Impact of the Ukraine war & offline store closures

Various online marketplaces have already responded to the military conflict, each with different measures. Against this backdrop, we conducted an analysis of the impact of the war on search behavior on Amazon in Germany over the past few days. The result: not only companies are unsettled about the current situation, but increasingly consumers as well.

But there has also been positive news in the past two weeks: for example, the digital display advertising market in Germany grew by more than one billion euros last year. In this regard, Amazon also offers a solution with its Demand Side Platform (DSP) that still holds great potential for advertisers. Sponsored Ads are also becoming increasingly popular on the platform – more on this in today’s commentary further down in this newsletter.

Besides its digital marketplace and advertising business, things are apparently not all good for Amazon though: the group is closing a significant number of its various brick-and-mortar stores. Meanwhile, new competition is emerging in online fashion retail: H&M is opening its own marketplace, which will also allow other brands to sell their products.

New Blog Post

Analysis: Impact of the Ukraine War on Search Behavior on Amazon

by Hannes Detjen
published on remazing.eu at March 16, 2022
Read now

Updates: Amazon

Amazon to close 68 offline stores

Amazon has announced it will close the majority of its brick-and-mortar stores in the US and UK – this includes all 4-Star, Amazon Books and pop-up stores. The dates for the store closures are location-specific. Employees that are affected by this decision will move on to new roles within Amazon or receive a severance should they choose to leave the company. One type of brick-and-mortar stores will be prioritized moving forward though: Amazon plans to focus even more on its offline grocery businesses Amazon Fresh, Amazon Go and Whole Foods.

Amazon acquires e-commerce software provider Veeqo

As it has now become known, Amazon acquired Veeqo in November last year. The Welsh startup offers merchants software solutions for managing their e-commerce activities across multiple platforms and could therefore be integrated into Amazon’s multi-channel fulfillment program. With this program, Amazon offers businesses a logistics and shipping service regardless of which marketplaces they sell their goods on.

Amazon.com: Sponsored search results on the rise

According to Marketplace Pulse, only four of the first 20 search results on amazon.com are organic. Since few customers click beyond the first page of search results, advertising is becoming increasingly important for merchants. On Amazon’s German marketplace, however, the ratio between organic and paid ads still seems to be more balanced – even though the highest rankings are now also taken by sponsored ads.

Updates: E-Commerce

Online marketplaces react to war in Ukraine

Since the beginning of the Russian military attack on Ukraine three weeks ago, major online marketplaces have reacted to the situation: Amazon has stopped deliveries of goods to customers in Russia and Belarus and is no longer accepting new merchants from the two countries. It is also geographically blocking its Amazon Prime Video streaming service. Ebay said it is introducing measures to support sellers on its platform that are affected by the war. Additionally, both online marketplaces removed products that support Vladimir Putin and the Russian military.

H&M opens own online marketplaces

Fashion retailer H&M has announced that it will open an online marketplace under the name “H&M with friends”. In addition to its own collections, the assortment will initially include another 15 women’s and 13 men’s clothing brands. The collections are supposed to be designed in a “nostalgic style” and are intended to appeal primarily to “Generation Z”. The popular clothing chain from Sweden said it would handle the shipping of the products by third-party brands separately from its own ones.

Germany’s digital display advertising market is growing

According to figures from Online-Vermarkterkreis (OVK), the digital display advertising market in Germany grew by 24.7% in 2021, reaching a total of €5.12 billion in ad revenue. The main driver of this development was once again the COVID-19 pandemic, but the trend is expected to also continue independently of this: A further market growth of 11.8% is forecast for 2022. After Google and Facebook, Amazon is currently the third-largest digital advertising platform – with lots of growth potential left thanks to the development of Amazon DSP.

Drastic online shopping reform in the UK

As of this week, new security rules, known as “Strong Customer Authentication” (SCA), have come into effect for online retail in the UK. To curb increased online shopping fraud, shoppers must now identify themselves using at least two of three available options: Fingerprint or facial recognition, a password or code, and a smartphone. According to an initial research, over 40% of online stores have not yet adapted to the new guidelines.

What caught our attention

For Sellers, the product description on the product detail page is hidden as soon as A+ content is live. This now seems to increasingly apply to Vendors of some categories as well: So far, we could observe this in various household categories. According to Amazon, this serves to create a better structured PDP and avoid duplicate content.

Sponsored Advertising has become available on the Turkish Amazon marketplace last week. Advertisers in Turkey can now create Sponsored Product and Sponsored Brand campaigns as well as Brand Stores.

Amazon has released its annual calendar of deal events for sellers in 2022. It provides an overview of the current year’s category-specific deal weeks. However, the exact dates for Prime Day and Black Friday have not yet been set.

Comment: Ads replace organic search results.

by Joshua Brzynczek, Senior E-Commerce Consultant

We recently read in an article on Marketplace Pulse that Amazon occupies more and more space on the search results pages with paid slots. Accordingly, only four of the first 20 search results still show organic, non-advertised products on amazon.com in the US. Are we seeing this trend in Europe as well?

For now, we can say: Not (yet) to this extent.What is noticeable, however, is that more and more “non-organic” modules are being added also on amazon.co.uk (i.e. Sponsored Ads). These include, for example, Sponsored Brand Video Ads or the new “highly rated” module, in which particularly well and frequently rated products appear if they are also advertised. Of course, there are also parts of the search results page that cannot be controlled directly via Amazon’s Advertising Console, such as “Recommendations from our partners” or “Amazon’s Choice”.
In general, we can confirm that Amazon is always offering new advertising options and advertising spaces, which is pushing organic rankings down step by step. This illustrates how important it has become to remain proactive by investing in Sponsored Ads to remain visible “above the fold” at all. Advertising on Amazon is no longer just a “nice-to-have”, but a “must-have”.
Sellers on the platform are also noticing this development, which is why ad spaces on Amazon are becoming more and more competitive. This in turn leads to strongly increasing CPCs in basically all product categories – an adaptation of one’s own strategy is therefore essential.

Remdash: Image Case Upload

With Remdash, cases for images can now be uploaded automatically:

• Daily comparison of target images with Amazon images
• Display of the differences
• Upload of images as a case with just a few clicks
• Monitoring of the case directly in Remdash

Interested in Remdash? Just click here and arrange a personal product demo with our team.

Top 5 Amazon Keywords

While online shoppers in the US have been preparing for St. Patrick’s Day, searches in Italy and Spain were primarily for Father’s Day gifts. In the UK, on the other hand, Mother’s Day gifts were high up on the list of search terms. In Spain and Germany, Amazon users increasingly searched for cooking oil, which can be interpreted as a direct consequence of the war in Ukraine. Sunflower oil in particular was in high demand.