COVID-19 marketplace analysis: U.S. Amazon search terms

It is both interesting and essential to investigate how the COVID-19 pandemic has influenced consumer buying. Most Americans began stocking up immediately after the World Health Organization (WHO) declared COVID-19 a pandemic. Consequently, panic buying has led to empty stores. Furthermore, experts suggested government-imposed lockdowns and social distancing have to “flatten the curve.”

With people forced to stay inside, online shopping quickly became a bright hope in a dark hour. Online retailers, it appeared, would emerge as winners. Our analysis of more than a million Amazon keywords showed a different outcome. Not every seller will be a winner; only a few relevant sellers will emerge on top.

Impact of COVID-19 on Amazon search terms

U.S. detected its first case of COVID-19 on Jan. 20, 2020. The Coronavirus case numbers, however, only began to grow rapidly from the second week of March 2020.

If we analyze both the COVID-19 infections and the Amazon search term trends as shown in Fig. 1 we can see:

• When COVID-19 was in its incubation stage during January, electronic products and their accessories were the dominant searches on Amazon: Apple AirPods and AirPod cases dominated sales. Only two health- and sanitation-related products—”N95 masks” and “surgical mask”—made it into the top ten search rankings.
• By the end of February, the top three most searched for products on Amazon all belonged to the health and sanitation categories. However, when we examined the sales conversion ratio, AirPods and iPhone 11 cases still dominated.
• We began to see drastic changes in buyers’ search behaviors in March. Most of the search term changes can be attributed to the increased ratio of Coronavirus patients in the U.S. This increase led to a drastic shift in Amazon search rankings and sales conversions. If we look at the top ten search terms for the month of March, they all belong within the health and sanitation categories.

As mentioned earlier, not every seller will emerge on top. Health- and sanitation-based industries clearly made it to the top of the list. However, categories that consistently held the top spots for years were nowhere to be seen. This explains how people respond to the current health crisis: when facing risky situations, uncertainty or situations that they are unable to control, individuals seize upon what can be controlled. In this case, COVID-19 is the perilous situation that we cannot control. We can, however, prevent infection by modifying and being diligent with our health and hygiene routines. The same buyer response is reflected in buying patterns and is proven by the top Amazon search terms.

Impact of COVID-19 on Amazon product categories

This search terms analysis clearly marked health and sanitation categories as top priorities. This is evident in Figure 2. However, this does not necessarily mean that Amazon is now an unforgiving marketplace for other product categories. Top search terms reflect the most sought-after products by consumers. Not being on the top ten list does not mean that the market no longer holds opportunities for these sellers.

The graph in Fig. 2 can be disheartening to look at if your business falls into categories outside of the health, household and baby care categories. Note, however, that this does not represent the holistic market performance. Instead, it is only a representation of top preferred categories based on Amazon’s top search results.

Now, let us look at the other keywords’ performances, outside the top 10 rankings, for the month of March. (see Fig. 3).  The listed search terms were once some of the most-searched-for items on Amazon. They were, however, wholly flushed out of the top ten in March. Yet when we look at the conversion rates of these search terms/products, we see a different story. Perhaps this data can metaphorically represent the saying, “every dark cloud has a silver lining”—the conversion rate is the silver lining for the sellers who focus on products outside the health and sanitation categories.

Based on our analysis of the top ten search terms and the performance of lesser priority products (situational), we can infer that:

• Once created, market share tends to continue to exist—no matter the market’s condition. One should create and initiate the right strategy to capture that portion of the pie.
• Competition is inevitable—regardless of the market’s condition and the product’s situational priority.                                     

Below are six strategic tactics that will allow sellers to keep up with buyer dynamics and negate the impact of COVID-19 on the market.

1. Identify the competition: Get to know your competitors. This helps keep you one step ahead in the game and provides insight to build counter-strategies. The fact that the number one searched-for item on Amazon (e.g. “hand sanitizer”) was able to gain merely 3.85% of the sales conversion ratio signifies that there is monopolistic competition in the market.
2. Competitive pricing: Identify and take note of any major (or even subtle) changes in your competitor’s pricing. Increasing the prices when you are priced lower and decreasing the price to meet the competition will help you win Amazon Marketplace Buy Box, which can ultimately help you increase that sales conversion rate.
3. Inventory optimization: Inventory maintenance is fundamental in inventory planning. However, a good business always knows how to best utilize its inventory. For example, when restocking or re-ordering is not possible, it is important to decide how to optimize revenue that is based on the limited stocks. When situations are unfavorable, this requires a high level of competitor insight and a robust inventory management system.
4. Optimized product listing ads (PLA): Users are regularly bombarded with hundreds of ads daily; what makes the ad recognizable is the advertisement’s enhanced content. Optimized product listing ads not only increase the click-through rate and increase traffic impressions — they also help to improve the conversion rate.
5. Product data enrichment: When working within Amazon, product data enrichment plays a vital role in product visibility. Buyers tend to attribute the products with the high-quality content. As a result, the image is a solid lead and will attract the attention of prospective buyers. Making use of in-built Amazon features, such as A+ Content Manager, further boosts the performance of your product listings. This can help you get better impressions and build brand awareness.
6. Amazon account health: Account health consists of multi-dimensional facets that are related to your products’ Amazon performance. Good account health not only helps to maintain a better ranking and product visibility, but it also establishes you as a trusted seller on the Amazon platform.

 GrowByData is an artificial intelligence technology provider for retailers and advertising agencies.

Amit Thapa Magar and Sagun Shrestha contributed to this report.

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