With Prime Day Set, Amazon Expected to be Winner Once Again

Ready or not, here it comes the boom, again.

Amazon has announced that the third annual Prime Day will be held on Tuesday, July 11 … wait, check that, it actually begins on Prime Day Eve – another new shopping holiday – at 9 p.m. EDT, running for 30 hours until midnight the following day.

Does this mean that folks will start gathering to cook turkeys – or even hams – on July 10, in anticipation of the faux holiday? Or sitting in Whole Foods parking lots at 6 a.m., waiting for the door busters?

According to Amazon, new “lighting deals” will be offered as often as every five minutes. Prime Day has expanded to 13 countries this year, adding Mexico, India and China to the U.S., U.K., Spain, Japan, Italy, Germany, France, Canada, Belgium and Austria.

As the name suggests, Prime membership is a major focus of Prime Day. While there were lots of signups to the $99 subscription service in 2016, the Prime Day gains were not as strong as in 2015. According to data analytics firm Jumpshot, Amazon had twice as many Prime sign-ups in July 2015 as it did in the prior month. But in 2016, new Prime memberships were actually down 40% in July vs. June, according to Jumpshot.

“We weren’t able to determine if the change was a result of market saturation, increased competition from brands like JC Penney and Kohl’s announcing their own July sales promotions to compete with Prime Day or some other factor,” said Deren Baker, CEO of Jumpshot. “But if this is the go-forward trend and new Prime members are the goal, Amazon might want to revisit its Prime Day strategy.”

JC Penney in particular did a good job of drafting on Prime Day last year, Baker said, as its Penney Palooza sales event drove a 13% improvement in overall site conversions compared to its daily average for the month. But that was dwarfed by Amazon’s gains: the company saw its conversion rate jump 52% vs. the July average on Prime Day. Expect to see even more retailers creating “me too” sales events this year to leverage the midsummer shopping frenzy.

While hundreds of thousands of merchants have queued up their products for Prime Day to draw in the millions of shoppers on the hunt for great deals, the smart money is on Amazon to once again be the biggest winner. According to analysis by 1010 Data, only two non-Amazon items cracked the top 10 seller list for Prime Day 2016: the Instant Pot programmable crockpot (#2, behind the Amazon Fire TV stick) and a Sandisk memory card for gaming (#5). A look at the top 20 sellers in 2016, based on 1010 Data’s findings, was a bit more favorable to companies not named Amazon: 8 of them were from other sellers – half of which were Sandisk items – down from 11 in 2015.

In terms of demographics, U.S. millennials are the sweet spot for Prime Day, with 79% of them having made a purchase on Amazon in the past month, according to data from Yes Lifecycle Marketing, with Prime benefits cited by most of them as the reason why. Generation Z, however, is more likely to sit out Prime Day, the company found, with 31% reporting shopping at non-Amazon retailers because they enjoy the in-store shopping experience, more than any other generation. Overall, 63% of U.S. consumers shopped on Amazon in the past month, according to Yes Lifecycle’s data.

Amazon will make shopping easier by creating 20 product categories. Like the Prime membership push, it’s also heavying up on its growing dominance in voice-activated shopping. For Prime Day there will be more exclusive deals for users of Amazon Echo, Echo Dot, Echo Show and Amazon Tap, as well as compatible Fire TV or Fire tablet devices.

As flat-screen TVs were some of the biggest selling items in 2016, even though none of them cracked the top 20, Amazon is hoping to cash in on this popular category by offering the new Amazon Fire TV edition of the Element 4K set. Based on 2016 sales, Amazon is boosting TV inventories to meet anticipated demand and expected sell-outs.

Leave a Reply