it is challenging to make reasonably secure predictions. However, it is certain that this trend is here to stay and has the potential to revolutionize e-commerce.
Listing Optimization With Large Language Models and Co.
The audience-specific optimization of product listings on Amazon is not rocket science, but definitely a science in itself. What is placed and where on the product detail page is not only crucial for the conversion rate, ultimately impacting revenue and profit, but also influences many other aspects of an Amazon business, such as the return rate or the number of customer inquiries.
With the introduction of Large Language Models like ChatGPT, the creation of such listings has not only become more straightforward for many sellers but has also been significantly reduced in time. Tools immediately emerged that provide a user interface based on ChatGPT, DALL-E, or Midjourney to generate text and visual material in seconds.
There is only one answer to whether online retailers should use such tools: a definite yes.
Can such tools completely replace human judgment? They certainly can’t. AI generated content must be carefully controlled and adapted for two reasons – to achieve an engaging result and not produce the same mediocre content as everyone else, and also to ensure that it complies with legal requirements. ChatGPT and similar tools should only be used as idea generators and sources of inspiration but never provide the final result.
AI Tools for Inventory Management, Customer Service and Personalized Shopping Experiences
What applies to listings also applies to all other areas of Amazon and e-commerce. AI is bound to reach all areas of online retail. However, it is especially areas such as inventory management, customer service and personalized shopping experiences that will increasingly be complemented or even replaced by AI. Chatbots are one example. Many customers have not had particularly positive associations with support bots in the past, mainly because issues like lack of understanding, repetitive responses, or unhelpful information were not uncommon.
This will change in 2024. With Large Language Models, there is now the possibility to engage in quasi-natural interactions with chatbots and train them to classify and solve routine tasks in support independently.
This relief in customer service will free up resources to address individual customer inquiries and needs. However, the financial means to develop proprietary solutions are mostly available to larger retailers, while smaller ones may have to rely more on “off-the-shelf” third-party software.
Augmented and Virtual Reality
There is indeed a possibility that the biggest potential for e-commerce in 2024 and the coming years will be Virtual and Augmented Reality. This could largely solve a problem that has always distinguished online shopping from brick-and-mortar retail: the ability to touch, try on, and interact.
How cool would it be if, in the future, customers could try on clothing in a virtual space? If the vase could be lifted, rotated, and closely examined? If the features of a smartwatch could be clicked through on the wrist?
It still sounds like science fiction, but then again, so did drones delivering your packages 15 years ago. Sellers would do well to keep a close eye on the developments in that area so as not to fall behind the competition.
Voice Commerce
It began with Siri, and it won’t end with Alexa. The previously quite limited applications of voice assistants are likely to expand significantly in 2024. Large Language Models open the door to an entirely new world here as well. However, it is currently difficult to assess in which direction smart speakers will evolve and what conclusions sellers should draw from it.
In the future, everyday speech and colloquial language could play a more significant role. Customers’ search queries, especially those with clear ideas about a product, will likely become longer and more detailed. Therefore, marketplace sellers should consider describing their product details and representations more comprehensively.
#3 Social Media and Influencer Marketing
In the sector of social media and influencer marketing, three major topics will be important for Amazon sellers in 2024: Social Commerce, Amazon Live, and Amazon Inspire.
Social Commerce
With TikTok Shop, Amazon has gained a competitor – and as we all know, competition is one of the main drivers for innovation. 2024 is expected to be particularly exciting to see how these two platforms push each other with new and innovative features. The pressure is already showing its first effects: Amazon and Meta have entered into a partnership enabling in-app purchases on Facebook and Instagram. While Amazon Live started a few years ago, emphasizing video and images, the relatively new Amazon Inspire aims to establish its own social commerce channel on the e-commerce giant’s platform.
What is Amazon Live and Amazon Inspire?
Amazon Live is a platform where products are showcased in live streams by real people. Both Amazon itself and influencers or brands can produce videos. It also features a chat function for direct interaction with potential customers, allowing, for example, the answering of questions. Additionally, advertising, such as sponsoring videos, is possible.
