Why Prime Day Makes Perfect Sense for Amazon

Content Manager

prime-day-295X90Why would Amazon launch its own shopping holiday?

Amazon is promising to offer more deals on Prime Day than it does on Black Friday, and the sales will be exclusively for Prime Members in the U.S., U.K., Spain, Japan, Italy, Germany, France, Canada and Austria.

Other than to celebrate its 20th anniversary, ChannelAdvisor co-founder and chairman Scot Wingo says there are at least two reasons Amazon would make July 15 Prime Day.

Wingo said one reason has to do with increasing its Prime membership base – a number that has not been disclosed by Amazon, but is estimated to be about 50 million worldwide.

On top of allowing Amazon to deeply test Prime member discounts, Wingo said the launch of Prime Day could help Amazon defend itself against up-and-coming competitors in the U.S. such as Jet.com.

Though Prime Day was announced by Amazon on Monday, July 6, just nine days before the sales holiday, Wingo said Amazon has been recruiting deals from third-party retailers for this event for some time under a non-disclosure agreement.

“We didn’t know that it would be called Prime Day until just recently,” said Wingo.

Joseph Jaconi, co-founder and general manager at mobile protective gear seller Tech Armor, said they had known for some time as there are promotions the company is promoting with Tech Armor products heavily discounted on Amazon globally.

“Not just Amazon.com, but also Amazon in the U.K., Canada, Italy, Japan, Spain, Germany and France,” said Jaconi. “This is an exciting event and you need to sell on Amazon to participate,” said Jaconi.

Wingo said merchants can take advantage of Prime Day without selling on Amazon, but thought that it’s unlikely that competing retailers will participate.

“What is more likely is tangential businesses like travel or financial will take advantage of the opportunity,” said Wingo. “For example, Prime members will get discounts on travel or waived credit card fees.”

Wingo added that he also didn’t think Alibaba would respond to Amazon’s Prime Day directly since it already has Single’s Day.

“Alibaba doesn’t have a membership program like Prime, and I think it makes sense for them to explore that option, they are a big investor in ShopRunner, which could be a harbinger,” said Wingo.

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