Article updated: 10-07-17
Within all the hype of Amazon Prime Day, we thought we'd explore what online retailers have to gain from discount days. We know that as retailers you need to take a hit in order to discount; the question that remains is how much of a hit, and what are you left with once the warehouse dust settles.
Prime Day for those that don't know is a one-day retail event exclusively offered for Amazon Prime members. During Amazon's first Prime Day (July 15th 2015) shoppers ordered 34.4 million items from Amazon, 398 items per second, breaking Black Friday sales records. And perhaps the most important target, Amazon had more new members sign up to the Prime subscription service than on any single day in Amazon history.
"Worldwide order growth increased 266% over the same day last year and 18% more than Black Friday 2014"
Greg Greeley, Vice President of Amazon Prime, said in a press release: “Customers worldwide ordered an astonishing 398 items per second and saved millions on Prime Day deals. Worldwide order growth increased 266% over the same day last year and 18% more than Black Friday 2014 – all in an event exclusively available to Prime members. Going into this, we weren't sure whether Prime Day would be a one-time thing or if it would become an annual event. After yesterday’s results, we'll definitely be doing this again.” So the short answer is 'yes' it worked. But at what cost?
Stock and social
In terms of publicity, there were issues. Shoppers appeared to be disappointed with Amazon’s Prime Day sales, which they felt lacked savings, or weren’t high-quality enough.
IT IS WHAT I HAVE ALWAYS WANTED!
— Admiral Bahroo (@AdmiralBahroo) July 15, 2015
'Black Friday 2014 by the same point had seen 20 times that number of mentions during the same time period'
According to data released by Adobe, which tracked Amazon Prime Day across over 4 million social mentions, the Prime Day Sale had tracked over 90,000 social mentions by late afternoon. Black Friday 2014 by the same point had seen 20 times that number of mentions during the same time period (or 1.6 million). Black Friday did then eclipse Prime Day in terms of social hype. There were also stock problems. Amazon shipped large numbers of its own products in minutes, but after stock was depleted, didn’t replenish deals, putting users on wait lists, frustrating many.
What we've learned
We're not all in the position of Amazon, with the economies of scale to be able to discount to the lowest possible margin. But there is something to be said for a discount: with increased sales comes a level of publicity and exposure, and most importantly for Amazon, an increase in Prime membership. Whether or not those Prime members stick around after their 30 day free trial is over is unclear, but it's certainly food for thought for online retailers.