Amazon announces Prime Day-and-a-half

Discussion
Source: Amazon
Jul 03, 2018

Amazon.com has announced details on this year’s version of Prime Day, including the fact that the event will be extended from 30 to 36 hours. The promotion will kick off on July 16 at 3:00 p.m. ET and will feature more than a million deals from around the planet for Prime members.

This year’s event will offer discounts across a wide variety of categories, including “double the deals” on Amazon’s own Echo, Fire TV and Fire tablet devices. The e-tailer also plans to extend the savings on more of its private label lines, including 20 percent off AmazonBasics, 25 percent off Rivet and Stone & Beam furniture and home décor, as well as 30 percent off everyday items from Mama Bear, Presto, Solimo and other brands it owns.

Amazon will extend its deals to Whole Foods where Prime members will receive 10 percent off hundreds of sales items in the chain’s stores. Members who use the Amazon Prime Rewards Visa to pay for their purchases will receive 10 percent back instead of the normal five percent between July 14 and 17 on purchases up to $400.

As in the past, Amazon is using Prime Day to recruit new members with an offer of a free 30-day trial period. In a letter to shareholders in April, Amazon CEO Jeff Bezos said the company has more than 100 million Prime members worldwide.

In a new twist, Amazon is hosting special entertainment events around the country in the run-up to Prime Day. The e-tailer announced it would ship giant Smile boxes to major cities around the planet to highlight the music, video, gaming and other benefits that come with a Prime membership. Details on the events can be found on Amazon’s unboxing Prime Day page.

Last year, Amazon generated $1 billion in revenue from Prime Day, according to estimates by Cowen & Co. and JPMorgan Chase. That made the event an even larger revenue producer for Amazon than Black Friday or Cyber Monday.

Amazon’s past Prime Day success has come at the expense of other retailers. A report issued last year by Sense360 found that other retailers saw foot traffic in their stores decline by an average of 24 percent during the event.

Separate research from Slice Intelligence, which analyzes sales data from a panel of more than five million online shoppers every day, found that Amazon also cut into its rivals’ e-commerce market share during Prime Day 2017. Walmart saw its share fall from 2.1 percent to 1.0 percent and Target declined from 1.5 percent to 0.9 percent during the event. J.C. Penney, Kohl’s and Macy’s also experienced a share drop.

DISCUSSION QUESTIONS: What are your predictions for performance of Amazon’s Prime Day 2018? What would be your strategy if you were competing against Amazon during the 36 hours that make up this year’s event?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Other retailers need to take advantage of the increased shopper attention over these days, even if it looks like they are conceding to Amazon."
"With the added perks and extended hours of Amazon’s Prime Day 2018, there is no doubt it will far exceed the $1 billion in sales from last year."
"Are we moving toward Amazon Year? It seems we are seeing something new, at least on a weekly basis..."

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20 Comments on "Amazon announces Prime Day-and-a-half"


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Evan Snively
BrainTrust
Evan Snively
Loyalty Strategist, Chapman & Co. Leadership Institute
3 years 3 months ago

They can’t compete during the event itself. Competitors might have a limited upside by hosting an event prior to Prime Day, enticing consumers to cross off items on their wish list before they see the deals on Amazon.

Lyle Bunn (Ph.D. Hon)
Guest

A special event with deals excites almost all consumers. And it revs up and tests supply capability so, in the consumption economy, everybody wins. Other retailers should treat it as the buying event it is while reinforcing the discovery, product examination and immediate gratification that is physical retail.

Ed Rosenbaum
Guest

Are we moving toward Amazon Year? It seems we are seeing something new, at least on a weekly basis, where Amazon is pushing the envelop just a bit more to where they are controlling what happens and how it happens in our retail world.

Brandon Rael
BrainTrust

It’s a losing proposition to attempt to compete with Amazon head-to-head on Prime Day in terms of pricing, promotions and the vast assortments. What retailers should focus their energies on is to strategically ensure that they are providing the best customer experience year-round, across all the shopping channels. It’s the long-term relationships between the consumer and store associates and the ties to the local communities, as well as the transporting in-store experiences that will need to be the ongoing strategy for retailers.

