Last year Amazon picked its own peak. Recognising that retailers enjoy different sales peaks throughout the year, they created their own artificial peak, opening up a fresh day of discounts exclusively to Amazon Prime members. It was an immediate hit. That success was replicated this year. Amazon sold more than $2 billion of merchandise on an otherwise quiet Tuesday in July. Where Amazon goes, retail follows, so we’ve picked out the key takeaways from Prime Day 2016 and have some suggestions for picking your own peak in the future:
The halo effect
In our recent research into Black Friday we saw that some retailers benefited from the surge in traffic on the day, even if they didn’t run associated marketing campaigns. This is also true of Amazon Prime day, where across the top 25 UK retailers, online traffic increased 22% year on year over the 24 hours, totalling 35.4 million website visits overall (SimilarWeb, July 2016). Savvy electrical retailers reaped the benefits of this by running concurrent marketing campaigns such as Dixons Carphone’s 10 day super sale (Retail Week, July 2016). Amazon themselves sold 90,000 TV’s on the day and the top 20 selling items were all within the electronics and computing categories. The halo effect on other retailers of this type is evident from the numbers, with Carphone Warehouse seeing a 47.4% spike in online traffic, Currys a 38% increase and PC World 20%. Retailers of this type should seek to piggyback off the big splash that Amazon Prime day makes with customers.
Lessons in loyalty
While a huge spike in sales is nice, Amazon also takes a longer view, describing Prime Day as a way of saying ‘thank you to its members’. Given the deals on the day are only available to these members, the retailer also saw a huge boost to their Prime program. With estimates that growth of the scheme was slowing down, and spending dropping, Prime Day provides a much needed boost (Time.com, Jan 2016). The value of Prime customers to Amazon is clear, with customers not only paying the monthly or annual subscription fee, but also doubling the amount they spend on the site after becoming a member (Deutsche Bank, 2015). Amazon knows how much these customers are worth to them, and has taken a calculated risk with Prime Day to acquire even more.
Get your tech primed for peak
Amazon Prime day was a lesson in the benefits of being mobile ready. Orders on its mobile app were up by 100% on the previous Prime day, with usage up by 35% overall (Fortune, July 2016). The combination of compelling offers and competitive prices, combined with a simple and smooth experience saw the app downloaded 75,000 times per day just in the US.
While they won on mobile, Amazon didn’t get everything right. Many users reported issues with checking out, such as not being able to add to cart, with #PrimeDayFail trending on Twitter. This emphasizes the need to test out functionality ahead of big events, as well as have a contingency plan should problems occur. Luckily Amazon were largely able to avoid a #PrimeDayFail this year, by resolving issues quickly, with positive social sentiment outnumbering the negative by the time the day was over.
Your very own Prime Day?
While retailers, and especially those in the electronics space, can ride the coattails of Amazon to an extent, some have looked toward creating their own discount days. While Amazon targeted the summer doldrums, another approach has been to focus on a different peak that’s more relevant to your products. A great example of this is Walmart’s garden ‘Black Friday’ which they held on the first day of Spring. This season is one of the most important for Home & Garden retailers, and our research shows that there is a significant peak in traffic to be taken advantage of for these types of retailers. Others simply seek to ape the success of Prime Day, but extend the promotions to a longer period, much like ‘Black Friday’ has evolved into ‘Black November’. The most recent example of this is retailer Jet.com launching their ‘big cart birthday bash’, an 11 day discount bonanza to mark its one year anniversary (Time.com, July 2016).
As more players enter the discount day game the impact on the traditional Q4 peak will be felt across the industry. What hasn’t changed is the need to do what’s right for your brand and your customers, whether that’s creating your own seasonal event, participating in an industry wide day alongside your competitors, or opting out altogether.
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