Editor's Note: This is part of a larger series of data-sourced blog posts around the coronavirus. If there are other trends you want us to look into, shoot us a line at news@zentail.com or submit a topic request and we’ll do our best to dig into what’s going on behind the scenes for you!
Every Amazon seller knows the importance of their feedback score. It's a core ingredient to success on Amazon, where most buy box winners have 99% positive feedback.
The same holds true today, even as the COVID-19 coronavirus shakes up the playing field. But over the last few weeks, we started to wonder...are shipping delays hurting feedback scores? Are buyers applauding sellers who are still able to sell and ship the products that they need? Are buyers leaving more reviews than usual? Are they being nicer?
To find answers to these questions, we analyzed data across 250,000 third-party (3P) Amazon merchants between February and March. We wanted to see how Amazon 3P merchants were fairing in this uncertain climate by looking at their 30-day feedback scores. To get even more granular, we looked at this data through several different lens, pivoted by:
- Total number of feedback
- Number of brands sold
- Number of SKUs
Below are our findings.
A Slow-Down in 30-Day Feedback Suggests a Slow-Down in Amazon Sales
Our first analysis looked at Amazon merchants grouped into tiered batches (or cohorts) according to the total amount of 30-day feedback they had in February. We compared this to their total count at the end of March to calculate the rate of change. Merchants in our study had at least 10 total reviews in March.
Across the board, businesses seem to be receiving less feedback than before. All cohorts were down between 13-16% from February to March. Smaller merchants (merchants with less than a 100 reviews to begin with) saw 23% less activity than larger merchants (-16% vs. -13%).
But the overwhelming takeaway is that it has been a quiet period for most sellers in terms of feedback. And if you assume that an increase in feedback usually means an increase in sales—sales, overall, seem to be taking a hard hit too.
While we normally see sales rise as much as 20% MoM between February and March following a post-holiday lull, this inverse sales trend screams that there are larger issues at hand.
Read Also: Coronavirus and Inventory Planning: Why Traditional Models Are Failing
Resellers See More Activity Than Brands
Our second analysis looked at 30-day feedback trends across sellers with wildly different catalogs. On one end of the spectrum, there are brands like Dyson that only sell their branded products. On the other end of the spectrum are resellers who sell dozens, if not hundreds, of different brands in their catalog.
Our assumption was that brands would see much more returning customers than resellers and therefore receive more feedback. The data disproved our theory, as you'll see below.
To note: Brands mostly fall under the cohort with just ‘1’ brand, though there are a surprising number of brands on Amazon who sell under several different variations of their name which may have slightly skewed the data (think: ‘Nike’ and ‘Nike, Inc.’).
Merchants with fewer brands in their catalogs saw less feedback activity.
This could speak to the fact that brand diversification often results in a lower variance in trends. While certain brands are seeing a flurry of new sales (and setting new records) amid the coronavirus crisis, others are experiencing a weak month. Some sellers are able to ride out the weakened demand for certain products by way of having a diverse catalog, and continuing to receive orders on other items within their catalog.
During this pandemic, we've also seen shopping behaviors shift. Traditionally popular ecommerce categories (like electronics, clothing, jewelry and beauty) are getting overshadowed by outdoor products, health products, pet supplies and other essentials. This has shifted the spotlight away from normally-sought after brands to retailers with large assortments of products. Brand seems less important than the product itself—giving retailers a bigger opportunity to service their needs.
Customers Are (Still) Satisfied
Lastly, we were curious to know if seller feedback reflected any change in customer satisfaction, especially as Amazon Prime is experiencing delays and sellers are impacted by statewide lockdowns.
As it turns out, nothing has really changed between February and March. Actually, customer feedback is ever so slightly more positive than before. (This is, again, based on the 30-day feedback scores of merchants who had more than 10 reviews at the end of February.) This is a good sign for Amazon; customers aren’t losing faith in the platform (or its 3P merchants), despite the delays, price increases and limited assortment.
It also coincides with what sellers have been reporting to us: "customers are genuinely nice right now...It’s actually more of a pleasure to deal with them now than before because they’re very understanding."
Conclusion
There are a couple of things that stuck with us after we complete our research.
- Merchants with more diversified catalogs are better positioned to weather this pandemic (similar to how merchants who sell across multiple sales channel are fairing better than single-channel merchants.)
- Customers have been overall satisfied with their Amazon experiences from February to March.
We’ll see if anything changes over the next month as new factors arise. It'll be interesting, for example, to see how Amazon warehouse strikes or new shelter-in-place mandates impact fulfillment. We'll keep our eyes on it.
In the meantime, let us know if you’d like to collaborate with us on a data project or have any topic requests for us.
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