Since its inception in 2015, Amazon Prime Day (APD) has clearly grown in prominence as a retail event. In spite of predictions for a pandemic induced downturn, Prime Day 2020, which was postponed until last Fall, exceeded expectations with Amazon selling a record $10.4 billion worth of goods, a total that exceeds revenue from its Black Friday and Cyber Monday sales. With more than 200 million Prime members worldwide, Amazon Prime Day is important for many small retailers who sell over the platform in addition to Amazon itself, as they recruit more Prime members via the event. It was recently announced that this year’s APD will occur on June 20 and 21, and the stakes will be high.
A survey conducted by e-commerce and media platform experts Criteo in May reinforces what a major event APD has become, especially in the U.S. Two-thirds of U.S. shoppers are familiar with Prime Day and 81% of those who plan to shop on that day indicate that it puts them in the mood to shop. This latter statistic pertaining to consumers wanting to shop is important, as APD takes on increased importance retailers other than Amazon. Indeed, Criteo’s survey finds that 75% of respondents already know what retailers outside of Amazon they are planning on shopping at on Amazon Prime Day. These shoppers also have a good idea of what they are likely to shop for, with consumer electronics, video games and toys ranking as the top categories.
In addition to documenting the establishment of APD as a major annual shopping event and how it has a halo effect on other retailers, Criteo’s analysis provides three additional insights that underscore how important this year’s APD will be as summarized in three findings:
1) The halo effect of APD is likely to be large in 2021
Criteo is able to track sales from their large network of retail partners. Based on analyses of 2019 and 2020 data and factoring in the economic recovery currently occurring, Criteo’s data predicts a large halo effect similar to what occurred in 2019, when sales rose 24% on Monday and 26% on Tuesday during APD before dropping off after the even ended. In 2020, sales for the other retailer still went up during the even (14% on the first day and 8% on the second day). It makes sense that consumer moods for shopping in mid-October 2020 were not as positive, as Covid had been dragging on for months and vaccines were not yet assured. Thus, predictions of a strong year for Amazon, its small retailer partners, and other retailers make sense.
2) Retailers that do not offer promotions during APD are likely to lose out
According to Criteo’s analysis of its partners who ran their own promotions during APD shows 71% and 43% bumps in sales on the first day of the event in 2019 and 2020, respectively. Notably average sales for those who did not were flat. This suggests that we can expect other retailers to run major promotions during the APD period. The report points out that Target ran a two-day Target Deals Day at the same time as APD during 2019 and 2020. It appears that consumers not expect to shop during APD but also expect deals when they do. Since many consumers are willing to spend heavily if they get these deals, it makes good strategic sense for retailers to run promotions.
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3) While tech will lead the way in sales, all categories will spike during APD
More reinforcement for the major nature of APD comes in Criteo’s data on sales across categories. As the report notes, Amazon’s deals on products such as Alexa can spur other purchases of electronics and other tech purchases. However, Criteo’s partners report average sales across other retail categories, including large spikes on the second day of APD in 2019 for mass merchandisers (51%), home improvement (41%), health and beauty (33%) and fashion/luxury (25%).
Overall, it is clear that APD has become established as a critical day for retailers—including Amazon, its partners, and other retailers not affiliated with the company. A big day across the board for retailers this June 21-22 would signal a return to health for the retail sector.