Will Amazon’s Prime Day set a new sales record?

Discussion
Source: Amazon
Jul 05, 2017
Tom Ryan

For its third annual Prime Day, Amazon is ramping up the excitement to again wallop year-ago levels.

The first Prime Day occurred on July 15, 2015 and appeared to be a one-off occasion to celebrate Amazon’s twentieth anniversary. Proving successful in boosting sales and attracting new Prime members, the retailer ran the event again on July 12, 2016. Adding more than 800 limited-time “Lightning Deals” in the evening, last year’s Prime Day sales rose more than 60 percent and exceeded Amazon’s Cyber Monday sales.

For 2017, Prime Day is set for July 11, but the official start is 9:00 p.m. eastern time on July 10 with new deals promised to arrive as often as every five minutes over the next 30 hours.  Said Greg Greeley, VP, Amazon Prime, in a statement, “This year’s Prime Day is too big for 24 hours — so we’re giving Prime members 30 hours to shop!”

With the addition of China, India and Mexico, Prime Day expands to 13 countries. Amazon Books, now comprised of eight physical stores, will participate for the first time.

A few deals on Amazon products — including discounts on Kindle Unlimited, Amazon Music Unlimited and Prime Pantry — started on June 29 when the details for 2017’s Prime Day were revealed. The event will also draw attention to Amazon products with the inclusion of Alexa-exclusive and Amazon Fire deals.

Prime Day helps Amazon drum up sales during the slow summer months, including those of third-party sellers on the platform.

Finally, the event drives Prime memberships as the deals are only available to members. While Amazon earlier this year indicated that it added “tens of millions” of new Prime members in 2016, concerns over Prime’s growth maturing are increasingly heard as its penetration continues. The most recent estimates say at least half of U.S. households have an Amazon Prime membership.

How competitors react will also be watched. Last year, even before its Jet.com purchase, Walmart offered five days of free shipping and deals in an answer to Prime Day.

DISCUSSION QUESTIONS: What has been the impact of Amazon’s Prime Day? How do you expect Amazon’s retail competitors to respond this year?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Funny that Amazon’s Prime Day (July 11) is the day before its participation in the Net Neutrality Day protest."
"Taking a time of year when shopping is generally NOT top of mind and bringing it to the forefront was a stroke of genius."
"Not only does Amazon know the right buttons to push; they are excellent at knowing when to push those buttons."

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17 Comments on "Will Amazon’s Prime Day set a new sales record?"


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Art Suriano
BrainTrust

Amazon continues to do a lot of things right and Prime Day is another one of them. However, it will appeal to their audience and not everyone. About half of the U.S. residents have a Prime account which is amazing, but that also means there’s the other half that does not. Smart retailers need to focus on that half, offering deals and opportunities to entice them to shop. And rather than chasing Amazon trying to compete on price, it makes sense for retailers to be creative and different and make their offers competitive by providing services that Amazon cannot.

Chris Petersen, PhD.
BrainTrust

In the age of traditional retail stores the old adage was that Christmas planning begins in July. In the age of Amazon, it can create an event in July that becomes as disruptive as Black Friday used to be.

Yes, all retail is about sales. Amazon will most certainly beat last year’s Prime event with the inclusion of more countries. If competitors react solely on the basis of price, they have taken the bait.

Amazon is all about ecosystem and Prime is at it’s core. The real factor to watch is whether Amazon can attract new Prime members when it already has penetrated half of the U.S. households.

Tom Dougherty
BrainTrust

Even if new Prime memberships are leveling off, each added member is a customer nearly locked away from the competition. The issue here isn’t the great deals, it’s the loyalty Amazon engineers. If competitors simply offer their own deals (and their own day), that’s not nearly enough. They must offer something greater than that because Amazon is quickly becoming the default choice.

Brandon Rael
BrainTrust

For the Amazon Prime members out there this is yet another opportunity to reap the benefits of membership. As the old 1980s American Express advertisement stated, “membership has its privileges.” For those who are already part of the Amazon universe this is a value-added experience, however for those who are on the fence about joining the Prime club the amazing deals and promotions may motivate them to join the community.

