Observations and Thoughts on Amazon in light of COVID-19

Updated: Apr 6, 2020

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Hi everyone,

We wanted to share what we’ve been seeing on the Amazon and eCommerce in the past couple weeks.

Things have been changing very quickly: indeed, many of these updates came in last night or this morning. Nonetheless, we hope that this can provide some helpful context for what we may be seeing in the coming weeks and months in the world of CPG on Amazon.

Please reach out if you have any questions or need any Amazon support – we’re here to be your friendly resource.


Jonathan Willbanks and Chris Moe

Co-founders, Cartograph LLC


What we are seeing

DEMAND – significant spikes for food products

Starting 3/12 we saw a 2-3x spike in daily sales for our food clients. This includes categories such as confection and salty snacks. This has sustained and continued to grow through 3/16.

  • Non-food CPG brands, e.g., skincare and pet, have been flat or slightly negative.

There are two ways to interpret this change in demand:

  • Accelerated demand, or consumers “stocking up”, which implies a subsequent sales trough

  • Changing customer behavior: customers shifting retail buying behavior to eCommerce

We guess a large portion of this current spike is accelerated demand, as consumers are stocking up and reacting to empty grocery store shelves. Nonetheless as more of the nation remains in their homes, we anticipate a shift in customer behavior as fewer customers venture into retail stores.

SUPPLY (and logistics) constrained by increased demand and stresses to workforce

Amazon’s logistics infrastructure is struggling to handle the volume.

Fulfillment Centers (FCs) are very behind on operating metrics: they’re not getting enough packages out to match demand.

Amazon is enforcing mandatory overtime at FCs, though has pledged two weeks of paid sick leave for all workers who need it. We believe staffing levels are low as people are going out sick.

We’re seeing extended receiving times at FCs – 2+ weeks. This will worsen as brands rush to restock after this demand spike.

  • Amazon announced 100,000 new jobs in FCs on 3/16

  • Amazon’s 1-2 day Prime shipping window is frequently showing 4-5+ days, or longer.

  • The last mile delivery network is likely struggling with increased demand and workers out sick

This morning 3/17, Amazon announced it will no longer accept FBA shipments from non-essential categories through 4/5.

  • Essential categories include Grocery, Health and Household (incl. supplements, cleaning products, healthcare items), and Skincare.

  • Vendor Central made a matching notification regarding stopping POs for non-essential categories through 4/5

Similar capacity challenges seem to be impacting other eComm providers, such as Thrive, Instacart, and Curbside Pickup of grocery.

What should grocery / essential category brands do on Amazon right now?

Aggressively replenish inventory now. Take a close look at changes from baseline demand and replenish accordingly. Remember that receiving times are very long right now. If your inventory and balance sheet can support it, now is the time to be bullish on inventory allocation for Amazon.

  • Consider shipping via small parcel rather than LTL, as this can shave up to a week off receiving times.

  • Vendor Central brands are already seeing substantial spikes in PO volume. If POs are too large to fill, ship late – don’t cancel. Both pose potential chargebacks, but a late shipments get inventory in queue ASAP, as well as locks in revenue in the face of near-term uncertainty.

Adjust and possibly increase advertising budgets to take advantage of heightened traffic to Amazon’s grocery categories.

  • Brands should monitor budgets to ensure campaigns aren’t running out of budget and shutting off later in the day.

  • Depending upon your brand goals, this could be a time to pull back on ads and focus on cash generation

Adjust marketing for at-home or emergency use. Consider temporarily emphasizing attributes such as shelf stable, or enjoyable from home, in your listing content (especially titles), images, and even in Sponsored Brand ad copy.

  • Be cautious with claims and price gouging: Amazon is being very strict on overstated claims and opportunistic pricing. Suspensions will likely be very hard to lift.

Our Future Outlook

We are cautiously optimistic for eCommerce in the near term as more people stay at home and retail foot traffic declines. That said, it’s difficult to project what challenges brands will see from second and third-order economic impacts. Additionally, many workers in other impacted industries will likely see declines in disposable income.

During the 2008 financial crisis, organic and natural food and beverage sales increased by double digits. While a recession would affect everyone, people still need to eat, and the embrace of healthy foods is something we don’t foresee customers abandoning.

This situation is evolving rapidly, with new developments every day. Our draft of this document last night looks quite different than it does today. We will continue to provide updates as we see them. Don’t hesitate to reach out to us if you’d like to chat. Stay safe and stay healthy.

Cartograph Leadership Team Chris Moe and Jonathan Willbanks Co-founders, Cartograph

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