Here comes the Amazon Prime Day juggernaut.
Prime Day is expected to ring up a record $3.4 billion in worldwide sales, crushing last year’s estimated $2.4 billion in sales. But the comparison isn’t really valid since the event will expand to 36 hours on July 16 and 17, from 30 hours last year; roll out to Australia, Singapore, the Netherlands and Luxembourg, and brick-and-mortar for the first time at Amazon-owned Whole Foods Market stores; offer 50 percent more spotlight deals that can be accessed in more ways than in the past, and a longer promotional period, or “retail creep.”
While the 2017 Prime Day bested 2016 sales by 60 percent, last year’s event fell short of Cyber Monday, the single biggest global shopping day in Amazon’s history, partly due to the fact that Cyber Monday appeals to a broader base of consumers, while only Prime members are eligible to shop the event’s deals. Yet those who don’t have the $119 annual membership can still participate in the savings with a 30-day free trial, which can be canceled before the subscription is over. Amazon is pushing the free trial to get more eyeballs for Prime Day, and ostensibly to increase membership.
Amazon doesn’t disclose figures for revenues generated during Prime Day, but Coresight Retail estimated a 40 percent increase to $3.4 billion globally over Prime Day 2016 sales estimates, based on sales estimates for the three years to 2017 from sources Digital Commerce 360 and Internet Retailer.
More than one million deals and an almost single-minded focus on its own devices and private-label categories has caused grumbling from Amazon’s third-party sellers, which say the digital giant is shining the spotlight on its own products and leaving theirs in the dark recesses of the web site.
The Seattle-based e-commerce giant on Monday attempted to quiet the criticisms, citing proprietary research that found “thousands of SMBs [small- to-medium-sized businesses] last year did more than $50,000 in sales, which allowed them to grow their businesses, create new jobs, and invest in their communities, and more than 20,000 SMBs in 2017 surpassed $1 million in sales, thanks in part to Prime Day.”
Similar to this year’s event, promotions during Prime Day 2017 were focused on hard-line products, such as electronics, including the bestselling Echo Dot Amazon device, which was also the best-selling device by any manufacturer, and on its own apparel brands, including Amazon Essentials, Buttoned Down men’s shirts, Lark & Ro women’s wear, and Mae lingerie, which dominate the deals in fashion.
“Apparel is the dominant category in Amazon’s private-label offering, and it appears to be growing,” said Deborah Weinswig, chief executive officer of Coresight Research. “Amazon is pushing further into apparel and footwear while its private labels in grocery categories like food and household care remain limited, and in beauty and personal care, Amazon offers just two private-label products.”
Amazon’s key offerings will include twice the number of deals on Echo, including Echo Dot, $49.99, reduced to $29.99, said Weinswig, adding that its emphasis on the suite of Echo devices is a response to the surge in competition in the smart speaker, smart home space from firms such as Google and Apple.
Expected to be popular is Echo Look, which was introduced last month and helps fashion-minded consumers keep track of and organize their wardrobes and doubles as a personal selfie device, while using computer vision to tell consumers which outfits look best on them, among other features.
“There is substantial interest in Prime Day among consumers,” Weinswig said. “In the U.S., 76 percent of online shoppers are very likely or somewhat likely to visit Amazon.com during Prime Day 2018, according to a March 2018 online survey based on 1,015 respondents aged 18 or older, run by specialist news and data provider Digital Commerce 360.”