Prime Day, the $5.8 billion sales bonanza is done and the overwhelming view from the retail industry is that it has provided not just a massive boost to Amazon’s sales, but has given something of a fillip to many other retailers as consumers get into a shopping frenzy.
While the bean counters are still a-counting, analysts at Coresight estimate that the event will bring in $5.8 billion this year, up from last year’s $3.9 billion thanks to the event being officially longer, being held over two full 24-hour days. The US will account for 60% of sales, believes the analyst, with non-US sales netting some $2.2 billion.
None of these figures, however, include any additional revenue accrued by Amazon from selling new Prime membership to shoppers wishing to partake. The true value of Prime Day won’t be known for a few days yet.
That said, the over-riding view – so far – from the world of retail is that there has been a degree of ‘halo effect’ on other retailers from the mid-summer, artificial sales peak, but that there are still great concerns about it forcing more discounting on an already squeezed industry.
“Frequently commentators attribute Amazon Prime Day’s dominance to three simplistic factors: speed of delivery, range of products and price point,” says David Blair, Global CEO of retail and brand consultancy FITCH. “However, there’s only so much that discounting can do for a brand, even one as powerful as Amazon.”
Michael Schirrmacher, Managing Director UK, Bloomreach agrees: “Why can’t every day be Prime Day? That’s the mentality all retailers need to have. Major discounting will certainly be a huge draw for Amazon, but other brands and retailers shouldn’t feel like they have to match price drops to be able to compete. It has to be remembered, every business competes with Amazon and the discount game is dangerous.”
However, while Prime Day 2019 is likely to have netted more money than ever-before, the wider retail industry is starting to view it as being in need of a revamp. With the whole industry talking about how to create experiences for shoppers, Prime Day leaves a lot to be desired on that front
Schirrmacher continues: “Shopping online should be an experience, one that’s both remarkable and memorable, but more importantly one that customers want to repeat In reality [every retail business] can perform better by focusing on what Amazon fails to do time and time again – emotionally relate with consumers. A great experience is about much more than price, it’s also about nostalgia, aspiration, desire, data, visuals cues, desire and demand.”
Schirrmacher believes that other retailers can capitalise on Prime Day and the halo effect, but that they have to box-clever. “The way to win against Amazon is to pick the right spots in which to excel in the aesthetics – understanding your customers and showing them you know them through the story your brand tells – and using data to get the right product in front of the customer at the right time – personalisation,” he says. “Using an AI-powered digital experience platform, for example, that listens and learns from customers to help them find exactly what they’re looking for in record time will clearly differentiate from the sluggish, catalogue style approach Amazon takes.”
Anthony Gavin, Regional Director Narvar EMEA agrees that technology holds the key to taking on Amazon, or at least trying to garner sales around Prime Day: “Prime Day has become a key date in the shopping calendar. While ‘out-Amazoning’ Amazon on this day, or the rest of the year, is near impossible, brands and retailers can get a slice of the pie by offering value beyond competitive sale prices and speedy delivery and this involves enriching their post-purchase experience. Capitalising on the honeymoon period, that’s the moments after a purchase, to share personalised, engaging and branded updates in the voice and tone of the brand is key to building something Amazon doesn’t with customers – emotional connection. To do this, brands like Robert Dyas and ASICS are using technology to take back control of the post-purchase communications from third-party shipping carriers brands and engage with customers directly.”
Is Prime Day losing its shine?
There are also naysayers that are starting to question what benefit the event brings to Amazon and, more particularly, Amazon Prime shoppers as delivery issues have taken some of the shine off the event.
More than ever before there are many questions over Amazon’s delivery service levels on Prime Day and perhaps how Amazon needs to rethink what Prime Day does – moving it from a mad bargain rush to something more inclusive and celebratory.
FITCH’s Blair again: “Amazon doesn’t even necessarily offer the fastest delivery times, especially during Prime Day – which has suffered well-documented issues with deliveries for some time. The key to future success is to avoid Prime Day becoming a ‘smash and grab’ shopping frenzy, but instead, be about inviting consumers to become part of a collective experience facilitated by the Amazon ecosystem – whether that’s through its voice assistants, payments technology or entertainment through Amazon Prime video.”
Blair believes that Amazon needs to look at how other retail behemoths carry out similar ‘peak days’ and look at how to turn Prime Day into something more user-friendly, exiting and satisfying for shoppers.
Blair says: “Look eastwards at Alibaba in China, which is doing this with its Singles Day spectacle. Singles Day has become a glittering celebration, drawing people into its physical stores and pop up locations with product launches, entertainment, technology demos and celebrity appearances, brought together by its simple payments technology, Alipay. This creates this ‘sticky’ experience that locks consumers in; why go elsewhere when it’s so easy and exciting to shop with Alibaba at this time of year? The figures also speak for themselves; last year Alibaba’s 10th annual Singles Day sale racked up $30.8 billion in sales, a new record, dwarfing Prime Day, which is estimated to have generated around $4 billion.”