With Prime Day 2016 just around the corner, the team at Clavis has a few predictions for the big event.
Amazon Will Offer More Relevant Deals for Prime Day 2016
Last year Amazon’s Prime Day deals weren’t dramatically different from their typical Deals of the Day or Lightning Deals. There were more deals on a broader range of categories, but the depth of discounts weren’t dramatically lower and featured deals sold out fast (perhaps too fast). Some offers were decidedly odd and gained a dubious notoriety via social media, such as an extra-long shoehorn and 55 gallons of lubricant.
Amazon has been working with manufacturers since April to line up major deals, so we can expect major brand participation for Prime Day 2016. In the US, Amazon is promising nearly twice the number of TVs as Black Friday and Cyber Monday combined. We expect the 100,000 deals offered across 10 Prime-eligible countries to be more desirable offers that will delight shoppers and fewer mock-worthy items.
Prime Day 2016 Extends into Prime Week
As we discussed in our webinar, US Perspective on Black Friday, Cyber Monday, & Singles’ Day, ecommerce mega-sales days like Prime Day now stretch into weeks, even months. Because Amazon didn’t announce the date of Prime Day 2016 until a week and half in advance, their ability to stretch the event is somewhat hampered. However, Amazon is still working to capitalize on the sales spike that it is creating with this event by offering deals over a week in advance, such as 40% off an Acer 24-inch HD display TV and 70% the Ultimate Bond Collection + Spectre bundle in the US and 44% off a 2010 Chateau Margaux wine in Japan on the Tuesday before Prime Day.
Amazon Aims to Drive Prime Adoption
Mega-sales events such as Black Friday and Cyber Monday are often used as a catalyst for adoption of apps, new services, or memberships. China's JD.com and TMall offered different discounts on some items when purchased on a mobile device on Single’s Day last year and during this year’s JD anniversary sale, driving shoppers to download their apps onto smartphones.
Amazon’s stated goal of Prime day is to drive Prime membershipacross Prime eligible markets to let non-Prime members participate in the event with the aim of converting them to paying members. According to Consumer Intelligence Research Partners, 73 percent of Amazon's 30-day trial subscribers opt to pay for the first full year of membership. This is a major win for Amazon, whose Prime members spend an average of $1,100 per year, compared to $600 per year for non-Prime member Amazon shoppers.
Amazon's value proposition for Prime membership includes free two-day shipping for eligible purchases, free same-day delivery for some postal codes, access to media services such Prime Video and Prime Pantry among other benefits.
Amazon will encourage Prime membership trial with Prime Day deals and by highlighting membership benefits on its Prime Day page, such as free access to original series and Prime Music, Amazon’s own music streaming offering.
Competitors Will Look to Pick off Prime Day Demand
We expect competitive activity to ramp up in the week leading up to Prime Day as other retailers, such as Jet.com, Walmart.com and Target.com, begin to offer deals in advance of and on Prime Day to pick off building Prime Day demand. Walmart announced a 30-day trial subscription of ShippingPass, Walmart.com’s annual subscription service that offers free unlimited two-day shipping for $49 per year compared to Amazon Prime membership’s $99 per year. Walmart.com also began offering competing deals last Friday.
So far, Target.com and Jet.com have been quiet but we expect that to change over the coming days. Jet.com in particular, set to celebrate its first birthday on July 21, should get in on the action quickly both to encourage Jet.com trial and to earn some free media attention from press hungry for Prime Day and related stories.
How Brands Can Prepare for Prime Day 2016
Mega online sales events are proliferating across the globe, growing in scale and duration with every season. To prepare, brands need to track their product availability and placement, product content, and ratings & reviews to ensure they capture the opportunity to increase sales and showcase their brands on these high traffic days. This is particularly critical at Amazon as it continues to extend its dominance in the online channel, but also across online retailers as Amazon’s competitors will be stepping up their online game and looking for their brand partners to do the same to compete for online shoppers, their loyalty and their spend on Prime Day 2016 and every day