Kiri Masters
Guest

Prime Day 2018 will be the biggest yet, as Amazon has significantly increased their media advertising budget over 2017 and will be leveraging every possible channel to drum up attention. Amazon now has a larger presence in international markets, giving them significant revenue potential outside the U.S.

Other retailers need to take advantage of the increased shopper attention over these days, even if it looks like they are conceding to Amazon. Black Friday was once a brick-and-mortar play — now online retailers embrace the event as much as the alternative of Cyber Monday. If you can’t beat them, join them.

Rick Moss
Staff

It appears that eBay is taking your advice, Kiri. They announced today that they are going head to head with Amazon the same week. Their press release tells consumers to, “Skip monthly fees and access hot deals on new, in-demand items with free shipping and no membership required, ever.”

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
3 years 3 months ago
This year’s Amazon’s Prime Day will be 20 percent longer and I expect will generate between $1.4 to $1.5 billion in sales, a 40 percent to 50 percent increase over 2017’s performance. In addition to a longer “day,” Amazon has maintained, through 2017, an impressive Prime member compounded annual growth rate of 29.2 percent over a five-year period. The adoption of Alexa combined with the usual deep discounts and general excitement leading to Prime Day will attract new members as well as turning the event into a semi-official shopping holiday for Prime members and deal seekers. If I were competing against Amazon during Prime Day, I’d recognize that many of my customers are ready and willing to spend money on attractive deals. My main advantage will be my ability to provide immediate gratification, something that Amazon cannot do except at Whole Foods. So for 36 hours, I’d be guiding my customers to my own online deals, linking these to future incentives designed to bring my customers back, and prominently communicating the ease of in-store purchases… Read more »
Jeff Sward
BrainTrust

Amazon is shifting the tilt of earths axis. It has changed the dynamic of grocery shopping in my small town (Amherst, MA). Whole Foods used to be the occasional visit for specialty items. It is now the mainstay of our grocery shopping, and the sole driver of that has been Prime membership. The parking lot of my former grocery store is noticeably emptier that it used to be. And the lines at Whole Foods are noticeably longer and slower. This morning I ordered a new portable computer monitor on Prime. And this afternoon is Fourth of July shopping at Whole Foods. For everything from computers to corn and cucumbers, Prime is now the first stop.

Shep Hyken
BrainTrust

Amazon will continue its winning streak. They have momentum and a decent economy. How does an independent retailer (or even a chain) compete against Prime Day? They can’t. You have to work around it. One small glimmer of light. Not everyone is a Prime member.

Ken Morris
BrainTrust
Ken Morris
Managing Partner Cambridge Retail Advisors
3 years 3 months ago

Amazon never ceases to amaze customers and frustrate retailers. With the added perks and extended hours of Amazon’s Prime Day 2018, there is no doubt it will far exceed the $1 billion in sales from last year.

During Prime Day, retailers will have a difficult time competing with Amazon. The best bet is to offer special deals right before Prime Day to inspire consumers to make their purchases from your brand before they shop on Prime Day. Good luck retailers!

Rich Kizer
BrainTrust

Just when I think I’m my getting my head around the brilliance of Amazon, I get surprised again! Amazon knows it’s in the retail business, and retailers must constantly reach out and create excitement. This is now a national event, with its own legs! Will it be a success? Hold on to your hats, it’s going to be crazy!

So how to compete? It’s not about just pleading “buy local,” but giving customers a compelling reason to buy with excitement. I would fight back with a 36-hour sale featuring great deals for an hour or two, and then another category or item for an hour or two, for the duration of the 36-hour period. I’m not saying brick-and-mortars should be open 36 hours straight, but they should focus on driving traffic during that period by offering ongoing incentives.

Cathy Hotka
BrainTrust

Amazon is a master of free publicity, and the extension of Prime Day hours is a key example. It isn’t “news,” but they’ll make it news. Amazon’s competition should study these tactics and steal them.

George Anderson
Staff

Moody’s lead retail analyst Charlie O’Shea issued the following statement:

“Amazon’s announcement that Prime Day will extend to 36 hours beginning at 3pm est on July 16, ratchets up the pressure on all of retail, with ‘counter measures’ sure to negatively impact margins throughout the sector.

