How Brands on Amazon Outperformed the Market in the 2021 Holiday Season & What’s in Store for 2022

Christian Umbach

2021 was the best year yet for eCommerce sales - and it will most likely be topped again in 2022. Compared to 2020, eCommerce recorded a plus of 11 percent – and even 61.4 percent compared to 2019. For third-party sellers, these figures are even stronger. After months of lockdowns and Covid-related mandates, stores are finally reopening – yet eCommerce continues to be a key driver for retailers. 

Looking back at 2020 & 2021: Black Friday is the start, not the peak

The Thanksgiving/Cyber Monday weekend has traditionally been the centerpiece of holiday season online shopping. The day after Thanksgiving in the US is just the start of a month-long sales peak. And while overall online sales declined around the Thanksgiving/Cyber Monday period in 2021, for third-party sellers on the Amazon marketplace, it was just the beginning of an acceleration in sales that reached its climax in mid-December. 

Amazon announced record sales, partially driven by independent third-party brands (third-party sellers), and outperformed the market. Overall eCommerce sales fell 1.4 percent in 2021 over the five days between Thanksgiving and Cyber Monday (Adobe Analytics), and from November 30 to December 31, online sales were up 5.6 percent on prior-year levels (CNBC). 

FBA brands top the market

Xapix data across top Fulfilled by Amazon (FBA) brands show a 60 percent increase around Thanksgiving 2021 versus 2021 as a whole. A comparison of the two weeks around Thanksgiving/Cyber Monday against the two weeks in early December shows a peak in December: Quantity sales in the US for top FBA brands are consistently higher in early December around the pre-Christmas period than around Thanksgiving/Cyber Monday

It’s only then, in the run-up to Christmas, that sales take a real nosedive (see Figure 1). This period is marked by a strong decline in sales, which is significantly less than in a “normal” week in some categories. After a huge jump around Thanksgiving/Cyber Monday going into the holiday season, the week of Christmas itself is when demand starts to drop.

Figure 1: Based on quantity sold in the US market. Not only does the quantity of products sold in the US continuously reach its peak in mid-December, there is also a trend toward higher revenues. 

Because many consumers are aware of the supply chain woes due to the pandemic-related regulations and truck driver shortage, shipping started early and was strong at the start of December. In turn, this means consumers were shopping earlier than in the past – causing a stronger reduction in sales closer to Christmas in 2021 compared to 2020 (see Figure 1).  

What the year 2022 holds for the market is still up in the air. But one thing is certain: The effect of Thanksgiving and Cyber Monday will continue to create a buzz in the US and, as a result, on a global scale. 

“What we are seeing across top FBA brands is that Amazon’s marketplace strength helps these brands outperform the retail market but also the eCommerce market as a whole. With the right tactics in place, a top selling FBA brand will see its sales be boosted well beyond Cyber Monday at the end of the year”, Xapix CEO Christian Umbach mentions. Xapix works with brands and eCommerce aggregators to deliver insights into a brand’s momentum using machine learning, analytics, and automations to evaluate and optimize online channel performance across supply chain, marketing, and sales operations. Their machine learning and automation SaaS (software as a service) platform is used by brands to drive better portfolio decisions. 

FBA brand growth flourishes with Amazon platform loyalty

While there are various theories about the current behavior, we believe that Amazon’s dominance is a key driver to the whole market disparity. With more than 150 million Prime members in the US in alone, there is some weight to be placed on this. Prime members’ loyalty would seem to have a strong advantage for third-party sellers. Feedvisor has shown that 48 percent of Prime members bought products at least once a week and 74 percent shop at least every few weeks. 

The strong FBA growth is also deeply rooted in other areas of Amazon’s dominance in the eCommerce market: Amazon continues to dominate product search, not only among Prime customers. 

In addition, as Amazon has excelled in good customer service and reliable delivery estimates, for many shoppers it’s seen as the go-to partner in the era of supply chain struggles. This market presence also helps the third-party sellers on the platform flourish. 

Amazon helps FBA brands reach sizeable sales at scale 

Third-party sellers are those who sell their goods on online marketplace platforms such as eBay or Amazon. According to Amazon, 130,000 third-party sellers on its platform in the US achieved holiday sales of more than 100,000 US dollars each. What’s absolutely amazing is that these sellers sold an average of 11,500 products per minute between Black Friday and Christmas. 

The top categories for sales from Amazon’s third-party sellers include office products, possibly for remote working; cameras; and wine-related products. Amazon supported sales for its third-party sellers by providing a Deal-of-the-Day push or Small Business Gift Guide, just two of the key drivers of holiday sales.