There’s no greater threat to toy brand loyalty than a parent’s fear of disappointing their child on Christmas morning. With news coverage of empty store shelves fanning the flames of anxiety, we see that fear taking hold and spiking consumer demand (and consumer flexibility) when it comes to toys, driving record online sales for brands and marketplace sellers.
While store shelves may be picked over, Quartile’s November data shows that spiking demand extended to Amazon, as well. Year-over-year figures from November 2020 to November 2021 tell an obvious story of massive sales growth for products within the toy sector: Conversion rate -- the ultimate metric for gauging demand -- increased 42.2%. With record numbers of shoppers heading online, advertisers are seeing dropping acquisition costs and increased return on investment: cost-per-acquisition (CPA) was down 40.5%, advertising as a cost of sale (ACoS) was down 29.8%. In comparison, return on ad spend (ROAS) was up 42.3%.
Demand-driven scarcity is a huge opportunity
Scarcity may hinder those hunting down the most sought-after games and toys, but opportunity abounds for savvy brands and sellers.
With supply challenges affecting every market, McKinsey released a report in November revealing that among the 60% of consumers who faced out-of-stock products in the last three months, only 13% waited while 70% switched retailers and or brands. While McKinsey focused on addressing the challenge of maintaining customer loyalty in this environment, our team at Quartile can highlight the opportunity for brands and sellers looking to connect the utterly pragmatic consumer with items they want to buy -- or the closest alternative.
Take advantage of disloyalty
There is an upside to consumer disloyalty. Brands and sellers can capitalize on flexible shoppers with timely and well-placed ads. Quartile's platform automatically updates your bid strategies based on hourly conversion data direct from our largest partners, including Amazon Advertising (including Sponsored Brand, Sponsored Product, and Amazon DSP). Our sophisticated machine learning technology will predict when your shoppers are most likely to buy, ensuring your ads at show up at key periods in the purchase journey.
To capitalize on this disloyalty, here are three tips for managing your ad campaigns:
- Increase ad budget to meet cheap and unmet demand
- Track ACoS like a hawk and double down when it goes down
- Embrace Artificial Intelligence to help discover new keywords and expand your reach
All signs point to a massive opportunity for toys and games merchants to increase ad spending to capture more organic demand with advertising attributed sales. These tips aren’t just for toy sellers but providers of anything that can be placed under a Christmas tree or worn out to celebrate New Year’s Eve. Time is of the essence, and enterprising Amazon sellers need to pounce. As our CEO Daniel Knijnik always likes to say, “If you can’t make money in 4Q, when can you?”