Prime Day, which will be held July 16-17, has become the premier shopping event of the summer: Coresight Research estimates that Amazon will generate approximately $3.4 billion in worldwide sales during the 2018 event, up from an estimated $2.4 billion in 2017. But while the biggest opportunities are owned by Amazon, other retailers can take advantage of the event for their brand’s benefit.
“Prime Day is very much Amazon’s baby and we see relatively limited opportunities for other retailers to piggyback on it,” said Deborah Weinswig, Founder and CEO of Coresight Research in an interview with Retail TouchPoints. “That said, there are likely opportunities for major competitors to offer some ‘spoiler’ promotions.”
The big-ticket items from Prime Day are home goods and electronics, which 41% of shoppers plan to buy, according to a survey by BlackFriday.com and Offers.com. But despite the temptation of deals, shoppers aren’t making these purchases without doing their research, which presents opportunities for other retailers: almost half of consumers (49%) always compare prices prior to making a purchase from Amazon, while another 33% compare prices occasionally.
Additionally, Amazon isn’t the only stop for deal-seekers. More than 76% of U.S. Prime Day shoppers visited competing web sites to make sure they were getting the best deals, according to a survey by Bazaarvoice. Also, approximately 96% of consumer web site demand on RetailMeNot was driven by retailers other than Amazon, according to Tom Caporaso, CEO of Clarus Commerce.
Competing retailers should emphasize the immediate gratification of buying an item from a physical store; convert shoppers on big-ticket, heavily researched purchases prior to Prime Day; and use their customer knowledge to curate selections and personalize offers.
“The worst thing that retailers can do for Prime Day is nothing,” said Caporaso. “Prime Day encourages people to shop online, period. Simply doing nothing can be a worse tactic than trying to compete. Customers are expecting deals and if they find that their favorite retailer doesn’t have any going on, they will likely jump over to Amazon and start looking.”
Omnichannel Retailers Need To Leverage Their Physical Spaces
It’s true that for most retailers, competing directly with Amazon on Prime Day is a futile exercise. The marketplace excels at price management, elasticity and inventory, and few companies can compete with its resources in those areas, according to Sylvain Perrier, president and CEO of Mercatus.
Further discouraging direct competition is the fact that Amazon has been careful to limit the holiday to its own brand, with exclusive deals for its more than 100 million Prime subscribers. This makes it unlikely that Prime Day will ever become a true industrywide event, so retailers need to come up with creative ways to lure shoppers if they want to capitalize on its potential.
It’s not as simple as it is in the world of physical retail, where big sales that generate traffic can have a positive spillover effect for other retailers. “If you’re thinking about brick-and-mortar, when Nordstrom has their annual sale you’re going to the mall, and that gives competing retailers an opportunity to try to hijack that consumer traffic,” said Greg Portell, Lead Partner in the retail practice of A.T. Kearney. “In Amazon’s world, they created a little bit of a walled garden, so it’s difficult for traditional retailers to jump in on that.”
Yet ignoring Prime Day is not a smart move for competitors, according to industry experts. Instead, retailers can take steps to attract customers in unique ways that are different than the appeal of shopping at Amazon:
- Leverage their physical presence: Prime is fast, but retailers with a physical presence should remind customers that they can immediately leave the store with their purchase in hand, according to both Caporaso and Sarah Hollenbeck, Shopping Expert at BlackFriday.com. Additionally, in-store curation and product displays are services that Amazon isn’t able to replicate;
- Convert before Prime Day: Major purchases common on Prime Day, like televisions, aren’t something shoppers buy often, noted Portell. Therefore, selling a big-ticket item before Prime Day can secure a sale that would otherwise go to Amazon; and
- Know your customers: While Amazon has a little bit of everything, more specialized retailers can appeal to shoppers by offering them a curated, more personalized selection. Caporaso suggested that retailers find creative ways to appeal to their customers that Amazon can’t match.
While the threat of sales lost to Prime Day can be imposing, retailers can minimize the impact by directing shoppers’ attention to their own offerings. Competitors can weather the 36-hour storm, and even benefit from it, by calling on the capabilities that set them apart from the retail giant.