Amazon went viral
on Prime Day for the wrong reasons; the
e-Commerce giant experienced site outages within an hour after deals started at
3 pm EST. The glitches revealed that Prime Day promotions may have
worked a little too well. Despite the
problems, Amazon still saw an 89% year-over-year
sales boost within the first 12 hours of the shopping event.
The RTP team discusses
whether any retailer can truly prepare for a major sales spike if Amazon can’t,
and whether it’s even possible for Amazon to prepare a dry run for an event as
massive as Prime Day.
Debbie Hauss,
Editor-in-Chief: Amazingly enough, Amazon survived site outages during the start of Prime Day 2018, reporting an 89% increase in sales in the first 12 hours of the event, compared to last year. Although total sales for the event have not yet been publicized, some deals are reportedly still available hours after Prime Day officially ended, including Alexa devices and Nintendo products. This could indicate Prime Day 2018 might not reach its expected $3.4 billion. Also, Amazon stock prices took a hit following the site glitches: After rising more than 1.5% early on Monday, it closed at only about 0.5% up; and was continuing to fall approximately 1% in after-hours trading. Generally, I don’t think the site outages are going to have a long-term negative impact on Amazon; in fact, I think some consumers may have tried harder to complete their purchases, knowing there was a lot of competition for the deals.
Adam Blair, Executive
Editor: Covering Amazon has become a bit like covering today’s crazy
political scene: you start to see conspiracies everywhere. So my
first thought when reports trickled in that Prime Day was experiencing glitches
was, ‘I wonder if Amazon is doing this on purpose to get more
attention?’ After all, nobody remarks when the soup is hot, the steak
is done right and the dessert is delicious; they only demand to see the
restaurant manager when things go wrong. A more likely explanation, though, is
that no e-Commerce infrastructure — not even the mighty Amazon’s — can
withstand the artificially created traffic spike of a Prime Day without at
least a few hiccups. (And the technical glitches don’t seem to have interfered
materially with what looks like another record-breaking Prime Day.) Whether it
was self-inflicted or accidental, Prime Day will serve as a “stress test” to
help Amazon prep for the upcoming holiday season. It would be a good idea for
other retailers to work out their e-Commerce kinks prior to Q4.
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Glenn Taylor, Senior
Editor: The results have been too good for Amazon since Prime Day sales
kicked off to truly cause long-term concern for them, but Internet bandwidth
(or its lack) isn’t something that should be taken lightly under any
circumstance. Retailers should take note that this has to be a priority
immediately, especially with the back-to-school season around the corner. In my
recent conversation with Jim Fosina, CEO of Fosina Marketing Group, he shared
the possibility that Amazon is so calculated and mathematically on top of
things that it’s possible the company knew a slight overload would occur on its
site — one that got people talking until everybody knew about it. While we will
never know if that’s the case, it does show that the company can thrive even
when a slight wrench is tossed in its plans, especially on its biggest day of
the year. The “dogs of Amazon” factor definitely helped matters throughout the
outages — people were genuinely excited to see what new dog would pop up on
their screen. If anything though, the site mishap is going to give Amazon an
excuse to fortify its AWS platform even more ahead of the holiday season to ensure
that it is firing on all cylinders. The rest of the industry will have to do
the same.
Bryan Wassel,
Associate Editor: It should come as no surprise that even Amazon wasn’t
able to keep up with the traffic of Prime Day: Amazon’s share of the U.S. e-Commerce
market is 49%, accounting
for 5% of all retail
in the country, according to TechCrunch. A retailer on this scale can’t do a
dry run, if only because its major sales involve a significant fraction of the
U.S. population accessing its web site simultaneously. Still, whatever caused
the crash will be useful data for Black Friday and the holiday season, helping
the e-Commerce titan prep for what may be its biggest year yet. We’ll see if
the recent collaboration between Walmart and Microsoft will put
a dent in Amazon’s online dominance, or if the crash was just a hiccup on its
route to total domination of the channel.
