Digiday Publishing Summit:

Connect with execs from The New York Times, TIME, Dotdash Meredith and many more

SECURE YOUR SEAT

Amazon’s ‘little gift’: How Prime Day helps other retailers

Prime Day is no longer just about Amazon. It’s now a way other retailers can reach customers while they shop for deals there.

Prime Day, which began three years ago, has evolved to a 36-hour online deal blitz beginning on July 16. Amazon uses it to reinforce the value of Prime membership, the $119 per year program that’s attracted 100 million members globally. If last Prime Day is any indication, large retailers will aggressively push competing offers.

For example, throughout July, Walmart, which pushes “free two-day shipping with no membership fee” is offering customers $10 off orders of $50 or more for pickup orders. Last year, Prime Day coincided with cut-price deals from other retailers, including Best Buy, which offered 40 percent off major appliances, and Macy’s, which took 60 percent off selected items.

“This is a little gift that Amazon has given the retail industry,” said Forrester principal analyst Sucharita Kodali. “It’s a random day in July when there isn’t a huge burst of demand, so any increase you’re going to see, even if it’s 3 or 4 percent lift [in sales], is a good one for a lot of retailers.”

For retailers growing their e-commerce strategies, Prime Day is important boost ahead of the back-to-school season. RetailMeNot, an e-commerce platform that works with consumer brands to promote offers and on customer acquisition strategies, said it’s seen a consistent uptick in the number of retailers adding deals that overlap with Prime day. Between 2016 and 2017, the number of retailers issuing deals on RetailMeNot.com increased 340 percent.

“It’s become a pivotal day that’s benefited Amazon as well as other retailers and speaks to the changing consumer,” said GBH Insights chief strategy officer Daniel Ives. “It shows how much e-commerce has changed with Amazon leading the charge.”

Prime Day has become the largest traffic driver to RetailMeNot.com in the third quarter, surpassing the back-to-school season, said Michelle Skupin, senior director of corporate communications at RetailMeNot.

Prime Day sales are expected to hit $3.4 billion this year,  a 30 percent year over year lift, according to retail think tank Coresight Research. It said it expects Amazon to focus promotions on its private-label products. While Amazon’s Prime Day lets competitors capitalize on the opportunity through competing offers like Black Friday and Cyber Monday, the similarity ends there, said Keith Anderson, svp of strategy and insight at Profitero. This is an Amazon-branded event, after all, and its core goal is to expand the Prime member base and build lifetime loyalty.

“For Amazon, the bigggest reason they do this is to drive new Prime memberships — that’s a formula of success that works for Amazon but for very few other retailers,” he said.

Despite Prime Day’s piggyback effect on competing retailers, and opportunities it offers them to acquire more customers, the uniqueness of Amazon’s Prime offering still gives it a leg up. While other retailers may compete on price, the Prime program’s unique bundle of benefits — including discounts at Whole Foods and online streaming video — is unparalleled in the industry, Anderson said. Although it may result in some follow-on sales, to truly compete with the likes of Amazon, retailers should be pairing the offers with ways to entice the new customers to make return purchases, he said. One way to mimic Amazon’s strategy is to add incentives for customers to sign up for newsletters, email lists or join loyalty programs, he added.

“There are a million ways other retailers can use the excitement of a day like Prime Day without competing symmetrically [with Amazon],” he said. “Amazon is taking proven promotional vehicles and tactics that they’re enhancing and adapting for the e-commerce age — most competitive retailers are not ready.”

Subscribe to the Digiday Retail Briefing: A weekly email with news, analysis, interviews and more covering the modernization of retail and e-commerce.

 

https://digiday.com/?p=294501

More in Marketing

Illustration of a social media post with hearts, showing a chat bubble with a dollar sign, purse, and shoe, representing how creators use automated marketing tools to monetize content.

In Graphic Detail: Inside the state of the creator economy industrial complex

The creator economy might have started out as an alternative to traditional media, but is becoming more and more like it as it professionalizes.

Shopify has quietly set boundaries for ‘buy-for-me’ AI bots on merchant sites

The change comes at a time when major retailers like Amazon and Walmart are leaning into agentic AI.

WTF is ‘Google Zero’?

The era of “Google Zero” — industry shorthand for a world where Google keeps users inside its own walls — is here.