“More so than ever, we expect other retailers to roll out a heavy dose of promotions ahead, during, and after Prime Day in hopes of attracting shoppers and dollars, with some of the more challenged retailers facing the tough decision of how low to go.

“With Whole Foods now in the picture, we expect Prime Day promotions to extend deep into the food sector, pressuring food retailers for the first time.”

Doug Garnett
BrainTrust

My predictions:

  1. We will be bombarded with stories about how much was sold on Amazon Prime Day-and-a-half.
  2. We’ll never learn how much more profit Amazon lost by shipping products out the increased rate.
  3. The products that ship in the largest quantity won’t be retail competitive — but will be Amazon’s own tech products like Alexa.
  4. In the end, it will be declared a massive victory. In reality, who knows. Primarily it will have been a huge PR coup — although it’s not clear Amazon needs yet another PR coup.
Ricardo Belmar
BrainTrust
Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
3 years 3 months ago

Doug, I think you can add a #5 to your list:

5) Amazon will issue PR the next day announcing how many additional millions of subscribers Prime gained during the day-and-a-half.

Doug Garnett
BrainTrust

Can’t believe I forgot that one. You’re absolutely right … Thanks!

Ricardo Belmar
BrainTrust
Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
3 years 3 months ago
Let’s face it, if you’re a retailer, with over 100 million Prime members, odds are your customers are Prime members. For that matter, most retailers I know are Prime members, too, and they’ll be shopping on Prime Day just like the rest of us! What should other retailers do? Ride the wave, and treat this just like Black Friday. Create sales and promotions that run before, during, and after Prime Day while consumers are in a shopping mood. You won’t beat Amazon during those 36 hours, but you could at least gain some sales before and after. Don’t try to win on price alone, focus on your core products and deliver value against those. Try to leverage your loyalty program as Amazon does and offer special perks for those customers on these days. I’m sure we can expect record sales this year far eclipsing last year’s Prime Day. I also expect that the most popular products will all be Amazon devices (Echo, Fire TV, tablets, etc) and private label apparel products. That’s what this is… Read more »
Camille P. Schuster, PhD.
BrainTrust

For Amazon this would be a great opportunity for personalizing messages to consumers based upon the kind of products they search for and purchase. Last year, I quit looking for deals because it took too much time and effort to find something of interest.

Other retailers will have sales just like on Black Friday. However, summer may not be as good a time for people to focus on shopping. If it is, the sales will continue and the number of players will increase.

Stephen Kraus
Guest
Amazon has shown over the past two years that they increase their already industry-leading performance with Prime Day. Amazon gets about 60 million visits a day (!) in the U.S – that ranks it #5, behind four sites that ad-supported and less transactionally-focused (Google, YouTube, Facebook and Yahoo). And Amazon’s conversion rate is 8%, which is among the highest in the world. On Prime Day, their traffic surges by 65-70%, and their conversion rate rises to 11-14%. For Prime Day 2017, we saw evidence that people were staying up late the night before to jump on sales just after midnight – expanding to 36 hours may alleviate some of that pressure that consumers feel. And there is evidence that it generates new sales – not just pulling in sales that would have happened eventually. Even if it did just “re-distribute” sales from other time periods, that alone would be of value – remember that Black Friday got its name because that’s when retailers started making a profit for the year, and no company would prefer… Read more »
Min-Jee Hwang
Guest

We should expect Prime Day 2018 to be nothing short of Prime Day 2017. With an extra six hours of deals, new innovative marketing techniques, and anticipation from previous Prime Days, I expect that July 16 will rake in more sales and gain more Prime members than it has in years prior. Retailers competing against Amazon this summer should create their own anti-prime sales day by offering special deals on products and shipping methods. If you don’t require a membership for your service, advertise that as well. Retailers should try and offer unique aspects of their company that Amazon can’t provide, such as exceptional customer service.

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Braintrust
"Other retailers need to take advantage of the increased shopper attention over these days, even if it looks like they are conceding to Amazon."
"With the added perks and extended hours of Amazon’s Prime Day 2018, there is no doubt it will far exceed the $1 billion in sales from last year."
"Are we moving toward Amazon Year? It seems we are seeing something new, at least on a weekly basis..."

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