As far as retailers are concerned, the “Amazon effect” is far reaching and this one event won’t change the company’s impact. Retailers need to right their own ship, focus on driving a transporting customer experience, driving innovation and curating assortments, as well as building an empowered and incentivized brick-and-mortar associate team that will push consumers to their stores.

Ed Rosenbaum
BrainTrust

Not only does Amazon know the right buttons to push; they are excellent at knowing when to push those buttons. This year’s Prime Day will probably break the previous year’s records.

Lee Peterson
BrainTrust

What’s most brilliant about Prime Day is the timing. Taking a time of year when shopping is generally NOT top of mind and bringing it to the forefront was a stroke of genius, whether they knew it or not. It’s like the old “Blue Ocean” strategy idea: go where they’re not. And in July, retailers are so focused on bringing in new fall goods and just dumping the old stuff that the notion of have a blow-out extravaganza across the board seemed to catch everyone off guard. Except the consumer.

Should be their biggest day ever, hands down.

Lyle Bunn (Ph.D. Hon)
BrainTrust

Gosh, another retail campaign marked by a special day — how exciting! But it works. It focuses advertising, public relations and all staff efforts and becomes arm waving that moves dashboard needles while serving as a battle exercise that builds strengths for more demanding times. It’s no surprise that Amazon will take Prime out for a run to see what that baby can do. Watch for an ever increasing number of special events. Nothing fuels success like focus.

Celeste C. Giampetro
BrainTrust

Funny that Amazon’s Prime Day (July 11) is the day before its participation in the Net Neutrality Day protest. What better way to prove consumers want a free Internet than a bonanza day of shopping?

Ryan Mathews
BrainTrust

Amazon Prime Day is more than a marketing gimmick — although it’s a damn good marketing gimmick. It’s really a way, not just of getting a little more money out of shoppers, but of building relationships and community. And keeping things spicy is the key to lots of successful relationships.

I think we miss the mark if we see Prime Day as just another invented occasion to separate consumers from their cash. It is clearly that, but it is also a reaffirmation of identity and belonging to a strong commercial tribe. Can Amazon’s competitors create their own day? Of course. Can they create that same sense of consumption-based community? I don’t think so, at least not very easily.

Manish Chowdhary
BrainTrust

Amazon’s Prime Day is another great benefit for the Amazon community, not only for the members but for the sellers. What an opportunity to grow the Prime subscriber list and clear out excess inventory.
Each year, Prime Day changes just a bit and that can make it challenging for competitors to keep up.

Consumers will have the advantage on Prime Day with sales and promotions from Amazon competitors. Retailers will continue to respond to Prime Day with their own Summer sales/Christmas in July offerings, but it will be difficult to compete with a 30 hour Prime Day.

Alex Senn
BrainTrust
Prime Day is a great way to realize more sales during a slower time of the year. What I am surprised about is the unwillingness to include a lot of their digital content within the Prime Day ecosystem. We have heard a lot about the products being offered, but not a whole lot on digital content being offered up. I think if they did this they might see a whole lot of new eyes on their content hub which aren’t aware of it or haven’t considered it seriously. Also interesting about Prime Day is the response from other retailers, namely Walmart. They have done well to combat Amazon’s Prime Day, but they have not done enough for a “Walmart Day” as I was expecting to see in response to the first Prime Day. In addition to this Prime Day, I think retailers can learn a thing or two about how Amazon handles the selection of products. Many times the products they offer are actually loss leaders designed to hook people into their ecosystem. Most retailers… Read more »
Jackie Breen
BrainTrust

Amazon Prime Day is just another example of how retailers must continue to innovate to compete with Amazon. Amazon Prime on its own provides shoppers with two key loyalty factors: Convenience and Value. Layer on a day of great deals, and you have a recipe for success.

