Tradeswell Research: What’s the Best Promotion Strategy on Amazon?

This article is part of our Tradeswell Research series. We’re sharing findings from our data and research and turning them into actionable insights that ecommerce brands can use to make better business decisions that drive profit and enhance the customer experience.

With the inflation rate being the highest it’s been in decades, the Tradeswell Research team looked into how many shoppers are taking advantage of coupons and subscribe & save options on Amazon.

In this week’s article, we uncover the connection between item price and the share of total sales by coupon and subscribe & save sales on Amazon to help you optimize your ecommerce promotion strategy.

Has inflation caused an increase in bargain hunting?

When the inflation rate reached 8.5% at the end of March, we started wondering:

  • How many more shoppers are bargain hunting due to the high inflation rate? 
  • Has there been an increase in bargain hunting throughout the pandemic? 
  • At what item price range do people seek the most savings?

The results surprised us.Amazon quarterly promotional share of total sales by type

Based on data from the Tradeswell platform, subscribe & save sales have remained relatively the same since the pandemic began. We expected to see a spike in 2020 and possibly a dip in 2022, but subscribe & save had a relatively slow increase over the last two years at a .5% to 1% growth rate.

(Am I the only one that started subscribing to toothpaste, dog food, and fridge water filters at the start of the pandemic? Only one? OK.)

However, we found that coupon sales’ share of total sales has been growing over the last two years — 2.5% in Q2 2020, 3.8% in Q1 2022, and 4.8% in Q2 2022 as of April. This finding tells us that more shoppers are, in fact, taking advantage of deals.

When looking at coupon sales based on item price, we found that items in the $75 to $100 price range on Amazon have the highest share of sales attributed to coupon sales at 5.5% in Q2 2022. 

Amazon Change in Coupon Share of- Sales YoY by Item Price Range SQ 2

Products in the $25 to $49 price range have seen the most significant increase in share of sales going to coupon sales with a 1.6% difference in share from 2020 to 2022. 

Products in the $50 to $74 price range have seen a similar increase with a 1.4% difference in coupon share of total sales from 2020 to 2022.

Amazon Difference in Average Coupon Share -of Sales YoY by Item Price Range

What does this mean for your Amazon promotion strategy?

It’s no surprise that shoppers look for deals on items at higher price points on Amazon. Especially when buying something on the pricier side, people often turn to Amazon to find the best deal. 

However, the insights indicate that an increasing number of shoppers are seeking coupons at the mid-level price range of products and that brands have increased the number of coupon deals they are offering. This is likely due to an effort on the part of ecommerce brands to maintain consumer demand while balancing shoppers' desire to save money due to rising inflation rates.

We recommend that ecommerce brands experiment with running coupon campaigns on Amazon to attract and retain customers, especially for products in the $25 to $100 price range. However, keep a close eye on your margins. If your costs are rising in tandem with inflation, then consider leveraging shorter term offers to reduce the impact on your margins.

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