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Did Amazon or a rival, say Target, gain the most from Prime Day?
Amazon.com has already declared victory, claiming record-breaking sales for marketplace sellers during its Prime Day event last week. Was it, however, the biggest gainer among the major retailers that ran sales last week?
Amazon has not released total numbers for Prime Day, but an Adobe Digital Index estimate provided to media outlets has it gaining 6.1 percent over 2020. Salesforce, on the other hand, had Amazon’s overall sales in the U.S. down one percent from last year.
Third-party sellers were the big Prime Day winners for Amazon, a point of emphasis for the retailing and technology giant in the lead up to this year’s event. The company ran a “spend $10, get $10” promotion to be used on Prime Day for the 10 days leading up to it. This, according to Amazon, produced record sales for third-party sellers over the lead-up period as well as the two days of the main event.
Thrasio, which bills itself as the largest acquirer of Amazon marketplace sellers across the globe, said its businesses — Wise Owl Outfitters, Drive Auto, E Tronic Edge and Harperton — achieved a 60 percent sales increase compared to Prime Day 2020.
Amazon may have been the main choice for many shoppers during the Prime Day period, but it was not their only option. Fifty-five percent of Prime Day shoppers only considered buying from Amazon, according to Numerator, but that left opportunities for others. Twenty-six percent comparison-shopped Walmart and 21 percent did the same online at Target.
Most of the numbers around Prime Day and its rival promotions center online, but that only tells part of the story for retailers that have much larger store footprints than Amazon.
Placer.ai reports that store visits to Target and Walmart were up compared to their overlapping promotions during Prime Day 2020. Target’s visits were up 32.3 percent over last year and 12.1 percent over 2019. Walmart saw store visits increase 21.7 percent year-over-year. They were essentially flat compared to 2019.
Target, in an email to Retailwire, said that it “set new sales and fulfillment records” during its 2020 Deal Days, and that this year’s promotion, which ran three days, resulted in “continued growth” as it found more of its customers taking advantage of its same-day Drive Up and in-store pickup options.
Walmart did not respond to a request for comment.
- Prime Day Delivered the Two Biggest Days Ever for Small & Medium-Sized Businesses in Amazon’s Stores Worldwide, Growing Even More than Amazon Retail, and Members Saved More than Any Previous Prime Day – Amazon.com
- Prime Day Delivers – How Amazon’s Holiday Tracks the Impact of Ecommerce on Retail – Salesforce
- Thrasio Celebrates Record Breaking Prime Day – Thrasio/PRNewswire
- Prime Day 2021 – Offline Impact – Placer.ai
- Will marketplace sellers carry the Prime Day for Amazon? – RetailWire
- Amazon and its retailer rivals look to set Prime Day sales records – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Are the 2021 Prime Day results a signal that Amazon’s history of rapid year-over-year growth is slowing down if not coming to an end? Do you expect rivals — Walmart, Target, Best Buy, et al — to begin cutting into Amazon’s market share or does Amazon have an answer to prevent that from happening?
Poll
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Liz Adamson
VP of Advertising | Buy Box Experts
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
The slowdown in Prime Day sales was inevitable as other major retailers launch counter promotions to tap into the demand. These results are proof positive that the major retailers are having an impact on Amazon’s business. That said, Prime Day is still huge and it will continue to be a market maker for likely years to come.
Prime Day is an event of Amazon’s making. However it has become a national retail occasion with other players jumping on the bandwagon with their own promotions and deals. There is no doubt that players like Target and Best Buy saw sales gains. Once again, this helps to prove that Amazon is not the only game in town – which runs counter to those silly narratives that Amazon is a monopoly. Ultimately, Amazon could never capture the entirety – or anywhere near it – of retail on Prime Day nor on any other day!
The fact that third-party sellers were the biggest winners suggests to me that Prime Day continues to be about Amazon as a platform versus a brand itself. I would have considered a more impressive victory to be significant growth in Amazon-owned brands, since that would mean the holiday is working to build relationships with consumers. As time goes on, Amazon rivals will only become more strategic and successful in competing on Prime Day(s). Target’s impressive Prime Day results this year demonstrate that they’ve started getting it right already.
If Target’s visits were up 32.3 percent over last year and Walmart saw store visits increase 21.7 percent, you have to believe that Amazon is now looking even more closely at its brick-and-mortar strategy. it’s another reminder that Target is getting everything right in its omnichannel approach. Again, it looks like Amazon has built up Prime Day only to see it benefiting its main competition. It stands to reason that, just like in brick-and-mortar retail, adjacency increases sales for the competition. That’s why you see the auto mile, furniture row, etc., adjacency works online as well.
A lot more retailers got a piece of the pie this year – some that have never played in that arena. I suspect that the results were positive for them as well. The leaders like Walmart and Amazon will need to find ways to entice customers other than price.
Amazon can only maintain first mover advantage for so long. Since the first Prime Day in 2015, retailers like Walmart and Target have joined in, and over time consumers have begun to expect and shop for deals and discounts across multiple retailers. The big win is that Amazon has successfully created a new shopping holiday during summer, and fueled new growth during a historically low sales period for the marketplace. So while they may share some of the spotlight with other retailers, I’m confident Amazon will continue to find ways to continue to drive YOY increases through promotions, pricing, and product selection.
Amazon’s slowed growth percentage is not a surprise as overall spending continues to grow. I believe Amazon was quite satisfied with their year-over-year performance. However other retailers who have joined the parade are realizing significant lifts. The best news coming out of this year’s Prime Day event is that consumers are spending money and the retail economy’s health looks favorable.