Amazon Inspire is integrated directly into the Amazon app. In a feed, products are presented through videos and images, and they can be accessed, reviews viewed, and added to the shopping cart with a simple click.
All these innovations indicate that in the future, brands will increasingly be tasked with the development and implementation of sales strategies for Amazon-external channels, especially for social media platforms.
The End of Third-Party-Cookies
It was already announced years ago, but now it seems like there is actually something happening: After Apple introduced a feature allowing users to block third-party cookies on iPhones, Google is now testing similar features in the Chrome browser. In 2024, it will be crucial how well Amazon sellers can adapt to these developments, especially when running omnichannel campaigns. The measurability and the subsequent decision to invest more in a particular channel still need to be tested and implemented.
First-Party Data – information that companies collect about their own users, customers and partners – will consequently gain importance. For Amazon sellers, this can also be an opportunity, as they have access to one of the largest datasets in e-commerce. Strategic partnerships like the one between Amazon and Meta only show that the big players in the industry are starting to combine their advantages. However, this new advertising landscape must be tested by each online seller and in regard to the specific situation. What has been considered upper funnel so far could gain importance in the future and generate higher conversion rates.
#4 Ads on and With Amazon
The end of cookies and the developments in social commerce go hand in hand with new horizons opening up in Amazon advertising. Not only will new formats be introduced in 2024, but merchants also need to fundamentally rethink their strategies and channels.
Check, Test, Experiment
New territory naturally comes with short-term additional expenses. However, those unwilling to accept setbacks for long-term success are likely to fall behind quite quickly. Therefore, sellers should consider whether to allocate an additional budget alongside their marketing budget for these undertakings .
These financial resources should be specifically used for tests and experiments. Only after new formats or channels have been thoroughly examined and proven to be promising can they be integrated into the advertising strategy.
Sponsored TV Ads and Streaming TV Placements
In recent years, Amazon has progressively expanded and professionalized its advertising platform, both for formats within and outside the Amazon ecosystem. For example, since October 2023, Sponsored Product Ads can be displayed on third-party sites. The options in streaming TV have been significantly expanded since the end of 2023, and in 2024, advertising opportunities in Prime Video will be possible.
For sellers, these developments bring both good and bad tidings. On the positive side, their opportunities to showcase, promote, and sell products are expanding. On the downside, the rise of Social Commerce, First-Party Data, and new advertising formats will lead to increased competition. In 2024, virtually every advertiser will need to assess how the sophisticated target audience segmentation within DSP, the extensive reach of streaming and Fire TV, and the analytical tools of the Amazon Marketing Cloud can support their respective brands.
#5 Quick Commerce / Ultrafast Delivery
Quick Commerce, or Q-Commerce, promises the delivery of products within hours or even minutes. Ordered online, delivered quickly. This trend is well-known, particularly in the realm of groceries, beverages, and household items. In 2024, this trend could potentially expand to encompass the broader e-commerce landscape. Jeff Bezos has this to say about it:
“It’s impossible to imagine a future 10 years from now where a customer comes up and says, “I love Amazon; I just wish you’d deliver a little more slowly.”
Jeff Bezos
Founder of Amazon
Ultra-fast delivery of less than a day will continue to be an aspiration that Amazon intends to implement in the future. However, not only does the customer benefit from this: the faster an order arrives, the greater the excitement and joy over the purchase, and the more unlikely it is that a customer returns the product.
This is likely to pose challenges, especially for FBM (Fulfillment by Merchant) sellers and online retailers with their own shops. Nevertheless, competing with industry giants like Amazon with one’s own logistics and limited resources remains a challenge in the coming years. It should be carefully considered whether at least some fast-moving products could benefit from increased sales through Amazon FBA (Fulfillment by Amazon).
Image credits in the order of appearance: © Andrii Yalanskyi – stock.adobe.com, © Kaleb – stock.adobe.com, © somchai20162516 – stock.adobe.com, © sizsus – stock.adobe.com, © Michal – stock.adobe.com, © Tetiana – stock.adobe.com
