4 Key Takeaways from Prime Day 2017

amazon-prime-day-2017 730x280.jpgIt seems unbelievable now, but two years ago, Amazon’s inaugural Prime Day was widely panned.  Trending critical hashtags were abound, including #unhappyPrimeDay, #AmazonFail, #gobacktosleep, and, of course, #PrimeDayFail, Entrepreneur magazine described the day as a “PR nightmare,” and comedy website Funny or Die joined in the mockery, compiling the snarkiest, and well, funniest social media reactions from consumers on the day the e-commerce giant failed to “deliver the incredible sales it promised.”

Boy, what a difference a few years make.

By all accounts, the third annual Amazon Prime Day, running from 6pm, July 10th through July 11, was a runaway success. 

According to CNBC:

“Prime Day sales grew by more than 60 percent from the same 30-hour window in 2016, with a "record number" of Prime members shopping across 13 countries, Amazon said. It added that "tens of millions of Prime members" rang up purchases during the event, up more than 50 percent from last year's shorter Prime Day.”

Additionally, according to Amazon, more new members signed up for Prime on July 11 than any other day in the company’s history; which is important: Prime members are incredibly value to Amazon, as, according to Statista, they spend an average $1,300 per year on the site, whereas non-members spend just $700.

This, in fact, is the singular purpose of Amazon Prime Day. 

From Retail Dive:

"Once consumers try Prime, 73% become paid members. And after that first year, retention rates stay in the 90%. Prime Day started as a one-day anniversary sale — a common sales tactic deployed by many retailers. But it has grown into arguably the most successful loyalty campaign ever created."

This week’s results leave little doubt Prime Day will continue to dominate July for the foreseeable future.

Here’s what it means to retailers:

1. Know your customers, on their turf

Obvious, I know, but nevertheless worth mentioning. Amazon’s first Prime Day was widely criticized on social media by consumers, and so, the company worked to understand exactly why customer perceptions were misaligned with the actual sales event. The result?  Three years later, sales records are shattered and no trending hashtags in sight.

And of course, knowing your customers means…

2. Targeted deals are very important

Amazon worked diligently to bring targeted products to consumers.  According to Retail Dive:

“On Prime Day, Amazon was strategic in its selection of products and categories to feature, and grouped them by “most-shopped themes,” such as items for pet lovers, gardeners and kids. The most popular themes on Prime Day were those for home Chefs, techies and “for the home.”

Electronics, toys and even apparel were called out in Amazon’s press release Wednesday morning. Amazon tends to create bulleted lists of specific best-selling items to illustrate the vast volume of goods moved in any given event.

The results speak for themselves.

3. You can’t compete, but that's ok

Many big name retailers (Target, Walmart, JCPenney,  etc.) attempted to cash-in on the Prime Day shopping bonanza, but proved largely unsuccessful. The reason? It’s in the name.  For now, the vast majority of customers still (understandably) associate Prime Day with, well, Amazon Prime.

And sure, that very well could change in the coming years, and Prime Day could evolve into a midsummer equivalent of Black Friday. But for the time being, competitors would be better offer inventing their own sales “holiday” rather than trying to piggyback off of the success of Amazon’s.

And speaking of Black Friday….

4. Black Friday is all but dead

In this age of retail, once-a-year sales events seem antiquated. As Prime Day continues, and more and more retailers attempt to make headway — Toys R Us, Macy’s JCPenney, Lowe’s, and Best Buy were all retailers who offered deep discounts this week — it seems less and less likely that Black Friday will hold the same cache with consumers.

 

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