amazon fulfilment centre

amazon fulfilment centre

Brands are “very, very nervous” they are headed for a disastrous fourth quarter, as a result of Amazon’s implementation of HFSS restrictions on its UK website.

Sellers across swathes of grocery categories have been requested by Amazon to prove the healthy credentials of every SKU, in order to remove the e-commerce giant’s blanket block on product-boosting activity like appearing higher up in search results and sponsored ads.

For HFSS-compliant products, the temporary block, and the time spent waiting on Amazon to remove it, will take a huge toll, they argue.

“A temporary absence of ad campaigns will alter the short-term visibility of products which can mean an immediate loss of sales,” said Jenny Hodgkinson, head of marketplaces at Amazon agency Tambo, which works with Coca-Cola, Fever-Tree, Caffè Nero, Roam protein snacks and 19 Crimes.

“It also results in reduced glance views and ‘sales velocity’, which negatively impact the relevancy and search result ranking,” she added. “The listing will need to recover before it returns to previous sales levels and, depending on investment and competitor activity, this could be short to mid-term. Another reminder that Amazon is firmly a pay to play platform now.” 

Another issue resulting from Amazon’s move is that brand ad campaigns have been archived rather than paused, meaning they will need to be created again from scratch. Launching new ads requires higher bids within Amazon’s ad opportunity auction system.

“The success of campaigns is closely linked to their staying ‘always on’ and continually gathering data and machine learning that Amazon uses to increase the ad relevancy,” Hodgkinson added. “New campaigns mean higher bids, less impressions and, as a result, slower sales and low ROI. This is the bigger area of concern for brands and, whilst the Amazon ad team have acknowledged this now as a ‘known issue’, it is unclear if there is anything they will be able to do to reverse it.”

Amazon last week told The Grocer it was aware the process put in place around HFSS had fallen short and was working to improve it. A spokesman for the company said it had “erred on the side of caution” but it was making changes to improve how HFSS-compliant products could get approved and return to advertising on the site.

But several Amazon agencies The Grocer spoke to said they had seen no changes or communication from the company.

“The process is the same as anything else Amazon – it’s all self-service,” said Thomas Baker of Amazon marketing agency FordeBaker. “You upload things to the system and you have to just wait and cross your fingers. 

“It seems arbitrary which items are getting approved,” he added. “Advice, if you can get it, from customer support is conflicting, dependent on who you’ve spoken to.” 

A commentor on The Grocer’s exclusive story last week on the “utter shambles” of Amazon’s HFSS restriction rollout claimed the issue was ongoing with “no evidence that this has been fixed yet”. “Amazon have handled this appalingly. As a major snack seller, most of our ads are now suspended,” another posted.

Amazon said the new regulations, which came into force this month, were “obviously a ­difficult one to apply”.

Hodgkinson said: “Despite Amazon’s initial claims to the contrary, they hadn’t handled the rollout well and … our clients hadn’t received any communication about it. 

“Then there were those brands who weren’t expecting to be affected as their product type wouldn’t be classed as ‘less healthy’ under HFSS legislation. For example, we had a ground coffee brand that faced the same problems because Amazon implemented restrictions at total category level – presumably due to premixed sugary coffee drinks. And we had clients caught totally unaware, such as supplements, as they maintain that HFSS does not apply to their products,” she added.

Many fear the crisis could continue well into the Christmas period. Baker said: “There are brands that are heavily reliant on Q4, and their immediate concern is how badly they’ll be impacted if they can’t sort it in time. 

“They’ve planned stock based on last year’s sales, and now all those plans have been thrown up in the air. The nervousness at the moment is due to the uncertainty. They are very, very concerned.”