“Make no mistake – this is the biggest online sales event of the year outside retail‘s fabled ‘golden quarter’.”
Prime fever has once again swept the nation, and as Couchbase‘s Perry Krug stated, it’s for good reason. Analysts around the world are predicting it will be bigger and better than last year‘s record breaker, running for 30 hours and launching in more countries than ever, including India.
Amazon has dominated headlines in recent weeks with a raft of leeks and announcements, including Prime wardrobe and its foray into physical retail with the World Foods takeover. These revelations serve to attract reams of new Prime members, which retail marketing firm Savvy‘s Alastair Lockhart believes are the giant‘s most prized assets.
“Other than the sales spike and PR boost the event provides, the key characteristic of Prime Day is that it is exclusive to the retailer’s Prime subscribers,” he said.
“These shoppers, who pay £7.99 a month in return for free next day deliveries and access to Amazon Music and Amazon Prime Video among other benefits, are highly lucrative to Amazon.
“Having paid their monthly sub, access to free next day delivery makes Amazon a highly convenient and price competitive option for shoppers, allowing Amazon to command a level of loyalty that most other retailers can only dream of.
READ MORE: Amazon‘s 3rd Prime Day will run for 30 hours
“We see in our own research that while 16 per cent of all Amazon shoppers use the retailer at least once a week, this raises to almost half among Prime subscribers.
“This means that Amazon can afford to price aggressively on Prime Day, able to offset any gross margin pressure against the additional long-term value gained from new Prime subscribers.”
To this end, Kantar Retail predicts Amazon will push its growing private label ranges during Prime Day, offering exclusive deals through its Alexa technology and making future own-brand items the default for future voice purchases.
This is the first Prime Day where Amazon‘s Echo device will be available, and as seen in previous years with Kindles, it is likely to be a key offering from the retailer.
“If Amazon‘s database were to creak under the intense strain, for instance, it would be catastrophic for the company.”
The ability to self-promote on such a huge scale is one of the many benefits of creating a unique retail event outside of the Christmas period. A luxury few retailers, if any, have the means to accomplish.
For those retailers that don‘t, Prime Day still represents a big opportunity to cash in. According to Salmon, 37 per cent of all online transactions are made through Amazon. With staggering statistics, BT Global Service‘s Alison Wiltshire thinks retailers should jump on the bandwagon.
“Amazon Prime Day is an ideal opportunity for other retailers to ride on the coat tails of Amazon by leveraging the hype around it and maximising the opportunity to communicate to customers with personalised messages and offers to customers – the more personalised and relevant the offer, the greater the conversion rate,” she said.
Despite the hype, Prime Day‘s success is far from a foregone conclusion and requires an incredible amount of effort and logistical planning to pull off.
“Behind the scenes, Amazon needs to account for the millions and millions of customers who will make purchases from their smartphones, laptops and PCs, transferring digital money in exchange for physical or digital goods,” Krug explained.
READ MORE: Amazon‘s Prime Day sales jumps 60 per cent
“Then there‘s returns, complaints and reviews online to consider. Customer payment information will need to be stored and secured, physical goods tracked across the globe and delivery assured for every single package.
“Days like these are data management tasks of mammoth proportions: where in years past retailers had one or two of them to consider, now they need the ability to operate at that scale at a moment‘s notice, whether they‘re creating it for themselves or not.
“If Amazon‘s database were to creak under the intense strain, for instance, it would be catastrophic for the company.
“Amazon has a reputation for delivering regardless of the challenges it faces, and it knows all too well that any kind of disruption can destroy this reputation in hours.”
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