Holiday 2025 didn’t play out the way most Amazon operators expected. For years, the formula was predictable: build into Black Friday and Cyber Monday, let the tentpoles do the heavy lifting, then manage the post-holiday slowdown. This year broke that pattern.
According to SUG co-founder Daniel Tejada, tentpole spikes were softer, shopping stretched over a longer window, pricing was pressured by tariffs, and Amazon fee increases are about to show up quickly in brand P&Ls; real shifts that matter for how brands should plan 2026.
During a recent event with Roth Capital Partners analyst Rohit Kulkarni, Tejada shared what he’s seeing across SUG’s nearly $1B in annual marketplace sales managed. While many of the insights come from consumables, grocery, beauty, and other high-velocity categories, the takeaways apply broadly: the Amazon ecosystem is changing, and the brands that adapt their pricing, inventory, and ad strategies now will be better positioned heading into next year.
The Holiday Season Didn’t Spike, It Stretched
Historically, tentpole events like Black Friday and Cyber Monday create outsized daily lifts, those huge “spikes” that justify months of planning. This year, spikes softened.
DT put it plainly:
“Tentpole events were probably the smallest lifts they’ve seen… This year… that was depressed by about 50%.”
That’s a major shift. Not because promotions stopped working, but because shopper behavior changed. Instead of concentrating demand into a few peak days, consumers spread shopping across a longer window, especially when discounts were less dramatic (or felt less dramatic).
The result is a season that’s harder to “win” through one moment. The brands that performed best weren’t just the ones with the biggest deals; they were the ones that stayed available, stayed competitive, and stayed visible over time.
What changed underneath the surface?
Two forces collided:
- Brands pulled back on discount depth: partly because cost pressures made margin giveaways less feasible.
- Consumers still bought, just more gradually, and with more price sensitivity.
That combination reduces the tentpole surge while still allowing year-over-year revenue growth in many accounts.
Tariffs and Cost Pressure Are Rewriting Price Elasticity
One of the clearest takeaways is that tariff pressure and rising costs aren’t hitting Amazon brands all at once, they’re rolling through in uneven, delayed waves.
Brands didn’t raise prices immediately when costs rose. Many “buffered” those increases by buying inventory early and holding pricing steady as long as they could.
In other words: brands may see revenue up while units fall. And that’s not a theoretical scenario: it’s already playing out in categories like coffee and chocolate, where commodity inputs and tariff-related pressures are acute.
For operators, this matters because it changes how you evaluate performance:
- Your topline can look healthy while your customer acquisition slows.
- Your ad efficiency can look “fine” while your repeat rate quietly declines.
- Your contribution margin can get squeezed from both ends—COGS up, fees up.
The implication for 2026 is not simply “raise prices.” It’s raise prices with a strategy: clear value framing, pack architecture, and retention levers that protect lifetime value.
December Was Stronger Than Expected and Inventory Played a Big Role
One of the more surprising observations was that December didn’t taper the way it often does. In fact, it outperformed historical patterns.
“December was actually more robust than it has been historically… probably 15% higher growth in December compared to other Decembers.”
Why? DT pointed to inventory timing.
Many brands held off reordering earlier (after pulling inventory forward in Q1), then ran into out-of-stocks as Q4 progressed. When inventory finally returned, demand that might have been captured earlier got pushed into December.
This is a critical lesson for 2026: inventory availability isn’t just a supply chain issue, it’s a demand-shaping lever. If you’re out of stock during the weeks when shoppers are actively browsing, you don’t simply “lose sales.” You lose rank, you lose organic momentum, and you pay more later to rebuild.
For some brands, December strength may have been a recovery, not a “win.” The brands that treat it as a signal and adjust inbound planning accordingly will be in a stronger position next holiday season.
Category Divergence
DT’s view of category performance was nuanced but directional:
Consumables performed well, while higher-end products like Electronics were softer and required heavier discounting to drive volume.
This aligns with a broader retail reality: when budgets tighten, consumers keep buying essentials, but they become more selective about higher-ticket discretionary purchases.
DT added that electronics brands leaned into deep deals throughout Q4. If you operate in categories with similar dynamics, plan for a world where:
- Discounting is still required to move volume, even if cost pressures limit flexibility.
- Your promotional calendar needs to work harder, not just louder.
- Differentiation and content matter because price competition is intense.
Amazon Fees: Fast Return to Increases
One of the most operationally urgent takeaways is that seller economics are tightening fast.
Historically, Amazon raises fees annually, and 2025 stood out because those increases stayed relatively flat. That pause is now over, with new fee changes beginning to roll out in mid-January and expected to meaningfully impact margins for many sellers.
