Photo: Amazon
Amazon Sets Records on Prime Day in Spite of Competition
Even as consumers struggle with record-high debt and inflation, Amazon made more money than ever on Prime Day this year.
According to U.S. News & World Report, “Adobe Analytics data showed U.S. online sales reached $12.7 billion on the two shopping days, up 6.1% compared to a year ago.” That makes this the biggest Prime Day event to date, with Amazon selling over 375 million items to Prime members.
Amazon Prime Day has become a staple summer savings event each year, one that many people dub “Black Friday in July,” and big box retailers are eager to compete for sales.
In a recent article, Business Insider stated that Prime Day has “transformed July from a slow time for retailers into one of the hottest sales stretches of the year.” Rivals like Walmart and Target aren’t letting Amazon go unchecked, hoping to lure Amazon shoppers to their own sites with competitive deals. “But while other retailers can try to get in on the shopping spirit,” Business Insider notes, “it’ll be hard to beat Amazon at its own game.”
One way Amazon’s competitors tried to set themselves up for success is by offering their sales to everyone, not just those signed up for an annual membership like Amazon Prime. Walmart did offer 24-hour early access to Walmart+ members for its Walmart+ Week sales, but it didn’t limit who could shop the deals for the three remaining days. Additionally, Walmart cut its Walmart+ membership cost in half during the week of sales.
Most competing retailers also extended the length of their events beyond Prime Day’s two-day run. Those that started early may have hoped to grab consumers’ attention before Amazon could outshine them, and those that ended later might have aimed to attract buyers who were too indecisive to make their purchases on July 11 or 12.
Here’s a look at the competitors this Prime Day:
- Target: Target Circle Week from July 9-15.
- Walmart: Walmart+ Week from July 10-13.
- Best Buy: Black Friday in July from July 10-12.
- Kohl’s: Summer Cyber Deals event from July 11-12.
- JCPenney: Cyber sale offering an extra 30% off online from July 10-12.
- Macy’s: Black Friday in July from July 6-13.
Even with the growing amount of competition each year from other big box retailers, Amazon still came out on top this year with its best sales ever.
So, what does Amazon’s record-breaking success during Prime Day mean for shoppers and the retail industry as a whole? According to Footwear News, “Spending turnout for Prime Day and other July shopping holidays this year could be a strong indicator of how consumers will come out for major shopping holidays through the remainder of 2023, a year in which inflation, high interest rates and economic concerns [have] weighed on spending.”
However, even though Prime Day was a hit, Forbes noted, “Years of uncertainty and stress have changed what matters to consumers, how they want to shop, and where they’re willing to spend their money.” One new trend this year was the “significant increase in Buy Now Pay Later orders, which accounted for 6.4% of online orders or $461 million, a 19.5% jump from Prime Day 2022.” This growth indicates that shoppers are looking for flexibility when making purchases.
Ultimately, shopping events like Prime Day, Walmart+ Week, and Target Circle Week continue to entice buyers with great deals, even during an economically uncertain time like this when consumers are cutting back on their discretionary spending.
Discussion Questions
DISCUSSION QUESTIONS: How important is it for other e-commerce platforms to create their own sales events to compete with Prime Day? Can they realistically challenge Amazon’s dominance?
Poll
Loading …BrainTrust
I’m not sure the success of Prime Day is a harbinger of retail success during the second half, or rather a sign of Amazon’s ability to create an even with high levels of awareness and urgency. Two days means two days — no cheating with so-called “preview days” or extensions of the sale event. (Case in point: I waited until Prime Day to buy a rowing machine and saved 15% by doing so.)
The broader economy is resilient — inflation is retreating, employment is strong — but the results of Prime Day are mostly a credit to Amazon’s execution and the breadth of offerings on sale.
*”Event” not “even”
I don’t think the success of Prime Day can be accurately measured by looking at the numbers for those specific days. Amazon has now tee’d up July as a major promotional window. So of course everybody is going to jump on the bandwagon. And all these are events are announced enough in advance that people can just stop shopping and wait to see what deals are offered across the broad spectrum of participants. They can postpone purchases they would have made before the event and pull forward purchases they would have made after the event. The minimum window we need to look at is July total sales, for all the participants. Debt levels keep rising. Default rates on that debt keep rising. Student debt repayments are about to resume. I think it’s a little premature to say that it’s all smooth sailing from here.