We’ll need another year of data to answer this question accurately only because the surge of shoppers returning to brick-and-mortar stores after a year of online shopping skews the results somewhat. It could be that shoppers are enjoying the novelty of in-store shopping too much right now to bother with Prime Day. It also may be that Walmart and Target’s competing sales drew a larger portion of shoppers and signaling that the playing field is beginning to level as other large retailers develop their own fulfillment infrastructure to give Amazon some real competition.
2020 results tend to be an anomaly.
Prime Day 2020 took place in October, kicking off the holiday shopping season as many consumers stayed home. This month’s event reflected seasonal differences and consumers’ desire to enjoy life beyond our homes. Also, India and Canada did not participate in Prime Day this year.
Rivals are in a better competitive position now than they were in October 2020.
So is Amazon.
As e-commerce grows increasingly global, Amazon keeps attracting third-party sellers for assortment variety. Amazon’s digital advertising, logistics and Prime memberships continue to boost revenue.
Over the medium term, expect momentum among value-added Prime media perks, private labels, Alexa and physical store expansion. Prime Day is poised to keep growing as a global shopping fiesta.
I almost said that Amazon is doing the entire retail universe a huge favor. They are creating shopping holidays out of thin air. Amazon builds it and the entire retail world can hitch a ride with their own corresponding event. But — that’s not to say that it’s easy and that’s not to say that it’s incremental sales. Sit back and do nothing and you will surely lose out. Participate and maybe you will maintain market share. One of the lessons learned from the One Day Sale Syndrome is that sooner or later sale events are anticipated and purchases are postponed until the deals are forthcoming. Higher margin sales migrate into lower margin events. These feel-good moments are not without their downsides.
First of all, the Target and Walmart numbers from a year ago were recorded during peak months of the pandemic while this year’s numbers partially reflect the fact that shoppers are coming back to physical stores as fear of the pandemic wanes, so one could only hope you would see exponential jumps in sales. So, that out of the way, the question can’t be fully answered until we get to the end of the year and have the perspective of how day-to-day shopping patterns have changed post-pandemic. As to rates of growth — Amazon now faces the problem faced by Walmart and other fast growing retailers. When you start from a low base all growth looks exponential, and once you have really achieved significant growth it gets harder and harder to match your previous comps. As to the future, a lot of people have lost a lot of money underestimating Amazon.
I love competition. It forces innovation, higher levels of service and CX, and helps keep merchandise and pricing competitive. As a consumer, you have to love it. As Walmart, Target, etc. cut into Amazon’s market share, the consumer wins. And we know Amazon will not sit there and just watch this happen. And don’t expect the aforementioned competitors to get comfortable either. You can count on Amazon to step up and find ways to retain existing customers and bring in new ones.
Amazon’s renowned PR prowess is benefiting other retailers who capitalize on the worldwide shopping event that’s been created.
“A high tide lifts all ships.” While Amazon owns the self-branded holiday, other retailers inevitably take advantage and benefit from consumers being in a buying mood. It will be interesting to see if other retailers dip their toes in major sale days, or if Amazon expands its physical footprint to steal marketshare.
I don’t watch Prime Day too closely. But it should be no surprise if Amazon’s results are slowing. They have to. No major annual discount event increases forever. The Salesforce numbers sound more realistic and I don’t tend to trust Adobe numbers based on past experience with their willingness to let their own ambitions drive their research.
As a background issue, if Amazon begins to stagnate we may find out how much they are living on borrowed accounts payable.
Reversion to the mean – in math speak. Amazon has just about all U.S. residents in its boat, the real issue is wallet share at this point. The Amazon growth curve is hard to sustain once most of the population is already part of it. However membership does not equal buying. No surprise that Target, Walmart etc. have been gaining here – all these companies are playing the omnichannel game and any broad scope sales day will have a cut for them. As a matter of fact, the Case Schiller consumer price index was at a high with enormous customer confidence in the market. No doubt we’ll see higher sales at the stores. Amazon’s play also stresses the fact that it’s the third-party marketplace that is benefiting the most, not the 50 percent of business self-sourced. We’ll continue to see erosion, which I speculate was happening (or at least was lackluster) in the prior years as well. Amazon will continue to execute with their stellar marketing engine and conversion-oriented thinking.
Retailers are taking eCommerce share from Amazon, via being more competitive during the Prime Day promotion period, but also generally with digital, and especially with local store fulfillment like BOPIS. This is a trend that should continue, much to the benefit to larger retailers like Target, Walmart, Best Buy, Petco, Sephora, Ulta, and many others. Prime Day may be Amazon’s namesake, but it is increasingly other retailers’ opportunity.
There is nothing at all here to suggest that Amazon lost ground over Prime Day. The slower gains were inevitable given its existing dominance. What matters is that Amazon continues to pivot strategically away from its own 1P business toward a future dominated by 3P sellers on the Marketplace.
Thrasio’s claims seem to ignore its enormous acquisition activity — so it seems likely that 2020 to 2021 is not an apples to apples comparison.
This is a proof-point that all the investments made by the retailers over years to combat Amazon is paying off.
With COVID ending to some degree, shoppers are so tired of staying home they may be going out to do bricks and mortar shopping again. Also all types of competitors knowing when Amazon has prime day are most likely preempting it with their own promotions.
Years ago when Toys “R” Us produced their catalog for the Christmas period and locked in prices for the full season, Walmart hit the street underpricing the same items they had in the catalog.
Percentages are sometimes deceiving. An old CFO of mine told me he went to the bank with dollars not percentages. Amazon has lots of dollars and to believe they are vulnerable or weakening would be a mistake. Obviously, time will tell.