The impact for brands is immediate. Higher Amazon fees compress contribution margins and force tougher decisions around pricing, promotional depth, and advertising efficiency. That pressure compounds quickly once rising tariffs and input costs are layered in. This is where many brands get stuck. Growth is still the goal, but it now has to happen inside a margin structure that is getting tighter, not looser.
The way out is not “spend less” or “cut ads.” It’s a more deliberate operating approach:
- SKU-level profitability modeling.
- Tiered pricing actions.
- Efficiency improvements in prep, packaging, and fulfillment workflows.
- Smarter media allocation (including when not to spend).
Logistics and Same-Day Delivery: An Underappreciated Growth Driver
DT was notably bullish on Amazon’s logistics evolution, particularly its expansion into faster, more localized fulfillment. He framed this shift as a meaningful growth unlock for the business, noting that Amazon is increasingly operating like a large-scale storage and shipping company.
“That’s going to be a big unlock for their growth. They’re basically becoming a big storage and shipping company at the end of the day. In-store same-day delivery started off in about 300 zip codes. It’s up to around 1,500 now, and they’re supposed to get to close to 5,000 zip codes in the next two quarters.”
For brands, this is more than an Amazon corporate storyline. Faster delivery changes what wins on the shelf:
- Availability matters more than ever.
- High-frequency replenishment items gain an edge.
- Single-item orders become a meaningful driver in grocery and consumables.
If your products can participate in faster delivery networks, your operational readiness (in-stock rate, replenishment timing, packaging compliance) can become a growth lever.
Search Is Still King, But DSP Keeps Taking Share
On the media side, DTconfirmed what many operators are already feeling: Sponsored Products and search placements remain the core driver, but DSP is taking a bigger slice of budget.
“Search is still king… [but] DSP gets bigger and bigger… search is probably 70% of a budget where it used to maybe be 80%.”
Two drivers stand out:
- DSP is easier to adopt than it used to be (less education, better tooling).
- Brands are looking for scalable growth levers at even lower margins.
Amazon’s DSP may be getting more expensive, but performance can justify the premium due to Amazon’s data and conversion proximity.
For brands, that reinforces a key strategic shift for 2026: Stop evaluating media channels solely by cost. Evaluate by incremental impact and customer value, especially as fees and COGS rise.
Rufus: Watch Discovery Signals
DT offered a measured take on Amazon’s AI shopping experience, Rufus.
He believes the real impact today is not that “agents” are shopping for consumers at scale. It’s that Amazon is embedding AI everywhere: from summarizing reviews, shaping discovery, and streamlining internal operations.
“What we’re not necessarily seeing are customers using Rufus to buy the items themselves… that’s still a very low adoption.”
For sellers, the actionable takeaway is less about “optimizing for Rufus” as a separate channel and more about listing quality and indexation, because AI-driven discovery layers will increasingly amplify or suppress what shoppers see.
What Brands Should Do Now: An Amazon Checklist
If 2025 taught us anything, it’s that the “set it and forget it” Amazon strategy is over. The winners in 2026 will be the brands that operationalize agility: pricing, inventory, media, and compliance moving in lockstep.
Here’s a practical set of moves to consider:
1) Rebuild your SKU economics model (with fee increases included)
- Refresh contribution margins at the SKU level.
- Identify products that become unprofitable under new fee structures.
- Decide: price increase, pack/format change, promo reduction, or ad pullback.
2) Shift holiday planning from tentpoles to a longer demand curve
- Plan for sustained visibility over 4–8 weeks.
- Focus on availability and repeatable offer architecture, not just one-time discounts.
3) Tighten inventory + in-stock governance
- Set earlier reorder triggers for tariff-sensitive items.
- Protect December availability, don’t rely on recovery.
4) Rebalance media: defend search, expand DSP thoughtfully
- Keep search as the consistent growth engine while using DSP to expand reach, retarget shoppers, and support category conquesting.
- Measure beyond ROAS: new-to-brand, repeat behavior, and incrementality.
5) Prepare for faster delivery networks where you can
- If you’re in grocery/consumables, treat same-day readiness as a growth lever.
- Ensure your operational setup can keep you eligible and competitive.
The New Reality for Amazon in 2026
This season made one thing clear: the Amazon operating environment has shifted. Demand is spreading out rather than peaking around tentpole moments, cost pressure is delayed but more severe when it hits, and Amazon fees are moving up again.
Winning in this environment is not about doing more or spending more, but about tighter execution, clearer unit economics, and aligning pricing, inventory, and media around sustainable, profitable growth.
If you’re building your 2026 plan right now, the best next step isn’t guessing what Amazon will do. It’s controlling what you can:
- Know your unit economics.
- Protect your in-stock rate.
- Spend where you can prove incrementality.
- Raise prices with intention.
The environment has changed, but the path forward is clear. Brands that tighten operations, stay in stock, and spend with intent will keep growing.
