Amazon will sell a lot of merchandise, but so will other retailers. Are sales incremental, or just pulling revenue from other periods? Data from 2018 suggests Amazon and other retailers are in fact gaining sales from buzz generated by Prime Day.

Stephen Kraus, Head of Digital Insights, Jumpshot

Stephen Kraus, Head of Digital Insights, Jumpshot

Prime Day is just a week away.  The anticipatory excitement is building in the business world, and seeping into popular culture.  Amazon is spending big on national media campaigns, and leveraging all its channels for promotion, from Prime Day concerts to e-sports promotions via (Amazon-owned) Twitch.  Competing retailers are announcing their own sales.  The media is ready to pounce on this year’s sales data, and deconstruct what it symbolically tells us about consumer confidence and today’s economy.   

Prime Day has become an industry unto itself, but it is not entirely unpredictable.  We’ve looked at historical data and ongoing trends to anticipate three big take-aways that you can expect from Prime Day this year…

Amazon Will Sell a Lot of (Amazon) Stuff

Obviously Prime Day generates headlines, and a lot of sales. In 2018, across the major categories we track, Amazon averaged 4.6 million purchases a day in June, a figure that jumped to 10.6 million on Prime Day.  Amazon garnered six million more transactions than usual on a single day—more than a lot of brands and retailers sell in an entire year.

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In percentage terms, Target gets a bigger boost from Prime Day than Amazon does.

Put another way: in 2018, Amazon sold 132% more on Prime Day than on a typical day in June.  They saw essentially the same percentage boost in 2017.  Amazon is off to a strong start in 2019, averaging over five 5 million transactions a day, meaning that same boost would put them on track to exceed 11.5 million transactions on Prime Day this year.

 

Amazon's Prime Day transactions 2017-18

Source: Jumpshot. US data shown, from January 1, 2017 through June 30, 2019.

What, exactly, does Amazon sell on Prime Day?  For starters, they sell a ton of Amazon stuff.  In 2018, allof the top 10 products sold on Prime Day were Amazon products, and most were Alexa-enabled…

  1. Fire TV Stick with Alexa Voice Remote
  2. Echo Dot (2nd Generation) – Smart speaker with Alexa – Black
  3. com eGift Card
  4. Fire TV with 4K Ultra HD and 1st Gen Alexa Voice Remote
  5. Toshiba 50-inch 4K Ultra HD Smart LED TV HDR – Fire TV Edition
  6. Kindle Paperwhite E-reader
  7. Echo Dot (2nd Generation) – Smart speaker with Alexa – White
  8. Echo (2nd Generation) – Smart speaker with Alexa – Charcoal Fabric
  9. Fire HD 8 Tablet with Alexa
  10. Fire 7 Tablet

Retailers Drafting in Amazon’s Wake (especially Target) May Offer Brands More Opportunity

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While Amazon’s Prime Day focus is increasingly its own portfolio of offerings, Amazon’s promotional efforts generate a broader interest in consumption and deal-hunting (priming the pump, so to speak).  Other retailers are riding the wave of consumption that Amazon creates, and may generate more opportunities for other brands.

Target leads the pack, and has tried to match Amazon step-for-step.  When Amazon expanded Prime “Day” to two full days this year (up from 30 hours last year), Target followed suit with “Target Deal Days” on the same two days.  Target has worked hard to communicate its differentiators, including not requiring membership, and a mix of fulfillment options, often including same-day delivery and in-store pickup.

It’s working.  In percentage terms, Target gets a bigger boost from Prime Day than Amazon does.  In 2018, Target sold 156% more on Prime Day than on an average day in June—a bigger percentage boost than every other major retailer, including Amazon.  Target obviously can’t match Amazon’s volume—Amazon has over 50 times more transactions! —but still Target’s percentage boost is impressive.  Target is not alone in drafting in Amazon’s wake — several retailers got big Prime Day boosts in 2018, including some who got little or no boost in 2017.

 

2017 Prime Day Boost 2018 Prime Day Boost
target.com +26% +156%
amazon.com +127% +132%
macys.com +107% +99%
jcpenney.com +10% +82%
bestbuy.com +62% +66%

Source: Jumpshot.  US data; Prime Day transactions vs. June average (+100% boost means a doubling of transaction volume).

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Target also stands out as being particularly brand-friendly, and made recent headlineswith  high-profile brand partnerships, including several with formerly direct-to-consumer (DTC) brands such as Casper, Quip, Harry’s and Native.

At the same time, Target has quietly been de-emphasizing its portfolio of private-label brands, with transactions from those brands dropping nearly 50% over the past year.  Meanwhile, Amazon’s transactions for its own brands are up 27%, even as they pivotfrom “pure private label” brands to “exclusive brands” (a subtle distinction, but one that implicitly recognizes that brands continue to resonate with consumers).

From Distributing Demand to Incremental Sales

One of the long-standing questions about retail holidays, and retail promotions more generally, is: Do they generate incremental sales?  Or do they simply redistribute demand—pulling sales they would have gotten anyway into a narrower time period?

It’s not an easy question to answer quantitatively—there’s no way to definitively know what consumers “would have bought” anyway, absent a sale. And the fact is that, even if sales simply did redistribute demand, that would be beneficial to most retailers. Black Friday got its name because that was supposedly the day that retailers went into the black.  Obviously a business that’s in the red 11 months a year is less than ideal, so even a redistribution of sales throughout the year provides a benefit, and obviously Prime Day does that.

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But the data do directionally suggest that Amazon, and the retail industry, are increasingly finding ways to grow incremental sales. We saw Amazon’s big Prime Day bump in 2017, but its total sales that July were actually down 2.7% from the previous month.  In 2018, Amazon’s July sales were up 3.4% from the previous month.  Target’s July 2017 was down 4.3% from the previous month; Target’s July 2018 was up 18% from the previous month.  Several other retailers show similar evidence of “true” growth, not just a redistribution of sales over time.

Summing Up: Who Is Prime Day For, Anyway?

Consumers? Brands? Amazon? Amazon is a business, not a public utility or non-profit organization, so it is hard to fault Amazon for creating a holiday that furthers its own business objectives.  Consumers find enough value in Prime Day to continue participating.  Brands and even some competing retailers are benefitting, often by joining forces in new and innovative ways.

It’s ironic and unexpected—Amazon’s self-serving holiday creates a rising tide of consumer demand that lifts many boats, and has practically become a form of community service for the entire retail industry. At least for those savvy enough with data and strategy to take advantage.

Jumpshot delivers digital intelligence, drawing on data from an anonymized global panel that tracks five billion actions a day across 100 million devices to deliver insights into online consumer behavior. 

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