How much did Amazon’s Prime Day hurt rival retailers?
Prime Day 2017, Amazon.com has reported, was a huge success, helping the company and sellers on its marketplace achieve record sales. But what effect did the annual event have on those retailers competing with the e-tailing giant? The answer, it turns out, depends on whom you ask.
A new report by Sense360 shows that retailers, including Barnes & Noble, Best Buy, Home Depot, J.C. Penney, Kohl’s, Lowe’s, Macy’s, Sears, Target and Walmart, saw an average decline of 24 percent in store foot traffic during the 30-hour Prime Day event. To gauge Prime Day’s impact on foot traffic, the firm anonymously observed over 1.1 million visits to stores during 17 consecutive Tuesdays between March 7 and July 11, excluding July 4.
Seeing the biggest drop-off in traffic were department store retailers Sears (-36 percent), J.C. Penney (-34 percent) and Kohl’s (-31 percent). Macy’s was the least affected with a nine percent decline. Target (-28 percent) and Walmart (-23 percent) also experienced declines.
Decreases in traffic were most evident among consumers who have the Amazon app installed on their mobile phones. Traffic was down 32 percent among those with the app, while it slowed only seven percent among those who do not carry it.
Slice Intelligence, which analyzes data from a panel of 4.2 million online shoppers on a daily basis, found that rival retailers also saw their market share levels drop on Prime Day. J.C. Penney, which had a 0.52 percent share of the U.S. e-commerce market before Prime Day dropped to 0.14 percent while Kohl’s went from 0.61 percent to 0.35 percent and Macy’s from 1.8 percent to 1.0 percent. Walmart saw its share fall from 2.1 percent to 1.0 percent and Target declined from 1.5 percent to 0.9 percent.
While Amazon’s rivals may have lost sales on Prime Day, research by Liftoff, a mobile app marketing and retargeting platform, shows that many rebounded soon thereafter. The firm’s data shows purchases using non-Amazon shopping apps declined 12.84 percent on Prime Day. The effects were not long lasting, however, as purchases with non-Amazon apps peaked at nearly 71 percent two days following the event.
- Amazon Prime Day Drives Significant Decline in Foot Traffic for Big Box Retailers – Sense360/Globe Newswire
- Amazon Prime Day Impact on In Store Visits to Retailers – Sense360
- Prime Day 2017 Postgame Report: Amazon US Prime Day sales up 32 Percent – Slice Intelligence
DISCUSSION QUESTIONS: If you were competing with Amazon, how would you respond to Prime Day going forward based on the data shared in this article? Which retail channels (department stores, home improvement, mass merchandisers, etc.) do you think are currently most at risk when it comes to losing customers to Amazon.com?