Prime Day is no longer just Amazon’s baby: it’s transforming into a general shopping holiday, like Alibaba’s Singles Day or Black Friday. And while the novelty of the event has started to wear off, it will still drive a significant sales boost across the industry, according to Marshal Cohen, Chief Industry Advisor at The NPD Group.
“Now that it went from 36 to 48 hours the sense of urgency has also shifted,” said Cohen in an interview with Retail TouchPoints. “It's like going to a restaurant. When it's crowded and small, you feel like you're a part of something special. When the restaurant is bigger and more spacious, then you can get a table anytime you want — the food can be just as good, but the imagery is different.”
Some key points to note about Prime Day 2019:
• Other e-Commerce retailers are benefiting from Prime Day traffic, with $1 billion+ retailers generating larger sales increases (by percentage) than retailers with under $5 million in annual revenue;
• Email campaigns remain a key sales driver;
• Amazon is using Prime Day strategically, for increasing Prime memberships, getting Amazon tech into customers’ homes and gathering customer and competitor data;
• Amazon is pushing its private label lines, although not at the expense of other brands, and is gaining traction in apparel as well as the electronics that have been the traditional Prime Day mainstay.
Prime Day Traffic Translates Into Conversions, Bigger Baskets
Preliminary results for July 15, the first half of Prime Day, reveal that online retailers saw a 66% overall lift in revenue, according to data from Adobe Analytics. Traffic was up across the board, and 27% of the lift was caused by an increase in conversions, with 7% driven by larger baskets. Additionally, a number of retailers used social networks and video to ride the Prime Day wave. Here's a video from Lamps Plus.
Retailers with more than $1 billion in annual revenue saw a 64% sales increase compared to the average Monday, compared to a 54% bump in 2018. Retailers with less than $5 million in annual revenue saw a smaller but still significant 30% increase in online sales.
While smaller retailers don’t have the resources to compete with Amazon or Walmart on price, they can still benefit from flaunting their unique strengths during Prime Day. Getting their message out to shoppers is key: brands that utilized email experiences to drive sales during Prime Day saw a 50% lift in revenue, while those that lacked an email strategy saw only a 17% lift, according to Adobe.
“I always say you fight fire with your own fire,” said Cohen. “What that means is, if you're better at servicing the consumer, or if you have a unique assortment, by all means why shouldn't you get out there and do what you do best? I wouldn't say you're going to undersell or over-convenience Amazon, but what you are going to be able to do is out-service them. It is really important for you to get out there, because if I buy a sweater from Amazon during Prime Day, am I going to run out and go buy a sweater from my favorite specialty retailer next week? No.”
Amazon Seeks Prime Members, Tech Adopters And Customer Data
Prime Day always has been about more than sales: it’s been a driving force behind the mass adoption of Amazon Prime as a service, according to Chris Elliott, Senior Insight Analyst for Edge by Ascential. Prime membership topped 100 million last year, and the growth trend continued this year as Amazon used the holiday to entice more shoppers into its loyalty program as well as its smart home ecosystem.
“We actually think Amazon has priced quite aggressively this year,” said Elliott in an interview with Retail TouchPoints. “In previous years we've seen their devices only marginally undercutting Google equipment, but this year we've seen huge discounts, especially on the Fire devices. The introduction of the Amazon Echo Show Five was quite a big and bold move that could really try and undercut the Google Home Hub.”
Amazon also is securing more customer data by offering $10 in credit to shoppers who download the Amazon Assistant browser plugin, according to Reuters. The comparison shopping tool provides Amazon’s price for products that users browse on Walmart, Target and other sites — and also gives the retailer potentially valuable insight into the sites its customers visit.
Special Promotions Put Private Label In The Spotlight
Tech and data aren’t the only areas where Prime Day is driving adoption —Amazon also is taking the opportunity to push its private label brands. Apparel is one area where Amazon seems particularly interested in flexing its muscles, and the event provides an excellent opportunity to show off the e-Commerce giant’s growing portfolio of items.
“As we get deeper into day two of the Prime Day shopping holiday, it’s a sprint to the finish,” said Justin Belgiano, SVP Consumer Data Practice at Nielsen in commentary sent to Retail TouchPoints. “Across the board, promotions are running the gamut — far beyond the electronics that this shopper holiday grew up on. As expected, grocery deals are piquing consumer interest, but it’s interesting to see that Amazon’s growing fashion and furniture offerings are also catching the attention of consumers this year thanks to a strong push from social influencers.”
However, Amazon isn’t promoting its own goods at the cost of hiding other brands, which continue to drive sales across the site. The massive number of already signed-up Prime members is likely causing a slowdown in signup rates, and as Prime Day becomes a general shopping holiday the retailer is shifting its goal toward driving conversions.
“As you reach saturation, it becomes very difficult to continue to get growth rate of signups,” said Cohen. “However, what I think they're doing this year, if you really look at it, is a combination. These are the beginning stages of moving away from that membership focus, but they're not ignoring that and they’re not leaving it off the table.”