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This post looks at the impact of Prime Day. Now that numbers have come back about the 6/21-6/22 sale, we can see the growth and long-term implications of Amazon’s shopping holiday. We also look at some of the tactics and strategies that they used and employed to understand what it means for retailers from now on.
To no one’s surprise, last week’s Prime Day was massive. It surpassed 2020s Prime Day when people were staging WWE matches for toilet paper. Less than a year later, with consumer’s wallets flushed with savings and cash, Amazon capitalized on the trend and moved even more revenue. Other companies had their own Prime day sales, but between Amazon, Walmart, Target, and Best Buy, Amazon won 91.6% of market share through the first 30 hours, according to Edison Trends. Prime Day didn’t just benefit Amazon. It also benefitted SMBs and the recent rise of Amazon store holding companies like Thrasio, where third-party marketplace sellers saw revenue rise nearly 60% year over year, topping $3.5 billion across 19 countries.
Growing their sales, Amazon didn’t just settle for push notifications, email reminders, listicles, and internet ads. Amazon focused on utilizing their new Amazon Live platform, keeping customers in the app to make more purchases. Amazon even launched Prime Day shows with Billie Eilish, Kid Cudi, and H.E.R., so UGC and YouTube views galore informed everyone of Prime Day. Then once users opened the app or site, they could see Amazon Live, with views for the promoted live streams hovering anywhere from 30k to 70k (typically, they’re in the hundreds). More shockingly, Amazon Live proved it could work as Sunday Riley, a face oil brand, had a live stream with YouTube celebrity Dr. Nina Ellis-Hervey. Subsequently, their product rose from spot #7,721 to #60 in the Beauty category, representing a 12,768% increase in sales rank, while a Nespresso espresso maker leaped from #89,692 to #21 in Home & Kitchen.
Amazon Prime Day Is Dystopian - The Atlantic
There is a cost to all the consumer benefits provided by Amazon and its Prime membership. The article showcases how Prime is so big that its revenue alone in 2020 was $25.2 billion, which is a 31 percent increase from the previous year and about three times the revenue of the entire NBA. It showcases how if consumers didn’t have such high expectations and demands for their products, things might differ for the Amazon fulfillment warehouse workers.
there’s no reason to require workers to scan a new one every 11 seconds until their discs bulge.
However, the article also fails to state or contextualize how robust and rapidly evolving the retail space has and will become. Malls are dying, retail jobs are going away, and most retail businesses operating in a storefront or mom-and-pop capacity cannot pay the $15 upcoming minimum-wage expectation with that business model. While that’s a more complex and complicated subject for a later time, it’s good to understand the human cost of Amazon Prime and Prime day.
Amazon is mimicking many of China’s online shopping strategies.
As Tik Tok and Instagram, and Shopify continue to work together to allow for easier commerce in their platforms, Amazon mimics what they see Alibaba has mastered in China. The shift in China from live streaming to live eCommerce has already happened and to huge success. Amazon, without the consumer apps like Taobao, is going straight to the consumer. eCommtainment is the next big thing for the west. The Chinese consumer has shown case what happens when you let the audience turn into a consumer by simply watching a live stream, chatting with other viewers, and then selecting and paying for a product—all at the same time. The removal of friction between entertainment and shopping is the next phase of retail innovation in America. Amazon proved on Prime Day it was leading the pack when Billie Eilish and Kid Cudi had a special concert for Amazon customers. Katy Perry coming on to hawk her new line of flip-flops. Amazon Live might be Amazon’s next sneaky multibillion-dollar profit line.
Amazon has made a new consumer holiday.
Regardless of if you bought anything on Prime Day, every other retailer had to host their own Prime Day to compete, and you may have benefitted from one of those items. Once an Amazon Achilles heel, luxury brands have now too succumbed to selling their products at a discount on Prime Day. Target had their own Deal Days starting on 6/20 - 6/22 (Amazon Prime Day was 6/21-6/22), with Walmart, Best Buy, and Kohl’s making their own sales. Amazon got this idea from China, where JD.com made a 618 day, celebrating the company’s founding; 618 day is the second-highest selling eCommerce day in China, only behind Single’s Day. Jack Ma, the charismatic CEO that went missing for a while and is now back but much less vocal, 9.9 festival, which kick offs wine buying every year for the first 9 days of September (because 9 in Mandarin is jiǔ and alcohol is jiǔjīng, so they sound similar) and has become a trained consumer behavior. Following the example set forth by Jack Ma and Liu Qiangdong, Amazon has successfully replicated their success in the Western world.
Since Amazon has become a critical infrastructure, every retailer needs an Amazon strategy as a component of their sales strategy.
In 2020, Amazon signed up an additional 30M people in the U.S. coupled with the already existing 112M members, and Amazon now has more Prime memberships in the US than households. To put that in perspective, Netflix only has 74M US members. Amazon Prime has double the number of subscribers of Netflix. Next time Netflix tries to release a James Bond competitor, they should give that number serious consideration. The benefits of Prime are extraordinary, as Amazon has changed the expectations of consumers. Items need to arrive overnight, with free shipping. If it’s a big item, you can pay few dollars and get it delivered on the same day. Prime also guarantees low prices and now a plethora of other products. With convenience, price, and speed, Amazon, through its Prime service, has broken the Iron Triangle. To break the iron triangle, Amazon has fundamentally changed the way business is done across various industries from retail, advertising, media, and logistics. Amazon Air has actually changed how veteran and logistics leaders now think about shipping and logistics. Many businesses will soon use Amazon’s shipping expertise rather than rely upon industry titans such as FedEx and UPS. Amazon hasn’t just changed books, shipping, retail, or computing; they’ve done something far greater, changing consumer expectations. With the most recent Prime Day, Amazon flexed its muscle and made it clear to all other retailers that in the west, we all live in an Amazon world. Competing with Amazon is a fool's errand, instead make a sales strategy that incorporates them.