Nearly 60% of products had a price increase or stayed the same on Prime Day, according to a new study. However, many merchants fear being outpriced by Amazon.

Many marketplace sellers increase their sales on Amazon.com Inc.’s Prime Day, but not all cut their prices, according to a new study by pricing software vendor Teikametrics.

The study is based on client data of 380 sellers that have 1,100 products which have sold at least once a week on average in the month leading up to Prime Day.

Prime Day is Amazon’s annual sales holiday for members of its Prime loyalty program. In 2019, the sales event was July 15-16, and Internet Retailer estimates that Prime Day sales reached $7.16 billion over this 48-hour period, which was a 71% increase over its 36-hour Prime Day 2018 sale.

Amazon markets the sales event as having large discounts, and many third-party marketplace sellers also offer deeper-than-usual discounts in hopes of capitalizing on the increased web traffic to Amazon.

However, according to Teikmetrics, 40.4% of products had a price increase on Prime Day compared with the four prior weeks. This shows that sellers can capitalize on the Prime Day traffic surge without cutting prices. The study also found:

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  • 18.8% of products did not change price
  • 24.6% of products decreased in price 1-10%
  • 13.5% of products decreased in price 11-30%
  • 2.6% of products decreased 2.6%

“Our research demonstrates that Prime Day meaningfully shifts the demand curve for all sorts of products on Amazon,” says John Shea, chief growth officer at Teikametrics.

On average, all of the analyzed products increased sales on Prime Day compared with the four-week period, although the retailers that had a discount did have the biggest sales boost.

Products that had a reduced Prime Day price increased sales 820% compared with the previous month’s average, and products without a reduced Prime Day price increased sales 496%.

“It’s important to note that this data shows that sellers which did discount their products on Prime Day realized the biggest average revenue increases,” Shea says.

This makes sense, as Prime Day is marketed as finding deals and discounts that attract consumer attention and dollars, he says. “However, the ‘rising tide’ of increased traffic to Amazon as a whole did lift the sales of products across the site–even if those products weren’t boasting discounts.”

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Retailers find pricing products for optimal sales is a concern not only on Prime Day, but on most days.

In fact, 71% of retailers say they are concerned about being outpriced by Amazon, according to a study of more than 500 senior pricing decision makers at retailers with at least 100 employees May 21-June 2 by pricing optimzation vendor ActiveViam.

 

Retailers are much more concerned about being outpriced by Amazon than bricks-and-mortar retailers, and even direct-to-consumer brands, the study finds, as 49% of respondents say they were somewhat to very concerned about being outpriced by store-based retailers, and 42% concerned about DTC brands.

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At 67%, the majority of surveyed retailers had a price optimization system that allows them to manage internal pricing and track competitor pricing.

Still, retailers say the biggest challenge, at 40%, they have when it comes to pricing is aligning pricing between channels, such as online and in stores. 23% say lack of insight into competitor pricing is a big challenge, 20% say the lack of proper tools to easily adjust pricing quickly is a challenge, 13% say geo-based pricing and 4% say other.

Plus, 44% of retailers say they are somewhat concerned they cannot adopt to optimize pricing quickly, and 17% say they are very concerned.

Amazon is No. 1 in the Internet Retailer 2019 Top 500.

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