Most e-retailers offer special discounts and specials on Cyber Monday (the Monday following Thanksgiving, which will be November 27th this year), but Amazon has now successfully created its own industry holiday with Prime Day.
What is Prime Day?
- Amazon has announced that July 11th will be Prime Day, 2017.
- In the spirit of Cyber Monday, Amazon has hosted this special day three years on a row now – the first one in 2015 was to celebrate Amazon’s 20th year in existence.
- For the full day, shoppers with Prime will enjoy special discounts and deals. Get a snapshot of what’s planned for the consumer here. Amazon will run Alexa-exclusive offers starting July 5th – just ask your Alexa device what the Prime Day offers are.
- In 2017, instead of one full day, the sales that make up Prime Day will run for 30 straight hours. Prime Day will begin at 6 p.m. Pacific on July 10 and ending at midnight Pacific on the 11th. Mark your calendar.
- To participate, Marketplace Sellers on Amazon can offer time-sensitive, limited-quantity promotions, limited to one per customer until the deal expires or available discounts or products are claimed.
“Prime Day is our annual deals event just for Prime members. We want Prime Day to be one of the world’s best days to shop, with awesome prices on everything you’re into. We’re bringing you hundreds of thousands of deals, new deals starting as often as every five minutes, and special offers across everything included with Prime—from music and video to reading and voice shopping.” (Source: Amazon.com)
What’s in it for Amazon?
- Since 2015, Amazon has enjoyed the day’s flash-sale-style ability to drum up interest at a pique shopping time of the year, driving an increase in sales just before the holiday shopping season kicks in.
- It’s also a critical opportunity to promote Amazon Prime, the company’s loyalty program that includes free 2-day shipping, photo storage and other perks.
According to Internet Retailer, Prime Day 2016 (held on July 12th, a Tuesday) was the biggest sales day in Amazon’s history. Despite Amazon not releasing exact sales figures, here are some eye-opening stats estimated by reputable retail & commerce sources:
- Shoppers spent $2.5 billion on Amazon on Prime Day, 2016, (Internet Retailer estimate) up from an estimated $1.5 billion spent on Prime Day 2015.
- Customers placed 60% more orders on Prime Day 2016 than the year prior. (Internet Retailer estimate)
- 70% of all online shoppers say they are planning to visit Amazon.com on Prime Day 2017 (A survey of shoppers by Bizrate Insights for Internet Retailer)
What’s in it for Amazon Marketplace sellers?
- There’s a fee to participate if you sell products through Amazon: The fee for sellers to participate is up to $500 this year, up from $300 in 2016 and $150 in 2015.
- To participate, Amazon sellers can offer Lightning Deals on products that must be “Prime-eligible” and stocked in Amazon’s warehouses to be fulfilled by Amazon.
- Amazon Marketplace sellers who choose not to participate in the deals may still enjoy an increase in interest in their products as a result of the increase in traffic to Amazon.com during that 30-hour period of time. In fact, one retailer who talked to Internet Retailer said he did not participate in Prime Day 2016 but still saw triple the sales compared to an average day.
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What Do Our Industry Experts Think?
“Every day is Prime day,” says Jim Hertzfeld, Principal, Strategy & Innovation at Perficient Digital. “Let that sink in.” Hertzfeld is speaking to Amazon Prime’s dominance in the industry since launching Prime.
“Prime Day is an evolution of Cyber Monday, which was an evolution of Black Friday,” says Perficient Digital’s John Latham. “These retail trends and the mechanisms for how retailers are capturing the consumer’s attention are evolving, spreading out and shifting increasingly online.”
“Without ever starting as a Hallmark holiday, Amazon Prime is once again changing the way that people shop. How Amazon’s influence on consumer shopping behavior evolves is an open question and an increasingly interesting one as they expand into the brick-and-mortar space with the pending acquisition of Whole Foods.”
Why is Amazon Prime one of (if not the singular) most successful loyalty programs ever?
- It requires no accumulation of points or miles
- It requires no sign-up for a credit card or spending requirement beyond a $99 annual fixed fee
- A marketing success story, Amazon “latched on to the power of defaults, knowing that the result of a customer browsing first on Amazon would be immensely more profitable than the $79 membership fee, which has since been raised to $99.” – Loosethreads.com
“When customers spent more, Amazon’s volumes increased, so it could lower shipping costs and negotiate new deals with vendors. That saved the company money, which would help pay for Prime and lead back to lower prices… Prime changes a customer’s shopping behavior by minimizing friction she is subject to. Less friction breeds more loyalty.” (Brad Stone’s book “The Everything Store”)
Sell on Amazon, but you don’t want to participate in Prime Day?
“Discount products and spend money on advertising, such as on Amazon’s pay-per-click campaigns. That way, he can take advantage of the traffic surge on Prime Day without sacrificing as much margin as he would if he paid to participate in Prime Day deals.” (Source: Internet Retailer)
How is this year unique?
According to Internet Retailer, retailers who sell through Amazon’s Marketplace, meaning you’ll find their goods on Amazon.com, are already starting to prepare for Prime Day each year as though it’s a second Black Friday or Cyber Monday. Some etailers even report seeing double the daily sales volume on that day.
How do retailers who sell through Amazon prepare for Amazon Prime Day?
- Ensure pricing is competitive
- Check product descriptions and photos to make sure they’re polished
- Check out recent product reviews
- Make sure inventory levels can support estimated demand
- Offer special deals for Amazon customers during that 30-hour window while adhering to Amazon’s rules for discounts and inventory on Prime Day
“Prime Day is a great day to sell inventory at an accelerated pace, especially for goods that may have been sitting in warehouses for a while. For instance, if a seller’s product has received good reviews but hasn’t sold recently on Amazon, then discounting the price and promoting it on Prime Day is a good way to drive sales, marketplace sellers say.” (Source: Internet Retailer)
Header image source: Flickr User: Kārlis Dambrāns