Merchants Looking to Strike Gold Inside, Outside Prime Day

“Here … we … go.” – Heath Ledger as The Joker in “The Dark Knight”

As Amazon Prime Day 4.0 is set to start at 3 p.m. EDT on Monday and run for 36 hours into Tuesday, merchants are making last-minute preparations on ads, promotions, pricing and Prime eligibility to take advantage of an extended ecommerce holiday projected to grow by 40% to $3.4 billion.

Others, however, are looking to make hay outside of the Amasphere, creating their own deals and events in an attempt to ride the tsunami of buyer excitement. Target for example has a counter-event on July 17 with a ton of deals, looking to steal some of the thunder.

Prime Day is continuing its march around the globe, adding four new countries – Australia, Singapore, the Netherlands and Luxembourg – to the existing list of the U.S., UK, Spain, Mexico, Japan, India, Italy, Germany, France, China, Canada, Belgium and Austria, bringing the total to 17.

eBay is firing back at Prime Day with deals priced at $119 and up – the annual cost of a Prime membership – “with no membership required,” an obvious shot at its rival. Other retailers are drafting on the buzz, with some creating clever spins like JC Penney’s Penney Palooza and Sur La Table’s Lime Day.

Finding ways to capitalize on the increased web traffic and sales momentum is a key way merchants are looking to fight back against Amazon’s two-day onslaught.

Integrating Whole Foods

Since Amazon purchased Whole Foods just prior to Prime Day 2017, it’s had a year to integrate and enmesh the popular upscale grocery chain into this year’s event. For starters, Amazon is offering all kinds of deals at Whole Foods for shoppers who are Prime members, including a week’s worth of 10% cash back at Whole Foods with a branded Visa card, offering a strong enticement for sign-ups – a main focus of Prime Day.

“Amazon is taking advantage of this opportunity to promote its online grocery business, its private label brands and extend Prime membership to Whole Foods shoppers,” said Sylvain Perrier, president and CEO of Mercatus. “Amazon will also use Prime Day to not only boost loyalty participation rates but also test price sensitivity and elasticity across a myriad of products in preparation for the holiday season.”

Perrier recommended merchants respond with price matching promotions or digital campaigns to attract and retain shoppers, but it would be risky to do it prematurely. “The best course of action will be to time your offers at shoppers when you know they will be searching for bargains on Amazon and conducting limited price comparisons on other sites,” Perrier said.

John Larson, author of the book “Capturing Loyalty” and an advisor to top brands, said he sees a strong likelihood of lots of Whole Foods customers converting to Prime next week, based on the reservoir of goodwill the grocer has built up with them.

“I watched ‘The Godfather’ this weekend and in the last scene, Barzini and others want to break off from the Corleones and Don Corleone says in effect, ‘Trust Michael, I have faith in him, you should have faith in him too,’” Larson said. “That’s what going on here. Whole Foods is saying, ‘Trust us, Amazon is a good player, we wouldn’t be affiliated with them if we weren’t a strong believer in what they do.’ And it will work. If you had two lousy brands, it would be a complete waste of time.”

Optimizing Ad Campaigns

Because Amazon advertising has been shown to increase ad-assisted sales by as much as 125% on Prime Day, Alison Held, Product Manager for ChannelAdvisor, recommended reviewing campaigns to ensure appropriate budget and bid amounts based on the increased activity.

“Optimize your campaigns now for negative keywords that are resulting in spend without conversion,” Held said. “Also fine-tuning your pricing strategy with tools like algorithmic repricers and automated price managers can help ensure you’ll beat competitors on product pricing while still protecting your profit margins.”

Also, product content should be fully optimized. “Following best practices for keywords, titles, descriptions and images is one of the best ways to ensure your promotions and products will stand out during Prime Day,” she said.

Voice Playing an Increasing Role

As Amazon made Alexa devices a major focus of Prime Day 2017, expect voice to play a major role this time around as customers have become more comfortable with it, said Luke Starbuck, vice president of marketing for Linc. He added others must do the same, recognizing new opportunities to connect and sell via conversational commerce.

“Expect more Alexa-specific Prime Day deals this year as Amazon strives to make voice purchases more ubiquitous across its Prime membership,” Starbuck said. “While brands may have a difficult time fighting Amazon head-on on Prime Day, they can take advantage of Amazon’s efforts to increase the adoption of voice and work towards meeting customers in this channel during Amazon Prime Day and beyond.”

Merchants Create Deals Outside the Amasphere

Jeff Cohen, CMO of Seller Labs, advises merchants to run discounts even if they don’t have an official Prime Day deal.

“Buyers will be looking for deals and if a product isn’t on sale they will buy it at another time,” Cohen said. “If brands do have an Amazon deal and have external traffic from email and social media they should drive that traffic there. Competition in the marketplace will be fierce and it’s most effective to send loyal shoppers to your Amazon page on the day when it matters most.”

Cohen also said merchants should take a second look at photos and use infographics to describe product features. “Infographics work well because mobile shopping is increasing and shoppers make buying choices based on photos and images,” he said.

Kantar Consulting listed the following themes to watch for during Prime Day 2018:

  • An emphasis on private label items and exclusives, especially through/for its devices
  • Going beyond an online-only occasion by incorporating its expanded brick-and-mortar network (for example, “Unboxing Prime Day”)
  • More rewards for its most active members, such as double rewards for cardholders or rewards for sharing Prime Day deals on social
  • The further targeting of underpenetrated demographics, including benefits tailored to lower-income or older shoppers or potential members from new countries

Cyber Monday in July?

Erik Morton, senior vice president of strategic development for CommerceHub, said Prime Day has grown well beyond Amazon, morphing into a general ecommerce event due to its gravitational force, even signaling a new, earlier start to the back-to-school season.

Right on cue, Amazon today announced a ton of back-to-school and off-to-college deals as part of Prime Day. It said a third of shoppers for those items did so during Prime Day 2017, with half of them planning to do so this year, based on a June poll from the National Retail Federal and Prosper Insights & Analytics.

“Longer term we definitely believe Prime Day will become a broader ecommerce holiday, almost like Cyber Monday in the summer,” Morton said. “Brands and other retailers who don’t necessarily want to participate in high-volume sales on Amazon are taking the opportunity to ride their coattails on their own sites, when there is a great deal of interest and lots of consumers out there shopping.”

As they’re hunting down the hottest Lightning Deals, Morton said shoppers “will still be into other channels, looking on Google, having more of an eye out in their email as well to see what other retailers and brands are doing on the same day.”

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