Amazon makes it harder for retailers to ride Prime Day’s coattails
Amazon will once again unleash a barrage of eye-popping deals in July for its second annual Prime Day promotion and savvy retailers are preparing now for an expected surge in traffic even as the ecommerce giant takes steps to prevent competitors from riding on its coattails.
While Prime Day will be repeated in mid-July, no official date has been announced yet, making it difficult for retailers to launch their own promotions to coincide with Amazon’s and benefit from the excitement. Not letting consumers know until the last minute when the event will take place will also likely make the already mobile-driven promotion even more smartphone dependent.
“It remains to be seen how other retailers will fare from Prime Day 2016,” said Jon Reily, vice president of commerce strategy at Razorfish. “Since a date has not yet been announced, the opportunity for other retailers to react in a timely fashion will be more difficult.
“There will almost certainly be many ‘one day sales’ announced once the date is publicized or leaked,” he said. “Being that Amazon’s 195 million unique visitors per month will be easily reachable with short term information, it is probably in Amazon’s best interest to keep the launch date close to the chest for as long as possible.
“Amazon is well known for their targeted ‘leaks’ of critical information, however I don’t expect that will be the case this time around.”
Retailers have long wished for a summer sales event that could rival Thanksgiving weekend for whipping up shopper excitement and take some of the doldrums out of purchasing volume during the summer months.
Prime Day was heavily publicized last year by Amazon, which celebrated its anniversary by promising Prime members more deals than on Black Friday. A number of retailers quickly followed suit and promoted their own sales events to coincide with Prime Day. As deals on Amazon sold out or shoppers were waitlisted, this gave other retailers an opportunity to grab a sale from Amazon.
“Last year’s Prime Day was a retail industry-wide win – not just an Amazon win,” Mr. Reily said. “However, it may be a slippery slope for other retailers to continue riding the tails of Prime Day.
“Retailers have been thirsting for a mid-summer purchasing day for decades but following Amazon’s celebratory sale, of its own founding, may not be the best long-term strategy,” he said.
With Amazon already seeing a significant percentage of traffic and sales coming from mobile, numbers that typically climb even higher for special sales events, Prime Day is likely to be a big success on mobile.
The mobile aspect of the promotion is likely to be driven even higher by the fact that Amazon has not announced an official date yet for the sales event and could continue to hold tight to this information. This means consumers will not be able to plan as much for the sale and are likely to browse the deals from their phones when they get a minute.
A new development this year could be Amazon’s digital home assistant Echo, which has picked up steam this year and could make it easy for shoppers to complete purchases without having to pick up their phones.
“Mobile penetration in ecommerce continues to grow and Amazon is heavily investing in mobile shopping, both in its app as well as its Internet connected device, Echo,” Mr. Reily said. “It will be interesting to see what commerce numbers come from purchases via Echo this Prime Day, as shopping by voice is an emerging mobile category.”
Retailers need to be prepared for a jump in traffic on Prime Day and higher-than-usual demand for some items. Some shoppers may also decide that they do not want to wait for mail delivery, so this would be a good time to push buy online, pick up in store programs. Letting shoppers know what inventory is available in local stores could also help grab sales.
Last year, after the announcement of Prime Day, many retailers including Walmart and Target created their own sales to try and compete with Amazon.
The move paid off, with estimations suggesting that the promotions added to total retail sales in July 2015 for the retailers, per Mr. Reily.
This year, Mr. Reily expects Prime Day will be second only to the previous Prime Day and perhaps Black Friday in terms of sales. Without an anniversary to celebrate, Amazon is likely to pull back on advertising around the event, which will impact its overall size.
“During the 2015 holiday season, Amazon reported that fully 70 percent of its shoppers used mobile to make a purchase, so it safe to day mobile will play a big role on Prime Day,” said Wilson Kerr, vice president of business development and sales at Unbound Commerce.
“With over 40 million Prime members in the U.S. alone, Amazon is making $4 billion a year on just the fees and the average Prime user spends more than twice as much annually on Amazon that a non-Prime customer,” he said.