The Amazon Effect   //   July 12, 2023

Back-to-school brands are ramping up discounts and ad spend for Prime Day

With Prime Day kicking off the back-to-school shopping season this year, school supply sellers are offering deep discounts and spending more on advertising to attract shoppers.

Hydros — which sells water filters, pitchers and bottles — is offering a 30% discount on all of its products on Amazon, a 10 percentage point increase from last year. Meanwhile, hand sanitizer brand Touchland is offering 20% off its products, a discount the company typically only holds on Black Friday and Cyber Monday. With the help of influencers posting back-to-school hauls on social media platforms like TikTok, Touchland has positioned itself as a “cool accessory” among younger shoppers and has typically seen a lift in sales during the back-to-school shopping season. Both companies have also ramped up their advertising spend to acquire more customers. 

For brands like Hydros and Touchland, the back-to-school shopping season is one of their best sales periods of the year. This year, brands are expecting parents to take advantage of Prime Day sales to save money on back-to-school essentials. As a result, back-to-school brands are heavily promoting their products to spur sales and acquire more customers by increasing ad spend, stocking up on inventory and figuring out the ideal promotional strategy.   

“Seasonality plays a massive role for the brands,” said Adam Colasanto, head of consumer intelligence at Vizit. “You got to put your best foot forward in a very short window. Consumers are looking for an easy way to purchase everything they need at a competitive price.”

A survey conducted by coupon website RetailMeNot indicates that 76% of Prime members said they plan to shop for school-related products during Prime Day, which began earlier this week. This presents an opportunity for sellers whose sales are influenced by back-to-school shopping demand. 

Standing out through discounts

With inflation impacting the budgets of parents, it’s no surprise that many Amazon sellers are dangling steeper discounts to lure shoppers. It is no different for Hydros, which started shifting its strategy from DTC to Amazon around March.

Last year, the company offered a 20% off promotion on all its products, which resulted in a sales spike around five to six times higher than its typical monthly volume. The company had “low seven figures” in total revenue last year. With the help of its 30% off Prime Day strategy, the company hopes to bump up its revenue by 20% to 30% this year.

“​​Partially because we’ve really refocused our efforts towards Amazon, it’s more critical now than ever to really make a statement on this platform if we’re going to put a considerable amount of focus on it,” Hydros founder and CEO Winston Ibrahim said. He added that the financial instability among consumers is another reason why Hydros offered more generous discounts. “We want to go out of our way to kind of offer everybody a really great deal, especially since we’re very fortunate that we have relatively good margins.”

Touchland, on the other hand, is expecting shoppers to take advantage of the 20% discount and bulk buy. Andrea Lisbona, CEO and founder of Touchland, said the company has captured the interest of younger shoppers as a school accessory. Much like last year, Touchland is expecting its products on Amazon, around 25 different SKUs, to completely sell out.

In preparation for Prime Day, Touchland has doubled its inventory space at Amazon compared to last year. On the first day of Prime Day last year, Touchland’s sales grew 3x compared to a regular day. Touchland, which entered Amazon just last year, grew its Amazon revenue by 16% in the second quarter versus the first quarter this year. 

“For us, [our strategy] has been really focused on inventory planning, because one of the [most important] things when you’re growing so fast in a platform is really understanding the demand,” Lisbona said. “We also have a success customer representative at Amazon, being a Launchpad brand, so they have helped us kind of prepare for the event and give us like all of the tips and ways to really enhance sales.” Amazon Launchpad is an accelerator program that provides resources for entrepreneurs to grow their businesses.

Spending on Prime Day ads

With so many sellers on Amazon, heavy discounting isn’t the only way brands are using to tempt shoppers. 

As part of Hydros’ shift to Amazon from DTC, the company has trimmed back ad spend on Facebook and Google, channels that drive traffic to its website. Instead the company has focused its efforts on driving traffic to its Amazon page and listings through Amazon ads, micro influencers and social media. 

“It’s a pretty meaningful period of time for us,” Ibrahim said. Hydros has invested 30% more this Prime Day event compared to last year. Additionally, Hydros has updated its lifestyle and product shots to boost the brand’s appeal.

Meanwhile, Touchland said being a Launchpad brand gives the company more visibility on the platform. Still, the company maintains an aggressive marketing strategy, using a mix of sponsored ads and social media promotions. Touchland is increasing its ad spend by 3x during Prime Day. 

In Touchland’s case, its presence on Amazon is more of a customer acquisition play. “I do think that this opportunity and this sale enables you to have more visibility,” Lisbona said. “Our goal for this is to make sure that as many people as possible get to try the brand, enjoy the brand and get to discover the benefits.”