Can I raise my hand and say that sales are not the same as “making money?”
Amazon consistently loses money in prime day quarter. So they’re making great time, but they’re lost.
Prime Day has replaced Thanksgiving Day openings as the latest retailer miscalculation
This decade, consumers have come to expect Prime Day deals and concurrent e-commerce events from rivals. If retailers want to win, they need to get in the game.
Amazon’s data mastery makes it a personalization powerhouse that drives sales with relevant deals. Yet, there’s enough room for rivals to double down on their differentiators to earn sales and share.
Prime Day’s success equals success for the many retailers and small businesses who use the Amazon market place as well. Prime Day is not going away and we should expect it to continue to grow in terms of volume. For the Walmarts and the Targets of the world to compete with he success of Prime Day they need to continue to win the every day customer. It is a difficult road, but for other to compete with Prime Day they have to build a customer base that thinks “Myretailer.com” instead of Amazon.com when there fingers start typing.
Can anyone realistically challenge Amazon’s dominance? The question should be, “Can anyone realistically touch the uniqueness of “PRIME.”
Prime is probably the most successful and powerful marketing strategy in history. The only thing close is the breadth of the Chinese online retailer led by the Alibaba group.
Amazon and Alibaba are part of peoples’ everyday lives, far beyond shopping.
Amazon Prime Days occurred when news of slowing inflation & stock market rebound were front & center. Plus, Amazon featured products most sought by consumers.
As for other retailers, the Amazon noise during this time period is difficult to break through. Earlier starts & longer runs in July only act to highlight the Amazon advantage. I suggest a movement to June & create your unique event.
If a retailer can actually compete with Amazon’s prime day deals, it is imperative they put those discounts out. If they can’t, it’s a worse look to try to compete and not deliver. I think it’s also important to note that this year was such a success because the items that were on deal were items consumers actually really wanted. This was the first year I was seeing deals on so many in-demand items.
This year, more so than previous, Prime Day felt like there was a broader selection of merchandise people wanted. Coupled with their excellent execution making customers aware of what would be on sale, likely caused June purchases to slide to Prime Day. While past years this felt more like Amazon (and marketplace sellers) discounting inventory they needed to move, this year felt like discounts were on items everyone wanted. Does this bode well for sales for the remainder of the year? What if shoppers bought their holiday purchases early this year? My guess here is most consumers don’t think this far forward. The larger concern is did consumers splurge on Prime Day and equivalent sales from other retailers because they don’t plan on spending for the rest of the year. Time will tell, but on the surface this appears to be a good sign of consumer resiliency.
up 6.1% compared to a year ago WOW!! that…just keeps up with inflation.
Companies compete 24 hrs a day/365 days a year: do I think it matters what they do on any one day (however relentlessly it may be promoted ahead of time or breathlessly talked about afterward)?
Not particularly.
Walmart+ week, Target Circle Week, etc will pull traffic off prime day but they are fighting an uphill battle as long as the battleground is referred to as Amazon Prime Day.
In response to Amazon Prime Day, we saw companies like Best Buy, Target and Walmart announce competing sales over the same week, with deals available both in-store and online. However, in order to meet or exceed Amazon’s record-setting success, what other retailers really need to do was double down on their customer experience as a differentiator. After 8 years of Prime Days, consumers have come to expect generous promotions on big ticket items and speedy delivery times – and competing retailers that can’t meet those expectations are at a disadvantage. Ahead of next year’s Prime Day competition, retailers need to take a closer look at their backend processes to ensure they can continue to delight customers and leverage their competitive advantage of brick and mortar stores as they dole out discounts and same-day delivery promises.
Retailers like Walmart and Target still rely on physical stores as their major sales channel, which is also their greatest strength. Amazon’s whole game plan is centered on events like “Prime Day” to maximize sales, being a major online retailer. Instead of competing with Amazon at its own game, retailers should focus on maximizing the potential of their physical retail, where Amazon notably lacks.
The “Black Friday Sale” is a significant time of year for customers because of the huge discounts offered across all categories, yet most retailers are unable to capitalize on it. The event is seen as an enjoyable occasion following Thanksgiving. The entire family gathers for shopping with a long list of products; however, the buying process can get chaotic at times due to high rush in-stores.
Retailers will have a much better chance of winning over customers and even motivate them to let go of Prime Day, if retailers focus on making in-store buying journey less chaotic and offering a fun shopping experience along the way.