Amazon Prime Day

What is the big deal?

Amazon Prime Day is an annual Summer sales event that offers exclusive deals to its Amazon Prime members. It began in 2015 as a 24-hour event to celebrate 20 years of Amazon and has been incrementally extending in length each year. Amazon Prime Day 2019 will be the largest one yet and the event will run for a full 2 days. Prime Day 2018 was the biggest day of sales in its history, with over 89 million visits logged.

The event takes place worldwide in any country that offers Prime membership; to access the lightning deals people must be signed up as Prime members BEFORE the event begins on July 15th (at a cost of  £79.00 a year). Prime membership perks include free access to TV and movie content on Prime Video, free Kindle books/magazines, member-only discounts and speedy delivery options.

Members-only club

Amazon comes under fire from its rivals for the exclusivity of the offers which are limited to members only. It’s largest U.S. competitor Walmart has openly stated they won’t be charging their customers to access their summer sales. But that’s exactly the point of the event. Amazon Prime Day is a highly sophisticated, multi-faceted strategy to increase Prime membership and the number of people using Amazon products that then connect to Amazon services across the globe. Unlike Black Friday or Cyber Monday, Prime Day is about all about Amazon.

  • Total Prime Day Sales 2015 – $415 million (CNBC)
  • Total Prime Day Sales in 2018 – $4.2 billion (Bloomberg)
  • No of Prime members in the U.S. (June) 2015 = 44 million
  • No of Prime members in the U.S. (March) 2019 = 103 million
scurri-ecommerce-amazon-prime-day-about

Prime membership, the gift that keeps on giving… to Amazon.

Prime membership is full of perks for its members but the benefits of Prime Day for Amazon go beyond a mid year peak in sales. The most obvious being the monthly or annual fee that provides Amazon with a regular revenue stream. The ultimate goal of Amazon Prime Day is customer acquisition and creating loyalty & retention. Amazon creates the perfect conditions to entice new members for the event so that afterwards the default for Prime members when it comes to shopping online. So when the non-Amazon centric sales events come around Amazon has increased its foothold dramatically on Black Friday and Cyber Monday etc.  

During Amazon Prime Day there are deals across the site from a host of sellers but the best-sellers are, of course, Amazon products, namely their smart home devices. each connecting to an Amazon service, whether it’s Prime shopping via voice or streaming music, video, audiobooks, or video games. Thus locking the consumer firmly into the family of Amazon-powered smart homes and its many services and away from their counterparts by rival Google. Embedding the brand deep into consumers day to day lives and that’s the real genius of Amazon Prime Day.

Black Friday is now twice a year for Amazon.

Spending during Amazon Prime Day is different to that of Black Friday though the tech bargains may make it look similar on the surface. Black Friday does not create new spending in the year but rather brings the pre-Christmas shopping forward to the last week of November. Prime Day, on the other hand, generates a peak in personal shopping and impulse buying that previously wasn’t there compared to normal summer sales.

The Competition

Over the years the number of companies rising to the challenge and creating rival sales on Prime Day has risen and this year competitor response is the largest so far. It’s estimated that 250 retailers will be offering alternative deals across the web.

For instance, Ebay’s summer sales announcement was littered with plenty of references to Amazon, their 3-week summer sale in July is ‘prime summer shopping season’ and will offer ‘even better deals if Amazon crashes again’, a reference to the fact that Amazon has a tendency to crash during the event.

The most notable among the rivals’ efforts is the alliance between Walmart and Google who have joined forces to offer deals from the start of July on Google home devices and other electronics, consumers can access these discounts before Prime Day and without needing a membership. They can even avail of free one-day shipping for select products. Prime Day is such a significant event in the retail calendar now that other brands have had to take it very seriously. No doubt that the increase in length each year is part of Amazon’s response to competitors. 

Where to next?

Amazon continues to shape the entire eCommerce industry by selling next level convenience to the consumer, giving the feel of complete personalisation. The company owns more than half of all e-commerce, and its fast-growing cloud computing and web advertising businesses make it one of the most powerful players in the tech industry. Voice recognition, facial recognition, high tech drone delivery vehicles and even the plan to launch satellites into orbit so that more of the world will have internet access than ever before.

Amazons initiatives mean that artificial intelligence, machine learning, and augmented reality are becoming more and more integrated into the eCommerce experience. And as a result, it’s retail competitors are forced to innovate and mutate in response to create new opportunities to inspire consumers and offer alternatives to the behemoth. For example, Instagram is now set to become a retail app rather than a social media platform which would give its 500 million users an alternative to the Amazon app. The tech and eCommerce landscape is shifting fast and no one is taking Amazon’s monopoly as a given.

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Author: Laura Roche, Marketing Executive, Scurri

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