Prime Day Huge For Amazon, But Rising Tide Didn’t Lift All Boats

Amazon had a massive Prime Day, reporting that the concocted shopping event was its biggest sales day ever, surpassing even its results on Black Friday or Cyber Monday. Overcoming some checkout glitches and other issues that led to widespread social media grumbling, the ecommerce giant said customer orders were up more than 60% vs. Prime Day 2015 worldwide, and by over 50% in the U.S.

However, some individual sellers said their results weren’t as off the charts as those of Amazon itself.

[RELATED: Amazon Delivers Another Prime Day Migraine]

Analysts estimated that Prime Day added $500 million to $600 million incremental sales to Amazon’s topline, with some speculating the company may have added 5 million to 6 million new Prime members eager to snap up one-day deals. It was also Amazon’s biggest day globally for its own devices, including the Fire TV stick, Fire tablets, Kindle e-readers and Alexa-enabled devices.

A number of major retailers were able to draft on the power of Prime Day on their own ecommerce sites. Companies like Target, Best Buy, Macy’s and Walmart saw up to three times more traffic than a typical Tuesday, according to ecommerce tracking company HookLogic, while retailers overall experienced a 13% rise in traffic. However this was down from the 75% spike they saw in 2015, HookLogic reported.

As it has leading up to Prime Day, rival Walmart has been promoting the fact that its deals are happening all the time, not just once in mid-July.

[RELATED: Deep Discounts Not Necessary for Prime Day Success]

“While we aren’t breaking out sales or providing updates outside of quarterly earnings, I can tell you millions of customers have been saving all month long on Walmart.com, and yesterday was no exception,” said company spokesman Ravi Jariwala. “They took advantage of savings for everyone that last beyond just one day.”

Jariwala said Walmart is featuring thousands of its trademark pricing rollbacks all month, as well as free shipping on Walmart.com with no minimum purchase, through Friday – a deal it announced the day before Amazon trumpeted Prime Day II.

Since last month, when Walmart offered a free 30-day trial membership in Shipping Pass, its unlimited two-day shipping program that competes with Amazon Prime, daily sign-ups have more than quadrupled, Jariwala said.

According to ecommerce tracking company HookLogic, conversion rates were up 62% on Prime Day vs. a typical day, suggesting there were good discounts available and that consumers were in buying mode, likely stimulated by comparison shopping Amazon deals.

In terms of social media reaction, 39% of overall sentiment around Prime Day was related to “sadness,” down from 50% last year, while “joy” reached 30% compared to 23% in 2015, according to Adobe Digital Insights. The findings were based on more than 4 million social engagements captured in July 2015 and July 2016.

Adobe found the main contributor to “sadness” later on during Prime Day 2016 was due to the preponderance of “odd deals” that started to surface, along with issues related to shopping carts and checkout. In 2015, Adobe found, more of that sentiment was tied to a lack of blockbuster deals.

Amazon.com registered 81.6 million mobile and desktop visits on Prime Day, according to Hitwise, a division of Connexity, down 6% from 86.4 million in 2015. The decline in visits didn’t necessarily mean fewer transactions, but could show customers are increasingly supplementing browser sessions with Amazon’s mobile app, Hitwise reasoned.

Some retailers contacted by Multichannel Merchant said while Prime Day was massive overall and a win for Amazon, it didn’t amount to much for them.

“It was a non-event,” said Laura Casciano, operations manager at Godiva Chocolatier’s facility in Allentown, PA.  “We planned for a huge day and ended up doubling the sales of a normal day, which is fairly low this time of year.” Casciano said Godiva did sell out of its Prime Day special item, which went online at 7:30 p.m.; there were six total items the company promoted as part of the event.

Ian McDonald, director of ecommerce at Silver Star Brands, said the company’s performance on Prime Day was “very strong compared to an average day, but not as strong as Prime Day last year” in terms of revenue.

“Our pricing and product mix didn’t appear to be where Amazon customers expected it to be,” McDonald said. “We weren’t as discount-centric as last year. There’s nothing that jumps out as problematic, like out-of-stock or technical issues or pricing.”

As a consumer, McDonald said he was unimpressed with Prime Day. “Last year I spent $400, but yesterday all I bought was a book for $8.99,” he said. “I didn’t see anything that compelling. I felt I came across lots of everyday stuff like toilet paper and kitchen knives. I was hoping for a watch or a kitchen gadget but just didn’t see it.”

An operations executive with an online seller of women’s shoes, who asked not to be named, also said Prime Day was not a big deal for his company. “We are on Amazon but not getting any kind of boost from Prime Day this year,” he said.

Colin Sebastian, a senior equity research analyst with Robert W. Baird, said Prime Day results from merchants were all over the lot, from some who saw a 2-3x increase in sales to those with less than stellar results. Most of the biggest activity, he said, was obviously deal driven, especially in cases where Amazon worked closely with sellers ahead of time.

But Amazon itself was the clear winner, having learned a lot from last year’s Prime Day and raised awareness of a sales event that wasn’t focused on a specific shopping holiday.

“Overall Amazon took a page out of what happened in China (and Alibaba) with Singles Day,” Sebastian said. “Beyond Black Friday or Cyber Monday, they now know that consumers will respond to good deals or the perception of good deals. They learned a lot last year in terms of planning, inventory and merchandising, which helped. And there is certainly a larger base of Prime members, who were marketed to fairly aggressively.”

As far as the perception of Prime Day as a yard sale for moving slower inventory, Sebastian said Amazon learned there, too, offering more desirable items like a Samsung TV exclusive alongside more mundane items like paper towels and catsup.

“Last year was more about freeing up inventory, but they learned from the feedback and mixed in deals on more products that were appealing to shoppers,” Sebastian said.

Mike O’Brien is Senior Editor of Multichannel Merchant

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