November 27, 2022

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What’s All the Fuss About Prime Day?

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How It All Started – the History of Prime Day(s)

The original Prime Day – created as a celebration of 20 years of Amazon in July 2015 – was truly just 24 hours long and promised a large volume of deals greater than Black Friday. In the past seven years, Prime Day has expanded significantly adding hours, participating countries and, most noteworthy, sales that achieve new milestones each year.

In 2019, more than a million deals were offered exclusively for Prime members, and Prime Day surpassed previous Black Friday and Cyber Monday sales combined. In 2020, Amazon invested nearly $18 billion to fund a “promotion that helped drive over $900 million in sales for small businesses in the two weeks leading up to Prime Day.” And in 2021, Prime members bought over 250 million items across nearly every category, along with the best in entertainment benefits and never-before-seen exclusives across Prime Video, Amazon Music and Prime Gaming. Prime Members and the savings were greater than any other Prime Day.

So, how did Prime Days 2022, held on July 12 and 13, play out?

The Lead-Up

Prime Days always garner lots of attention. With a massive build-up of television advertising, site callouts, reminders and specially marked Amazon packaging, Amazon does a remarkable job of highlighting the event. The lead in featuring small and mid-sized businesses and a Support Small Businesses to Win Big sweepstakes also helped to create buzz. Finally – the media itself generated a massive focus on Prime Days (what to buy, how good are the savings, etc. and what other retailers are doing during the same time frame).

The Offerings

As usual, electronics were a considerable part of Prime Days. Of course, the offers included Amazon-owned products such as Fire, Ring Doorbells and Echo Dots. Additional electronics like TVs, Smart Photo Frames and Air Pods also played a key role. A broad mix of items from air fryers to oral hygiene products (think electric toothbrushes and Whitestrips) were also prominent in the event.

Results

Members purchased more than 300 million items worldwide during this year’s Prime Day event. Total sales are estimated to have topped $12 billion, making this the most prominent Prime Day event in Amazon’s history. Prime members are estimated to have saved more than $1.7 billion (more than any previous Prime Day event).

This year was also the most significant event for Amazon’s selling partners – most are small and medium-sized businesses. All in all, Prime Day sales growth in 2022 was slightly higher than the increase seen in 2021.

Prime Day sales’ makeup was slightly different than in prior years. The economy changed the playing field to make for fewer high-ticket nice-to-haves and focus more on practical necessities. “This year, consumer spending was focused on household and essential goods rather than high-ticket items due to inflation concerns and a decrease in household savings. We may end up colloquially calling this Prime Day ‘CPG Day,’” says Melissa Burdick, president and co-founder of Pacvue, an online marketing consulting firm.

 

Impact on/Reactions from B&M Retail

Some retailers competed with Prime Days directly while others found ways to benefit from the “hype.” Of the 79 top retailers running promotions, only 35.7% offered products/deals that competed in some way. These included similar time frames and membership to access discounts. Notable heavy hitters Target and Walmart approached Prime Days differently this year. Target started early by offering deals beginning on Sunday, July 11, for various categories with discounts from 5% to 60% off. Its loyalty program was also highly visible with an emphasis on “no membership needed for deals.”

Walmart went the opposite direction – with no focus on its paid Walmart+ program. It simply called out a few items on its regular “Rollback” sales and promotion for 75% off school supplies. It appears that Walmart may have attempted to preempt Prime Days by creating its own event last month: “Walmart+ Weekend,” with discounts as high as 53% off, limited to members of its relatively new paid membership program.

“Total sales are estimated to have topped $12 billion, making this the most prominent Prime Day event in Amazon’s history.”

In general, Prime Days certainly bode well for online shopping (especially for traditionally slow sales days like Monday and Tuesday in the post-July-4th time frame), but it does not mean that brick-and-mortar retailers are out of play. Some retailers did experience a sudden surge in foot traffic during Prime Week. Target ran a competing promotion starting a day before Prime Day and experienced a 13% increase in foot traffic

This is in line with the recent surge in in-store shopping. While online grew in January and February 2022, the last several months have seen in-store making more gains and growing faster than online (year over year).

Shoppers will head to stores for the right product when it has the right price.

In general, it turns out that offering the right product at a good price during the right time – Prime Days – enables those with brick-and-mortar locations to use the hype of Prime Days to their advantage.

 

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Is This the Evolution of Christmas in July?

While shopping days are a given during November and December, the relatively new cadence of huge summertime sales is also beginning to “feel” as if it belongs. For many shoppers, Prime Days have become a way to start shopping early for products they know they’ll need later in the year, either for gifts or for themselves or their households. While it has not been termed Christmas in July – it certainly has similar benefits like a head start for shoppers and early sales/profits for retailers.

Prime Days has also created a much greater awareness of this “season of sales.” When consumers see all the messaging and news highlights not only about Amazon Prime Days but also regarding broader sales (and the right products to buy now), shoppers are much more likely to do a bit of research and potentially make purchases.  

The success of these “summer savings events” begs the question if new events will be added to the annual retail calendar. The answer is undoubtedly yes from Amazon’s standpoint. Business Insider and CNBC indicate that Amazon “is already prepping a second shopping event for Amazon Prime subscribers for later this year.” It is currently being called “Prime Fall Deal Event.” However, the timing has not been announced yet. “This fall event sounds like it could be more akin to a Prime Day 2.0, as both the summer and fall sales are expected to feature frenzied sales of TVs, sneakers and other items,” according to Business Insider.

 

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The Future of Amazon Prime Days

Given the success of Prime Days, it appears that Amazon (and other retailers riding the wave or creating their own occasions in similar time frames) will continue to capitalize on the “main event.” It also seems that Amazon will seek out additional ways to create similar events (be it focused on a single product category like beauty or a specific season). No matter the direction, brick-and-mortar retailers that keep their fingers on the pulse of Amazon can find ways to benefit from the prime cadence.

Sources:

Amazon Staff. “The History of Prime Day.” The U.S. About Amazon, June 25, 2019, https://www.aboutamazon.com/ news/retail/the-history-of-prime-day.

Young, Jessica. “Digital 360 Commerce Amazon’s Prime Day 2022 Sales Top $12 Billion.” Digital Commerce 360, 14 July 2022, https://www.digitalcommerce360.com/article/amazon-prime-day-sales/.

McCall, Peter. “Prime Day’s Impact on Brick-and-Mortar: Explaining the Unexpected.” LinkedIn, July 6, 2021, https://www.linkedin.com/pulse/prime-days-impact-brick-and-mortar-explaining-peter-mccall.

Risley, James. “Other Retailers Offer Plenty of Deals on Amazon’s Prime Days.” Www.digitalcommerce360.Com/, 14 July 2022, https://www.digitalcommerce360.com/2022/07/14/other-retailers-offer-plenty-of-deals-on-amazons-prime-days/.

Blackwell, Evelyn. “Amazon Is Reportedly Hosting a Second Major Prime-exclusive Shopping Event This Year.” WorldNewsEra, 27 June 2022, https://worldnewsera.com/news/tech/amazon-is-reportedly-hosting-a-second-major-prime-exclusive-shopping-event-this-year/.

 



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