The higher the price point, the steeper the discount — that was how Amazon celebrated Prime Day.
The e-commerce giant kicked off the shopping holiday to mark its 20th anniversary at 3 a.m. EST with thousands of promotions and a festive homepage that touted “more deals than Black Friday.” New sales were added in 10- to 15-minute intervals.
“Prime Day peak-order rates have already surpassed 2014 Black Friday,” said Greg Greeley, vice president of Amazon Prime. “Prime members have already bought tens of thousands of Fire TV Sticks, 35,000 Lord of the Rings Blu-ray sets, 28,000 Rubbermaid sets, and 4,000 Echo devices in 15 minutes. The Kate Spade purse was gone in less than a minute. We also sold 1,200 of the $999 TVs in less than 10 minutes. And there are thousands more deals coming.”
The promotion helped drum up sales during a generally slower month and highlighted Amazon’s Prime program, where members pay a $99 yearly fee for services such as free two-day shipping and free streaming movies.
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Prime members were courted with both Daily Deals and faster moving Lightning Deals.
Discounts ranged from 77 percent off “The Lord of the Rings: The Motion Picture Trilogy” to 66 percent off a Samsung 50-inch 4K TV. In the women’s apparel and accessories space, Lee denim shorts were 60 percent off, selling for $19.99, and a sterling silver Swarovski pendant was 69 percent off at $46.27.
Each deal had a certain number of units available and once those units were claimed, Amazon allowed consumers to join a wait list in case there were any cancellations.
“If you look at deals now, there have been a number that have been 100 percent claimed…which says they had tons of demand for those items,” said Steve Osburn, supply chain expert and partner at Kurt Salmon. As of 1:25 p.m. EST, 100 percent of the Amazon Echo and Amazon Fire TV Sticks were claimed, as were 99 percent of the Amazon Fire HD 9 Kids Edition and Amazon Kindle e-reader.
“[Amazon] will do better than others because they’ve been planning this for a while,” Osburn said. “I’d guess that most of these deals were preplanned with the vendors and that Amazon isn’t taking such a hit.” For instance, if Amazon is offering 50 percent off an item from Bose, there’s a high likelihood that Bose is absorbing some of that discount.
Electronics made up five of the top 10 Daily Deals and the average discount for the Top 25 Prime Day Deals was about 50 percent, said Katherine Wilson, director of marketing insights at Clavis Insight. Higher-priced items show up first and were typically from the electronics category.
She noted that there were some “healthy discounts” when it came to Lightning Deals in terms of clothing, shoes and jewelry as well as cell phones and cell-phone accessories.
“The feedback we’re seeing on social media is that the deals are selling out very quickly,” Wilson said, adding that as of 2 p.m. EST, about 37 percent of items were sold out with the option to join a wait list. “Some categories have more availability than others…[and] baby products, office products and software are three categories where inventory is already 60 percent sold out.”
Wal-Mart also kicked-off an aggressive summer sale today, unveiling thousands of “Rollbacks” from 50 percent off an RCA seven-inch tablet to a $50 reduction to an iPad Air. Despite Wal-Mart’s retail prowess, some expert said that Amazon, which backed the initiative up with substantial marketing and public relations muscle, will win today.
Whether that means seeing a higher amount of overall sales or just a larger percentage increase in sales, Wilson thinks Amazon’s numbers will be bigger than Wal-Mart’s.
Wal-Mart’s rollbacks, however, will continue on for an unspecified amount of time.
If Prime Day doesn’t lead to an influx of new Prime members or record sales, it might affect Amazon’s upcoming promotional initiatives.
“Because this was a big PR event, if it’s deemed unsuccessful it will be hard to do things like this in the future. It hurts their credibility when retailers like Wal-Mart and [e-commerce start-up] Jet are stepping up their game,” Wilson said.
On a larger scale, Rob Garf, industry strategist at e-commerce provider Demandware, said “the expansion of the ‘holiday season’ will continue with retailers offering earlier and earlier deals to one-up their competition.”
He said Amazon is looking to Hallmark’s playbook — creating a holiday to drive sales — but with an e-commerce angle.
But whether Amazon is able to use the day as a catalyst to meaningfully grow its base of Prime members or just see a slew of users sign up for a free 30-day Prime trial and opt out remains to be seen.
Amazon couldn’t be reached for comment.