British online retailers are going to head-to-head to compete for business during a series of sale and clearance events timed to coincide with Amazon Prime Day.
Amazon’s Prime Day event is now well underway, with members of the retailer’s subscription-based Prime club having exclusive access to offers of up to 50% off over the course of the 30-hour event.
The annual event, now in its third year, showcases the retailer’s Prime scheme and its benefits, from free and fast delivery through to entertainment streaming. The retailer, ranked Elite in IRUK Top500 research, has worked to improve club benefits continuously as it moves away from a strategy of free delivery, to one of paid-for convenience – and messaging on the site focuses firmly on encouraging visitors to sign up for the Prime club to take advantage of deals during the event.
But leading retailers are taking Amazon on, launching their own sales to coincide with the Amazon event. The M&S [IRDX RMAS] sale starts today, while sales are also underway on the Argos [IRDX RARG], PC World [IRDX RPCW], Tesco Direct [IRDX RTSD] and John Lewis [IRDX RJLW] websites. Notably, these retailers are emphasising the benefits that most effectively enable them to compete against Amazon.
Argos, for example, emphasises its same-day delivery service,
while PC World boasts a day of subscription-free deals with free delivery or fast click and collect from store.
Greg Greeley, vice president, Amazon Prime, speaking ahead of its event, pointed to in-depth preparations. “Our teams have been working for months to source exciting and interesting deals, and our fulfillment centres are loaded with products, our operations associates are ready and our transportation partners around the world are waiting for the first Prime Day order,” he said. “This Prime Day, our Prime members will find hundreds of thousands of deals on everything they’re into – from beauty fans to bookworms and gamers to gardeners.”
The first deals in the event went live at 6pm yesterday, and Prime Day will run until midnight tonight. Among the products enjoying discounts of up to 46% are Amazon’s own technology devices that users employ to buy from the site in different ways, from the Kindle Paperwhite to a Fire TV stick with Alexa voice remote.
Businesses selling through the Amazon Marketplace are collectively offering 50% more Prime Day Lightning Deals than last: 40% of these deals will this year come from small businesses. The hope is that this group will improve on the 20m items they sold through the site on last year’s Prime Day. Latif Kothia, of Time2 Direct, sells consumer electronics and smart home technology on the site. He said that last year his company sold “more than 20 times the units we would expect to sell on an average day.” And Gayle Hunter of jewellery and lifestyle business Lifestyle Hunter said: “We’re expecting to outperform last year, where we saw a massive 250% increase on standard sales levels.”
Commenting, Alison Wiltshire, global practice lead of retail and consumer goods at BT Global Services, said: “Amazon Prime Day is an ideal opportunity for other retailers to ride on the coat tails of Amazon by leveraging the hype around it and maximising the opportunity to communicate to customers with personalised messages and offers to customers – the more personalised and relevant the offer, the greater the conversion rate.”
Craig Smith, VP of solutions and customer success at Amplience [IRDX VAMP], said: “Without a doubt, Amazon Prime Day has become a masterclass in new customer acquisition to the Prime service. This, in turn, generates loyalty that others wish they could emulate. However, while many subscribers will no doubt be delighted by the deals on offer, the purpose of Prime Day is to clear warehouse space and entice new Prime members into the fold. Nothing better demonstrates Amazon’s commitment to convenience, fast delivery and competitive pricing than a sales event of this scale.
“Competitors should be wary of taking Amazon head-on on price and convenience. However, if there is anything they should take from today, it’s the power of the subscription model. Amazon is dominating online retail because it enjoys a large, easily-reachable base of loyal consumers who have invested in the Prime subscription. That subscription motivates them to seek out offers and ensures they are pre-disposed to buying from Amazon, to maximise the value of their membership. Days and deals like Prime Day, Lightning Deals and Black Friday are an essential part of rewarding that investment and ensure they keep coming back for more.”
Meanwhile, ecommerce consultancy Salmon says 37% of online spending now goes through Amazon, and that is set to rise as 73% of consumers say they will do more of their shopping over the internet in the future. Over half (53%) of the international consumers it surveyed say they are more likely to buy from Prime than a retailer’s online store – and 60% say they feel same-day delivery should be offered by all online retailers, as Amazon does.
Some 57% of UK respondents to the study ranked Amazon as the market leader in ecommerce.
Hugh Fletcher, global head of consultancy and innovation at Salmon [IRDX VSMN], said: “Retailers need to consider a balanced strategy on how they compete or collaborate with Amazon. Amazon has seized the day. Put simply, they fulfil their customers’ expectations better than most other retailers in the market. As consumers increasingly look to service, speed and convenience – rather than brand – Amazon sets the standard that others must follow or risk being locked out. The whole Prime premise is built around providing a same-day or next-day delivery. Amazon has even created its own market peaks with its Amazon Prime Day. We call this “proactive peak formation”. Its purpose is to encourage Prime membership and keep customers ordering exclusively through Amazon and away from other brands. With companies like Tesco launching their own one-hour delivery service, we’re seeing other retailers looking to halt Amazon’s dominance.
“While many retailers are still struggling with establishing omnichannel strategies, Amazon is taking omnichannel innovations to the next level through its partnerships, delivery options and multiple interfaces, which is what retailers must do if they’re to survive.
“These findings unveil the harsh reality for retailers that need to wise up to the threat of Amazon and create strong digital services both quickly and to a high standard. Amazon is seemingly always ten steps ahead of other retailers, and its continued expansion into other markets demonstrates its intent to sew up every industry in sight. Retailers must ask themselves, are they happy to give up their interface, their data, their customer, and their future, and become just another brand consigned to history? Or will retailers revolutionise their own offerings to combat the likes of Amazon and secure their futures?”
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