Amazon.com Inc. and its marketplace sellers are gearing up for the retail giant’s sixth-annual Prime Day sales event this week. Digital Commerce 360 projects Amazon will sell more than $9.70 billion this year, up at least 36.0% year over year, making this Amazon’s biggest sales event ever.
Amazon doesn’t disclose sales figures of its Prime Day event, but Digital Commerce 360 estimates gross merchandise sales worldwide hit $7.16 billion during the 48-hour sale July 15-16 in 2019. And this year—with another 48-hour event—sales will likely jump between 36%-42%, according to our analysis. Comparatively, gross sales during Prime Day grew 70.8% in 2019 from $4.19 billion during Prime Day 2018 (a 36-hour sales event).
This year’s growth is considerably slower than 2019 growth, but that’s mainly because Prime Day was 12 hours longer in 2019 than in 2018, which led to a big increase year over year. When analyzing growth even further and looking at sales by hour, Prime Day sales grew 25% on average each hour in 2019 compared with 2018. Comparatively, Digital Commerce 360 is projecting at least a 36% growth on average per hour this year compared with 2019.
The biggest factor fueling growth for Prime Day this year is the increase in online shopping in 2020 as a result of the coronavirus pandemic. Statewide stay-at-home orders, store closures and fear of contracting the coronavirus in public pushed many consumers to ecommerce—some for the first time. And Amazon, as the No. 1 online retailer in North America, was a beneficiary of the increased traffic to online retail sites. In the second quarter ended June 30, Amazon’s worldwide online sales grew 33.5%, a hefty increase for a retailer of its size.
With this year’s Prime Day just a month-and-a-half away from retail’s major Black Friday/Cyber Monday holiday sales events (which fall on the Friday and Monday following Thanksgiving Day), it will be interesting to see if consumers will purchase more holiday gifts on Prime Day this year than they have in the past. Digital Commerce 360 analysis shows the bulk of Prime Day shopping in previous years was consumers purchasing goods for themselves rather than holiday gifts.
This year, however, 21% of consumers say they will begin holiday shopping in September and October, and 18% have already started, according to a Digital Commerce 360 and Bizrate Insights survey of 1,000 U.S. online shoppers in September 2020. If consumers are already starting to think about holiday gifts, this may factor into higher growth on Prime Day.
But Amazon may not be the only winner on Prime Day. Other large retailers are offering competing sales at the same time as Amazon’s sales event. Target Corp. (No. 12 in the Digital Commerce 360 Top 1000) and Walmart Inc. (No. 3) have both announced sales events during Prime Day, with Walmart’s Big Sale event Oct. 11-15 and Target Deal Days Oct. 13 and 14. More than half of shoppers plan to either purchase or browse on Walmart or Target during Prime Day. 13% plan to purchase and 37.3% plan to browse at Target while 11.1% plan to purchase and 42.6% plan to browse at Walmart, according to a survey of 416 U.S. consumers fielded Oct. 6 by research firm Coresight Research.
Other retailers offering big discounts on their websites during Prime Day include Kohl’s Corp. (No. 21), Office Depot Inc. (No. 20) and 1-800-Flowers.com Inc. (No. 64). This means consumers may be shifting their spend on Prime Day from Amazon to other large retailers. This may be especially true this year because, during the peak of the pandemic, many consumers did turn to other retailers when Amazon.com ran out of stock or had long delivery times.
How marketplace sellers prepared for Prime Day
Web-only office supplies retailer Jam Paper & Envelope is offering fewer-than-usual Prime Day deals this year because of Amazon’s heightened restrictions, likely due to the event’s proximity to key holidays and many Amazon warehouses already at capacity. Other retailers Digital Commerce 360 spoke to also said Amazon approved fewer deals this year than in past Prime Days.
“In normal times, I think most sellers are shipping their Q4 inventory in October [as are we]. Between [Amazon’s] warehouses being filled with Prime Day inventory and holiday inventory, I think Amazon just has a capacity problem right now,” Kelly Ennis, director of marketplace strategy and analytics, says. “That’s also coupled with the fact that people are ordering more online this year than previous years, and there are more Prime members now than ever.”
Prime Day deals are only available to Prime members. There are more than 150 million Prime subscribers, Amazon said in January. That’s up from 100 million Prime members in April 2018. On July 15, the first of last year’s two Prime Days, Amazon signed up more new Prime members than any previous day and nearly matched that record on July 16, the retailer says. It’s likely Amazon signed up even more Prime members during the height of the pandemic in Q2.
Still, Jam Paper has a work-around for fewer Prime Day deals: It will offer discounts and coupons on some products that aren’t a part of Prime Day deals to take advantage of increased traffic on Amazon this week, Ennis says.
“This year is tough because Prime Day is usually in July, so our data about items we should focus on can’t be used to forecast this year,” Ennis says. “But combined with items we know do well on past Prime Days, and what we typically sell in October, we’ve come up with a good assortment to throw coupons on this year.”
Jam Paper has offered coupons on Prime Day in the past and has seen “great results,” Ennis says. They’ve seen customers looking for specific items that aren’t offered as a Prime Day deal, so they try to “win the sale” with coupons. Now with Prime Day inching up on the holidays, the retailer is focused on offering coupons on holiday items like wrapping paper.
Some retailers who participated in Prime Day in the past have opted out of offering Prime Day-specific deals this year. Online-only holiday décor retailer Christmas Central, for example, is focusing on Black Friday/November sales plans instead of participating in Prime Day, a spokesperson said. The company expects to see an uptick in sales on Amazon even though it doesn’t have specific Prime Day deals; therefore, it has marked down seasonal items such as inflatable pools and patio items on marketplaces.
“We have seen an increase in Christmas sales since mid-September,” the company says. “Customers are buying early this year. We want to focus on being prepared Nov. 1, when we believe we will see an even greater increase in sales.”
Similarly, board game retailer Exploding Kittens is offering a deal for Prime Day this year, chief operating officer Carly McGinnis says. The retailer gets a small percentage of sales on its own website, with the majority of sales coming from major mass merchants it wholesales to, including Amazon, Target and Walmart.
Exploding Kittens usually experiences a sales lift for a week surrounding Prime Day across all of its channels, as many of its wholesale accounts offer competing promotions that also spur sales.
“It’s such a big monumental event that [Amazon] created in the middle of summer,” McGinnis says. Prime Day’s typical July date is great for a toy brand, which usually is in a valley of sales after Easter and Q3, she says.
But she’s not sure what Prime Day 2020 will bring. “I have no idea what is going to happen this year, it’s such a unique year,” McGinnis says.
Exploding Kittens’ sales across all of its channels increased 100% year over year throughout 2020. When it’s having these heightened sales week after week, it’s hard for the retailer to know what the appetite will be for Prime Day.
Prime Day 2019 had a three- to five-times sales lift over a typical day, McGinnis says. The brand does plan to offer a deal for Prime Day 2020, but she doubts the two-day sales event will spur that type of increase over her already heightened sales in 2020.
April Berthene contributed to this article.Favorite