If retailers attempt to compete on price alone, they will see limited/short term success. Increasing loyalty is key to gaining (or taking back) market share when it comes to competing with Amazon. As I said before: retailers must innovate to compete. They must continue to identify and implement consumer experiences that set them apart from Amazon and not just on Amazon Prime Day, but throughout the year.

Ricardo Belmar
BrainTrust
I have no doubt with the added advertising blitz and additional countries included in Prime Day that this year’s event will outproduce last year’s sales. Amazon shows us they can once again do something with their brand that is not just unexpected, but also not expected or believable from other brands. They know how to pull our strings and make us talk about them every time. Would we be talking here about a “Walmart Day” or “Target Day” or even a “Kohl’s Day” event the same way we react to Prime Day? Other retailers need to realize they can’t just copy what Amazon does and expect the same result. Lowering prices or offering free shipping to try and draw in the “other 50%” that aren’t Prime members today isn’t going to create the loyalty or lasting relationship that Amazon creates with this shopping event. In many ways it reminds me of Singles Day in China and the success Alibaba has on that day. Singular shopping days are an effective way to concentrate sales and encourage… Read more »
Naomi K. Shapiro
BrainTrust

Has everyone fallen under Amazon’s spell without question? As Amazon Prime Day approaches (and I need to make some purchases), I wanted to check whether the Day would be a prime time to take an Amazon membership. A cursory search of the web brought me to an article on Wirecutter: “…The truth is, most deals in general aren’t great values and don’t save shoppers money. Some products may actually be priced lower at other points in the year, or manufacturers are looking to offload last year’s models…”

Another article showed that impressive sales deals were a very small percentage. Plus, the fact that I can’t compete with expert buyers who know how to find the best sales the quickest, and whether I even want/need the item on sale to begin with. So does the emperor have on any clothes or everyone smilingly assumes that Prime Day is so special?

Min-Jee Hwang
BrainTrust

Amazon has ultimately introduced another retail holiday in July with the creation of Prime Day. Retailers in the past have responded with their own sales and incentives, such as offering free shipping, in efforts to keep up. But it’s not all about the price. Prime Day is a way to increase Prime memberships but also rewards their current members and nurtures the relationships. For retailers’ responses to make an impact, they will need to do more than offer a lower price. Instead, they will have to provide real value in order to successfully pose a threat.

Jett McCandless
BrainTrust
Jett McCandless
Founder and CEO, project44
1 year 2 months ago

Prime Day is a great idea, but years past have seen less-than-stellar execution. It seems as though many Lightening Deals are just a way to clear out old, slow-moving inventory, and not necessarily stellar deals on products Prime members really want. There were countless articles written about past Prime Days stating that the deals, while a decent value, weren’t particularly attractive to most consumers.

Amazon is very receptive to feedback, however, especially where it relates to customer experience. I expect to see a much more valuable experience this year and, as a result, sales records are certainly possible, especially considering their growing user base.

Randy Hughes
Guest
1 year 2 months ago

Prime Day does bring focus to a traditionally low retail volume time of year, and will probably set new records. The broader issue is the “low cost producer” war shaping up between Amazon and Walmart, with significant collateral impact to everyone else. It is important for non-LCP participants to revisit their core value proposition and try to avoid the battle-front.

B&M retailers need to use the internet to drive store traffic and not get sucked into trying to compete for commodity product sales. Use Jet and Amazon as channels to drive targeted components of private label brands online, and further store visits. Those who get directly into the war for LCP will become casualties. Moving more “high-touch,” B&M can thrive, but their target audience must respond to the unique value they offer. (Amazon and Walmart offer low price as their primary value, and have the low cost back-end logistics to support it. That is a hard barrier for competitors in the low cost space.)

wpDiscuz
Braintrust
"Funny that Amazon’s Prime Day (July 11) is the day before its participation in the Net Neutrality Day protest."
"Taking a time of year when shopping is generally NOT top of mind and bringing it to the forefront was a stroke of genius."
"Not only does Amazon know the right buttons to push; they are excellent at knowing when to push those buttons."

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