Fashion summer sale event in June and the closing of Amazon Pantry

The lack of Prime Day, coupled with the coronavirus situation, meant hard times for fashion brands. With its summer sale event on June 22, Amazon will try to compensate the losses in the fashion category. There are many rumours about when Amazon Prime Day will be this year, however we still cannot make an exact statement. Read our comment on the closing of Amazon Pantry in Europe and find out why more customers raised their voices against third party sellers below.

General Updates

Amazon plans fashion summer sale event for June 22

Amazon notified sellers early Tuesday that it will host a “summer sale” on June 22. An Amazon spokesperson confirmed to CNBC that the event will take place in late June and that it will include deals from “both established and smaller fashion brands”. (June 2, 2020)

Amazon discontinues Amazon Pantry for European marketplaces

While many online grocery businesses are taking off during the Covid-19 crisis, Amazon is discontinuing its own Pantry service. Amazon Pantry is to be closed down completely by 30 June 2020 in many European countries including Germany. Not to worry though – the e-commerce giant has announced that many of the pantry items will still be available on Amazon outside of the Pantry program. (May 28, 2020)

eBay reports stronger volume growth and raises revenue, EPS expectations for Q2

Amazon competitor eBay’s business is performing significantly better than expected, prompting the company to publish a one-time update including raised revenue, GAAP and Non-GAAP EPS Guidance for the second quarter of 2020. The company added approximately 6 million buyers in April and May and now expects volume growth rates to land between 23% and 26% as compared to the prior year period. (June 4, 2020)

Frustrated Amazon shoppers complain more than ever about 3rd party merchants’ shipping problems

The spike in demand for online shopping has largely benefited Amazon – but not all its customers are happy. Sellers taking over shipping operations amid the Corona crisis has lead to a flood of negative reviews for third-party sellers due to long shipping times, damaged items and lost packages. (May 21, 2020)

Our view on the closing of Amazon Pantry

Imagine Amazon Pantry closes, and no one realizes it
At least that’s the plan when it comes to Amazon and the closure of the prime-only service Amazon Pantry, apparently planned in all EU countries on the 30^th of June. According to a note on the website, the shopping experience without Pantry should be even better, as “most favorite Amazon bestsellers will soon be available on Amazon.co.uk with faster delivery and no minimum spend”. Interesting!
 
But what is Amazon Pantry? 
Amazon Pantry (launched in 2014 in the US, 2015 in DE & UK) is a service exclusively for Prime members. It offers everyday essentials like food and drinks (watch out – not to be confused with Amazon Fresh), household supplies and products for baby and childcare, pets, health and beauty. The idea is to fill up your pantry box to a specific amount (e.g. 20kg) and get free & prime delivery to your home. However, all Amazon pantry items have been available within the core department, just with less appealing quantities and price points. Not sure who regularly purchases 5kg of raw almonds on Amazon?
 
Was it that sudden?
One day you’re working on optimizing PDPs for your Pantry products. The next day you realize the service gets closed. Moments like this are typical if you’re dealing in the Amazon environment, thanks guys! But Amazon already tackled the issue of unappealing packaging sizes for many products by switching from bundles to single product units, with a “minimum order quantity” which at least seemed more enticing at first glance. Sometimes the “new” order minimum quantity was just as high as the bundle size before though. Nevertheless, we see a lot of changes regarding packaging size and it seems logical that Amazon now pushes to make “pantry products” more sellable on Amazon core by finding a solution for low-priced products + not so-low-priced delivery costs.
 
Profitability issues?
There is a reason to suspect that the closure of Amazon Pantry in the EU markets was due to a negative cost-benefit relation. Also, it might have been harder to steer the service on smaller EU markets (compared to the US), as shopping behavior differs a lot, and they were facing different competition in each market. In the US, Amazon Pantry also temporarily paused the service due to too excessive demand during the outbreak of COVID-19.
 
Threat for Amazon Vendors and Sellers?
As always, it depends. Know your Pantry share & bestsellers, and if you are operating internationally, know them per market. Your sell-in on these products will tell you if the closure hurt your business. In case it did, think about bundling your bestselling pantry products proactively to avoid relying on Amazon.

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All the best and stay healthy,

Your Team at Remazing

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