Amazon.com Inc. may have generated more in online sales on its third annual Prime Day than nearly every North American retailer will sell online all year.
Amazon grew its overall sales by 60% year over year during the 30-hour Prime Day sale held Tuesday, an Amazon spokeswoman tells Internet Retailer. Based on Internet Retailer estimates of $1.80 billion in sales globally on Prime Day last year, Amazon had an estimated $2.880 billion in sales on Prime Day 2017.
That $2.880 billion figure represents more than the total 2016 online sales of all but the 20 largest non-Amazon retailers in North America, including Target Corp., No. 22 in the Internet Retailer 2017 Top 500; Lowe’s Cos. Inc. (No. 25), Overstock.com Inc. (No. 30) and Under Armour Inc. (No. 36).
Industry experts say that in its third year, Prime Day has become a retail force.
“We believe that Amazon Prime Day has already become the norm, already establishing itself as one of the newest and most anticipated ‘micro-holidays’,” says Tushar Patel, chief marketing officer at order management, e-commerce and omnichannel technology vendor Kibo.
Market research firm Market Track surveyed more than 400 consumers on Prime Day and found that “Amazon has solidified Prime Day as an annual event that shoppers will mark on their calendars—close to nine out of 10 shoppers intend to shop Prime Day in the future, should Amazon continue to have the sale,” says Ryne Misso, marketing director.
And Amazon says it plans to continue the mid-July sale. “We are already looking forward to our Prime Day celebration next year,” Greg Greeley, vice president of Amazon Prime, said in the retailer’s statement.
Amazon (No. 1 in the Top 500) does not disclose Prime Day sales figures but says, as it did in 2016, that Prime Day was its biggest sales day to date. The retailer reports that the number of shoppers who bought something on its site on Tuesday more than doubled compared with last year.
Amazon placed a heavy emphasis on its Alexa voice-based devices this year. Data from analytics provider Ugam
shows that on average, Amazon slashed prices 50% on its Amazon Echo voice assistant devices. Shoppers, in turn, responded. Amazon says the Echo Dot, which is a smaller, hockey puck-like version of the Echo, was the best-selling product during Prime Day, while overall sales of Echo devices were up sevenfold compared to this time last year.
Luke Starbuck, vice president of marketing at customer service and retention platform provider Linc, says other retailers should take note of Echo’s gains.
“Consumers are becoming more comfortable with shopping by voice every day, and the Echo being tied to Amazon’s marketplace makes this incredibly easy,” Starbuck says. “For other brands and retailers to compete, they are going to need to establish their presence on voice platforms as a matter of urgency. The time is now to engage directly with consumers on the Echo platform and additional platforms, including Google’s and Apple’s in-home devices.”
Sales of Echo Dot may have dominated the day because the device was relatively inexpensive compared with the full-size Echo devices. Amazon sold its Echo Dot for $34.99 (discounted from $49.99), while the full-size Echo was $89.99 ($179.99 regularly).
While Echo devices proved to be popular with shoppers, home and garden products dominated Prime Day in terms of overall offers, according to data from Ugam, which specializes in online price monitoring. Home and garden products accounted for 24% of all deals as of 6 p.m. Eastern on Prime Day. Electronics, computers, and office products accounted for 22% of deals; while clothing, footwear, and jewelry accounted for 16%.
Repricing technology vendor Feedvisor, which works with marketplace sellers, analyzed more than 132,000 products on Amazon and found that marketplace sellers experienced a 221% jump in sales at 4 a.m. Eastern on July 11 compared with the same time two weeks prior. That sales spike was the larger than the two previous Prime Day events. Feedvisor also reports that more shoppers bought at 10 a.m. Eastern than during any of the other 30 hours that Prime Day encompassed this year.
Not only were marketplace sellers selling more, they were also making more money. Feedvisor reports that its marketplace sellers grew their profits by 60% compared with two weeks prior.
Amazon’s success has not gone unnoticed by other retailers, many of which respond with their own deals to tap into the increased interest in online shopping that Prime Day brings. An Internet Retailer analysis of the 100 largest e-retailers in North America (excluding Amazon) finds that 47 ran some kind of Prime Day promotion Tuesday, be it a limited-time sale or incorporating “prime” language in promotional materials.
Kibo’s Patel says retailers that ignore Prime Day risk losing out on potential sales and new customers.
“At this point, if a retailer is not capitalizing on Amazon Prime Day, they are passing up a huge opportunity,” he says. “Strategically, it is a no-brainer to go head-to-head with the retail juggernaut because, for three years now, shoppers have been systematically ‘trained’ to not only anticipate the best deals and promotions from Amazon but to also assume they will see the same ‘sales frenzy’ from other leading retailers come mid-July.”