If summer traffic and sales were what Amazon.com Inc. and Wal-Mart Stores Inc. were trying to drum up with dueling deals last month, then they appear to have succeeded in terms of sales and user acquisition.
Amazon’s July 15 shopping holiday, dubbed Prime Day, prompted plenty of negative press and social media rumblings, but drove sales that were 2.3 times a typical day on the marketplace, according to data Millward Brown Digital will release later this month. Similarly, Wal-Mart’s competing rollbacks helped deliver online sales that were 2.2 times the chain’s usual take for that day, although the retailer’s price promotions lasted longer.
It’s still not clear, though, how profitable those extra sales were given that they were driven by lower prices.
But Amazon also saw the amount of Prime sign-ups quadruple in the month leading up to Prime Day. In the week before the sales blitz, visits to Amazon’s “Prime Pantry” portion of the site grew tenfold, said Millward Brown. Wal-Mart saw success, too. Between July 7 and July 15, visits to Wal-Mart’s rollback pages increased 30-fold.
“The surprise was the halo effect that Prime Day had on other retailers and seeing that increase in activity on Wal-Mart and Best Buy,” said Jason Caine, vice president of retail and consumer products at Millward Digital Brown.
“There was maybe some misaligned expectation in terms of what consumers were expecting — in terms of Amazon comparing it to Black Friday — but I think Prime Day was as much about promoting and selling the Lightning Deals as it was to showcase the benefits of being a Prime member,” Caine said. These benefits span Amazon Home Services, Subscribe and Save, and Prime Pantry, which for a flat rate delivers a box of grocery items.
Beyond sales, Caine said the success of the inaugural Prime Day was “more an indication of Amazon’s ability to move markets,” based on the amount of publicity the company was able to create around the event.
“It’s the start of creating some habits that might become sticky,” he said, adding that he’s eager to see if the launch of Wal-Mart’s own subscription service in the coming months will have an impact on the retailer’s online sales. To date, only about 3 percent of the chain’s business comes from e-commerce, according to estimates.
While there was a considerable sales bump, when looking at the breakdown of online purchases for Amazon, Wal-Mart, Target Corp. and Best Buy Co. Inc., Amazon’s share of daily purchases online didn’t waver much on Prime Day. The marketplace commanded 93 percent of purchases, with Wal-Mart making up 5 percent of purchases and the rest coming from Target and Best Buy. In the week leading up to Prime Day, Amazon averaged 91 percent to 93 percent of daily online purchases.
This is markedly higher than Amazon’s share of sales during historical online shopping holidays like Black Friday and Cyber Monday, where Wal-Mart, Target and Best Buy eat into Amazon’s lead. Although Amazon still dictates the majority of e-commerce sales for these days — 71 percent and 78 percent of sales on Black Friday and Cyber Monday, respectively — it’s substantially less than its Prime Day advantage. Caine predicts that Amazon drives more than 90 percent of sales for this group on a typical day, excluding shopping holidays with strong brick-and-mortar presence such as Black Friday.
But there could be a downside. Caine noted that a possible sales slump might loom in the near future. Similar to what’s become known as the “holiday creep” — or holiday sales starting earlier and earlier every year — Prime Day’s activity might result in a “hangover” later on. If consumers pulled forward their consumer electronics purchases, for example, that might result in a drop off in buying activity in the coming weeks.