Amazon's Prime Day experiment appears to have been a success on many fronts despite the social media backlash. In fact, Amazon's metrics point to Prime Day becoming an annual event.
The company disclosed the following figures:
- Amazon moved more units---34.4 million items---on Prime Day than Black Friday 2014.
- 398 items were ordered a second.
- Global order growth was up 266 percent from a year ago and 18 percent more than Black Friday.
- Third parties saw unit sales grow 300 percent globally.
With those figures, Amazon noted that "we'll definitely be doing this again." What's interesting is how Prime Day may highlight Amazon's future approach to sales events as well as how competitors on multiple fronts will respond.
Here's a look at the takeaways:
Amazon turned shopping into gamification for a day. What was most interesting about Amazon Prime Day was that the e-tailer regularly deployed lightning deals, which were flash sales for Prime members. The game-meets-shopping approach seemed to strain Amazon's site, which is built for efficiency. Wells Fargo analyst Matt Nemer said regarding the flash sale approach:
Amazon is largely a transactional experience, quick search, one-click purchase, and 2-day delivery. Prime day was more like a giant flash sale. Consumers could not search for brands or items to see if they were available for deep discounts yesterday (7/15) - instead they had to peruse through hundreds of items in order to discover something that looked interesting (thus the frustrating comments from consumers on social media, in our view). This added an element of gamification to a site that is primarily designed to be efficient. Perhaps this is a way for Amazon to have both "push" and "pull" or to segment its customer base by behavior (shopping addicts and "one and done searchers?").
Amazon may have taken some money out of Google's pocket. Tim Daly, CEO of Vincodo, a digital marketing agency with national advertising clients, noted that one of his top customers saw sales surge on Amazon at the expense of a Google paid search campaign.
For one of our clients yesterday, we saw a 3x increase in sales volume yesterday in Amazon. At the same time we saw a 12 percent decline in average daily sales associated with our Google paid search campaign. For the first time ever for the client, Amazon generated more daily sales than Google Paid Search campaign efforts drove.
Meanwhile, Daly's client saw steady page impressions, but the click interactions dropped with the Google ads. The upshot: People were abandoning their searches before clicking and just going to Amazon. It's unclear how many of those Amazon landing pages converted sales.
The numbers are likely to reveal a success. Amazon said that Prime Day peak order rates surpassed 2014 Black Friday. Amazon Prime Day did garner interest and likely converted a few non subscribers into Prime members. In its statement, Amazon said that more people tried Prime than ever before.
Competitive response. Multiple retailers may have seen pressure from Prime Day, but the ones most effected are the ones directly in the categories Amazon chose to plug. Nemer noted that sale items were led by fashion and apparel, baby and kids and consumer electronics. Walmart offered rollbacks and many online retailers large and small tried to piggyback on Prime Day.
The fallout from social quips probably minimal. Amazon Prime Day did draw its share of critics, but it's unclear whether anyone will change their thinking about the brand. It's quite possible that some of the folks with the best Twitter #primeday quips also bought something.
Prime Day is likely to be an annual event. Should Amazon's spin on Christmas in July be a success or even come close to making the e-tailer operationally profitable for a day the sale fiesta will be an annual event. And if retailers can replicate anything close to a Black Friday online in July there's a good chance the entire industry may follow.
Amazon's experiment was worth doing. As I noted yesterday, Amazon's Prime Day effort could have been executed better. Nevertheless, Amazon likely collected a lot of data on shopping behavior, flash sales and landed a few extra Prime subscribers. Prime subscribers generally offer better lifetime value. Aside from Amazon Web Services, Prime is the most important business effort for the company.