The Grocery & Gourmet Foods category on Amazon is becoming more and more appealing. Statista research shows that sales of food and beverage items on Amazon are likely to rise from $8.69 billion in 2016 to $23.26 billion in 2021. On top of that, Amazon seems bent on challenging the traditional brick-and-mortar grocery store industry with all of its logistical might. Consider this: research from Cowen & Co shows that of all food and beverages sold online in 2015, Amazon already controls 22 percent of the market.
With 50 million Prime members in the U.S. alone, there is already massive opportunity for brands who want to get in on the ground level of this growth. As we explained in a previous post, selling any kind of food product on Amazon can be a difficult task. However it is certainly not an impossible one.
One of the most challenging tasks of selling in the Grocery & Gourmet Foods category on Amazon is figuring out how to deal with strong seasonal fluctuations in sales volumes and strong competition. However, once you’ve optimized your strategy and Amazon pay-per-click (PPC) campaigns, the rest should come with relative ease.
1. The clearest path to success: researching your target market
Whether you’ve been selling in this category for a while now or you’re completely new to it, you should start by doing due diligence in researching the nuances of your target market and the spending patterns of your customers. You need to understand where you’ll see your pre-holiday spikes and off-season cooling periods to be able to optimize your inventory level throughout the year.
One of our clients, selling chocolate products on Amazon, sees a rapid flux in sales volume around Valentine’s Day and other holidays. We’ve worked closely with them to optimize their inventory ahead, during, and after these types of high-volume events, and you should begin your Amazon PPC efforts by doing the same.
Ask yourself what holidays, one-off events, or even days of the week could influence your sales. These events represent both a concern and an opportunity for food brands on Amazon. Let’s look at the best-case scenario: when you know when the rushes are, you can integrate these into your selling strategy and create PPC campaigns around them to create the strongest boost to your bottom line. On the other hand, when you’re ignorant of these opportunities, you can get caught off guard. If you don’t have enough inventory on hand during the rushes, customers will likely go elsewhere unless your brand has significant clout.
2. Optimizing your gourmet food listings
All of this planning and optimization should happen before you even start to think about participating in a single PPC campaign. Once you’re ready, there are some nuances to each step that are worth examining in detail in order to ensure you’re doing them right.
These are, by quite a distance, the most critical aspect of your overall copy optimization strategy. Amazon offers a number of excellent, effective recommendations that you should follow—don’t make the title too long, and make sure it’s easily readable. Generally speaking, it’s better to lean informational over promotional, as the latter can turn potential customers away. If you have strong brand recognition, adding your brand’s name to the end will pay dividends as well.
When selling food on Amazon, top-notch photography is essential. Because the appearance of food is so linked to people's expectations of how it will taste, you need to make the most of your listing's visual element. Hiring a professional photographer is the best option here—a smartphone snapshot in a conference room simply isn’t going to cut it. Much like well-written copy appeals to the Amazon algorithm, good photography appeals to the buyers who happen to be on the fence. Good photography is not only a plus, but it is part of a winning strategy on Amazon. Learn more about optimizing your product images for Amazon, here.
Even though Amazon allows you to enter 5,000 characters of backend keywords, don’t feel as though you need to fill that entire space. It’s more important to keep the backend keywords relevant and clean rather than wide-ranging and irrelevant. If 200 to 500 characters is enough to describe your product in detail, that’s great.
Also, if you think your product could be competitive on some other loosely related terms, make sure to test those via manual campaigns (rather than automatic ones). This way, you will have far greater control—but more on those in a moment.
Download our Amazon Food Category White Paper for a list of the documents Amazon will request, along with some tips to help you get through the process.
3. Getting the PPC campaigns started
Once you’ve optimized your listings as best you can with top-notch copy and photography, you’re ready to start PPC campaigning on Amazon and get more eyes on your listing. If you research your particular niche thoroughly, you should find that setting up your PPC campaigns is markedly easier than if you simply jumped in head first.
A) Your first priority is keyword research.
There are third-party tools that can help for keyword research, but they’re only useful as a starting point. They pull data from Google, Bing, and other search engines, not Amazon itself.
The only way to find actual Amazon search query data is through the Customer Search Term Report. You will find it under the Advertising Reports tab. Make sure you schedule this report to run weekly as soon as you set up your campaigns. This way you’re ensuring you’re always working with the latest data.
B) The next step will be accessing automatic and manual campaigns through Seller Central.
Here at Bobsled Marketing, we recommend that most brands begin with automatic campaigns. In an automatic PPC campaign, Amazon uses the copy you developed in the product listing, in addition to the backend keywords, to focus its algorithm and display your ads when customers make relevant searches. If you’ve set up your listing and your keywords right, Amazon will know exactly what your product is and will display it appropriately in response to customer searches rather than rotating your product through different listings. This saves you time and money because you won’t have to keep going back and adding negative keywords to try to influence when your ad does or does not get displayed.
Once you’ve found value in automatic campaigns, you can move on to manual ones, which offer more flexibility, albeit with additional complexity. We recommend creating three different groups—your “cash cows,” your “shooting stars,” and your “experimental” campaigns—to make sure you hit all your bases. We recommend that you create these campaigns in parallel with your automatic ones.
1. With your “cash cow” campaigns, you should use highly relevant short-tail, relevant terms on a broad match type and low bids.
This will help give you a feel for the market conditions of your particular niche, and keeping the bids low will enable you to harvest more keywords. Cash cow campaigns are meant to keep the house running over the long term, and you should gradually expand them with converting terms you discover in the weekly Search Terms Report. On top of that, you will find value in adding different match times (such as phrase and exact) on these broad, converting terms.
2. With your “shooting star” campaigns, you should aim to capitalize on certain market conditions that will cause a large increase in demand, such as Christmas, Valentine’s Day, or Halloween.
You should start these campaigns at least four weeks before the holiday itself and use keywords that are specifically targeted toward that holiday. If you start early, you’ll have time to test what keywords convert using low bids. This, in turn, will let you better establish your campaign once demand picks up. These campaigns require constant monitoring, and it’s important to remember that bids are not static—they will need to be increased as the key date approaches. If you’ve done your homework, you will know which keywords to emphasize with these raised bids.
3. Experimental manual campaigns are for keywords that are not directly related to your product but that you believe could be competitive.
For example, a brand that sells spices could create a campaign around keywords for housewarming gifts. You shouldn’t have high expectations for conversions from these campaigns; however, you can learn a lot from them. As you’re testing the competitiveness of those unrelated keywords, always make sure you take the time to analyze the results and record data that will help you create much more comprehensive campaigns in the future.
The golden rule of running PPC campaigns on Amazon: be conservative with your spending
Regardless of the type of campaign you’re working on, or whether you’re running a number of automatic and manual campaigns in parallel, remember to be conservative with your spending. Start slow and increase your commitment gradually. Update your campaigns frequently with new information from your weekly Search Term Report. And most importantly, stick to decisions that are based on the data, not your emotions. This difference is crucial to elevating your brand’s presence and sales through Amazon’s PPC platform.
Under-optimized PPC campaigns will cost you money and growth opportunities. We can fix that.
Brands that sell on Amazon are always looking for better ways to increase their reach and traction with cost-effective advertising campaigns that help facilitate growth week to week. There are many strategies for improving your PPC campaign performance, and if you’re interested in getting more bang for your buck, we at Bobsled Marketing can help. Request an appointment with us today.