Amazon quietly ditched celebrity promotions to build up Prime Day this year after cuts to marketing spending due to COVID-19 (AMZN)

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Celebrity promotions are noticeably absent at this year’s Prime Day, just a year after Amazon had made a concerted effort to feature them more prominently during its annual shopping event.

That means there’s no Taylor Swift live concert to kick off Prime Day. A separate page titled “Star-Studded Deals” also is gone. Products endorsed by Kobe Bryant, Will Smith, and Mark Wahlberg, to name a few, no longer have prominent placements on Amazon’s marketplace.

The change comes after a major reduction in Amazon’s marketing spend this year, in part to control the COVID-driven spike in orders. After experiencing significant pressure across its supply chain network during the pandemic, Amazon made a series of moves to meet the heightened demand, such as restricting products in its warehouses and extending shipping times for non-essential items.

The elevated demand is expected to continue through the holiday season, possibly negating the need for celebrity promotions intended to create more buzz around exclusive products.

“Given the disruptions we’ve seen from COVID, there are likely fewer bespoke and limited-run products available this year than last, and the overall trend towards unique products is less important when you’re focused on scarcity,” Hilding Anderson, the head of retail strategy at digital consultancy Publicis Sapient, told Business Insider.

Amazon’s focus on celebrity promotions during last year’s Prime Day drew a lot of attention because the company had long been known for preferring customer reviews and word-of-mouth over expensive star endorsements. It was a change in strategy that’s been building up over the last few years. Amazon launched “The Celebrity Store” in 2018, featuring products endorsed by the likes of Serena Williams and Lady Gaga, and started buying ads during the Super Bowl in 2016.

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Amazon’s spokesperson didn’t provide a statement for this article. Instead, the spokesperson pointed to Amazon CFO Brian Olsavsky’s comment during the company’s July earnings call, where he said the company’s marketing costs were lower during the second quarter because of the COVID-driven order increase.

“We cut marketing probably by about a third in [the second quarter] mainly because we were trying to manage demand,” Olsavsky said during the call. “It started to normalize and get back to somewhat normal levels at the end of Q2. And therefore, we’ll see a higher level in Q3.”

Even without the special promotions, this year’s Prime Day is expected to be another record-shattering sales day. Amazon doesn’t disclose exact sales figures for Prime Day, but eMarketer estimates the company will sell $9.9 billion worth of products over the two-day event, a 43% increase from last year.

The celebrity promotions, however, are likely to come back once things settle down, according to Rick Watson, CEO of RMW Commerce Consulting. He said COVID made it unusually difficult to lock in celebrity endorsements this year, given the constantly changing policies and dates for Prime Day, which was pushed back three months. It was also hard to predict inventory and schedule the supply chain, making it almost impossible to …read more

Source:: Businessinsider – Tech


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