Will Prime Day give Amazon an insurmountable advantage online?
No rival comes close to matching the sales produced by Amazon.com online. Chances are good that the advantage the e-tailer holds will grow even stronger after the conclusion of the company’s third annual Prime Day, which began last night at 9:00 ET (7:00 for Alexa shoppers).
Most reports see two key goals for Amazon this year: expand the ranks of its Prime membership program and drive sales of the company’s Echo, Fire and Kindle devices.
Building on its base of Prime memberships is key to Amazon’s success as members spend more on the site than non-members. Earlier this year in a filing with the Securities and Exchange Commission, Amazon reported $6.4 billion in retail subscription services (translation: Prime memberships). Recent estimates as to the number of Prime members in the U.S. stands between 65 million and 80 million.
Driving sales of its hardware is also key for Amazon as these very same devices are also used as platforms to make purchases on the site. Slice Intelligence reported that Amazon’s hardware devices accounted for 70 percent of the top 10 selling products during Prime Day 2016.
Amazon is offering significant discounts across its lines to drive volume. Amazon Echo, which normally sells for $179.99, is now selling for $89.99. The company’s line of Echo devices hold a 70 percent share of the voice-activated speaker market, according to eMarketer.
Other deals include the Fire HD 8 tablet on sale at $49.99, a $30 discount. Customers looking to make reordering easier can purchase Dash buttons for 99 cents instead of the usual price of $4.99, while still receiving a $4.99 credit on their first orders.
Slice projects that U.S. sales volume will be 20 percent higher than Prime Day 2016 due to higher per person spending and the six additional hours tacked on for the 2017 event. Last year, the average spend per buyer was 14 percent above 2015. The firm sees an opportunity to increase revenues by getting existing shoppers to make a purchase during the event. Last year, only 16.2 percent of past buyers on Amazon made a Prime Day purchase.
- From Beauty Fans to Bookworms and Gamers to Gardeners – Amazon Prime Day 2017 Offers Prime Members an Epic Day of Deals on Everything They’re Into – Amazon.com
- Prime Day Predictions, 2017 – Slice Intelligence
- Amazon hints at one of its best-kept secrets: How many Prime members it has – CNBC
- Alexa Is More Likely to Recommend Amazon Prime Products, According to New Research – Adweek
- Data: Four Out of Five Millennials Purchased From Amazon in the Past Month – Yes Lifecycle Marketing
DISCUSSION QUESTIONS: How much stronger will Amazon be as a retailing entity coming out of Prime Day 2017? Where do you see the event making the most significant gains?