Amazon Prime Day 2018 — More Than Just Good Deals!

Amazon Prime Day 2018 — More Than Just Good Deals!

ECommerce news has been overrun by articles on Prime Day.  As is typical for Amazon, full details regarding the results of Prime Day are sketchy with lots of analyst reports floating around citing estimated sales of over $4 billion.  But some information has been made available which confirms the success of the promotional day. For example:

  • Amazon sold over 100 million products in the 36-hour period from July 16-17
  • Amazon added the largest number of Prime members on July 16 of any single day in its history, claiming it added “tens of millions” of new members
  • The biggest selling product was the Fire TV Stick with Alexa Voice Remote. Echo devices also were big sellers, due in large part to $100 discounts on Echo Show and Echo look plus great deals on Echo Spot
  • Other big sellers included 300,000 Insta Pots and 23 & Me DNA test kits

Most of us see Prime Day as yet another mega-sale event like Black Friday, Cyber Monday or Singles Day, yet there is more going on than a huge retail event.  One of the primary objectives of Prime Day is to enroll more consumers in Amazon’s Prime membership. Prime members buy at least twice as much as non-Prime members, so Amazon certainly is motivated to add members. In addition, the other benefits of Prime such as Prime Video or Whole Food discounts can help solidify consumer loyalty.

Amazon has become a retailing behemoth and its ability to continue growing at its historic rate will eventually subside. However, significant growth is still possible by broadening its offerings to categories such as pharmaceuticals and by innovating the customer experience as it has done with Echo devices.

Ordering via Echo not only makes ordering more convenient but essentially single-sources customer purchasing.  While ordering routine household supplies like paper towels or laundry detergent via voice is easy and bears little risk for consumers, ordering other items requires visual confirmation by consumers to ensure comfort in their purchase decision. The Echo Show and Echo Look are intended to provide this level of comfort in shopping for items where vision is a key component of the purchase decision.

Indeed, the huge discounts on Echo devices during Prime Day are likely to be an effort to make voice ordering from Amazon pervasive behavior among its Prime members.  It is estimated that Echo penetration of Prime members is about 20%, so there is room for broader adoption.

So, beyond the great discounts on merchandise, Amazon has longer-term, strategic goals for Prime Day focused on attracting and retaining loyal customers and enhancing the customer experience along multiple dimensions.