By Maghan McDowell
with contributions from Vicki M. Young
 on July 13, 2016

Prime Day, the shopping holiday Amazon invented last year, drove a flood of new orders on what might have been a sleepy summer Tuesday, especially benefiting the Web giant’s own products and small businesses that sell on its platform.

Amazon said worldwide Prime Day orders were up by more than 60 percent, with an increase of more than 50 percent in the U.S. The Internet giant gave no actual sales figures, however.

Sales during the shopping bonanza last year hit an estimated $400 million. If the order increase translated directly into sales, that would have Amazon driving sales of about $640 million on Tuesday (although it could be higher or lower, depending on the amount of those orders). Some estimates had Amazon posting sales as high as $1 billion.

Despite all the hoopla surrounding the event — and Amazon’s bullish statements about it — the overall feeling was that Prime Day this year was far from a home run. Investors were unenthused, sending shares of Amazon down 0.75 percent to $742.63.

Research firm L2 found that apparel deals on Amazon didn’t tend to sell out, and of the clothing deals they tracked that ended before selling out, they sold through about 24 percent of their stock. L2 reported that at 3 p.m. on Prime Day, of the 600 or so active men’s and women’s clothing deals (out of 1,300 total), only about 13 had been 100 claimed before their allotted time ran out. It also found that of the 19 deals that sold out before they expired, 15 were for watches or sunglasses.

Still, while the online sales blitz does not yet have the traction Alibaba’s Singles Day does in China, it did increase interest in shopping broadly and boost overall e-commerce traffic. Prime Day was the biggest day on record for Amazon’s own devices, such as the Fire TV Stick (the most popular item overall), Fire tablets, Kindle e-readers and Alexa-enabled devices.

In addition to attracting more Prime members, who pay $99 for benefits such as free two-day shipping and streaming of movies and TV episodes — it’s estimated that there are about 46 million worldwide — Prime Day is a way to encourage shoppers to use the Amazon app. The company reported that more than a million customers used the app for the first time, and that Prime member orders on the app were more than two-times mobile app orders in 2015.

“When we look at how other retailers do promotions like Black Friday, they just want to drive traffic in,” said Edward Yruma of Pacific Crest Securities. “What’s so thoughtful about how they have architected Prime is that the things they give a discount on are ways to keep making money off of you. It’s a sale, but the intent is to drive focus on the things that they have been working on.”

Prime Day was also beneficial to the small businesses and sellers on Amazon, with the firm reporting that category saw orders nearly triple from last year. In a release, Amazon shared glowing quotes from sellers who said Prime Day resulted in their highest sales day ever.

Lead retail analyst Charlie O’Shea for credit ratings agency Moody’s said Amazon is unlikely to disclose dollar figures on sales volume for Prime Day. As for the whole point of the event, O’Shea said, “I think the intention is not to make money, but to get the word out to more people about Prime. It’s about showing people what Prime can potentially give them. The [Kindle] devices were heavily discounted all day. That’s a sign of Amazon trying to attract consumers to its content equation.” He explained that’s the “sticky part” in getting consumers to continue with their Prime membership.

O’Shea also said there’s been anecdotal comments from Amazon’s third-party sellers that the “price of admission for Prime Day was discounting merchandise by 20 percent, with Amazon getting a 15 percent cut of the sale as its fee.”

“It appears there were record sales days for retailers, but no one said anything about profitability. It’s a promotional day so profits are [typically] relatively thin. [Profits are] not why you do it. You do it as an investment. In the case of Amazon, it’s about attracting more members,” the analyst said.

He also emphasized that while there’s a lot of attention on Amazon and Prime Day sales, the growth results when put in perspective are still relatively small. “The context sometimes gets lost. If you look at this whole construct through the retail lens and not just the online lens, there’s still about 91 to 98 percent of sales in the brick-and-mortar world. You hear of 12 to 13 percent growth [online] versus 2 to 3 percent [offline], but that 2 to 3 percent means more than the 12 to 13 percent because the brick-and-mortar component is so much larger [than the online portion].”

The most popular item in the U.S., excluding Amazon’s own devices, was the Instant Pot 7-in-1 Multi-Functional Pressure Cooker.

It also looks like accessories were popular. Prime Day began at 3 a.m. Eastern time and in the first eight hours, members bought more than 196,000 pairs of shoes, and in the first 10 hours, Prime members ordered more than 26,000 watches. A deal on Ray-Ban Wayfarer Green Polarized Sunglasses sold out in four minutes.

The enthusiasm over the shopping day has spilled over into other retailers. According to data from HookLogic, which tracks e-commerce sites of those such as Target, Macy’s and Wal-Mart, Prime Day was not as big as last year for other retailers. “Most retailers decided not to go in heavy with promotion; Black Friday in July wasn’t the phenomenon that the industry expected,” said a HookLogic spokeswoman. “Sorry, no China Singles Day equivalent in the U.S. This probably says most other retailers didn’t want to promote an Amazon-led shopping day.”

Still, it did result in a bump in overall web traffic for retailers, with HookLogic reporting two- to three-times higher traffic than a typical Tuesday. Conversion rate was up 51 percent over similar days last week, and 48 percent up over Prime Day last year. “This means there has been less focus on blast-out promotion that drives low-converting traffic, but those who are shopping today [on Prime Day] are finding good deals and buying,” she said.

HookLogic also didn’t see this developing into a version of America’s Singles Day. “HookLogic’s interpretation,” she said, “is most other retailers didn’t want to promote an Amazon-led shopping day commemorating Amazon’s birthday.”

But the day after Prime Day, Wal-Mart sent out a promotion for free shipping with no minimum purchase through Friday and discounts on items ranging from a prepaid iPhone ($149 from $450) and a denim jacket ($8 instead of $12). “Wal-Mart offers more ways for every customer to save at a time when others are screaming one-day sales reserved for their most elite customers,” a spokesman for the retailer said.

HookLogic said the top traffic category on retail sites overall on Tuesday was apparel and accessories, while the top category in terms of conversion was health and beauty. Overall, while retailers saw a 13 percent rise in traffic compared to a typical day, it wasn’t the 75 percent they observed last year.

Although Prime Day is clearly a way for the e-commerce firm to drum up sales in the summer and attract more yearlong Prime Members, in addition to more customers of its in-house devices, it also transferred a bonus to customers. Members globally saved more than double on deals compared to Prime Day in 2015.

“Prime itself is the best deal in the history of shopping,” said Amazon Prime vice president Greg W. Greeley. “After yesterday’s results, we’ll definitely be doing this again.”