Amazon’s ‘little gift’: How Prime Day helps other retailers

Prime Day is no longer just about Amazon. It’s now a way other retailers can reach customers while they shop for deals there.

Prime Day, which began three years ago, has evolved to a 36-hour online deal blitz beginning on July 16. Amazon uses it to reinforce the value of Prime membership, the $119 per year program that’s attracted 100 million members globally. If last Prime Day is any indication, large retailers will aggressively push competing offers.

For example, throughout July, Walmart, which pushes “free two-day shipping with no membership fee” is offering customers $10 off orders of $50 or more for pickup orders. Last year, Prime Day coincided with cut-price deals from other retailers, including Best Buy, which offered 40 percent off major appliances, and Macy’s, which took 60 percent off selected items.

“This is a little gift that Amazon has given the retail industry,” said Forrester principal analyst Sucharita Kodali. “It’s a random day in July when there isn’t a huge burst of demand, so any increase you’re going to see, even if it’s 3 or 4 percent lift [in sales], is a good one for a lot of retailers.”

For retailers growing their e-commerce strategies, Prime Day is important boost ahead of the back-to-school season. RetailMeNot, an e-commerce platform that works with consumer brands to promote offers and on customer acquisition strategies, said it’s seen a consistent uptick in the number of retailers adding deals that overlap with Prime day. Between 2016 and 2017, the number of retailers issuing deals on increased 340 percent.

“It’s become a pivotal day that’s benefited Amazon as well as other retailers and speaks to the changing consumer,” said GBH Insights chief strategy officer Daniel Ives. “It shows how much e-commerce has changed with Amazon leading the charge.”

Prime Day has become the largest traffic driver to in the third quarter, surpassing the back-to-school season, said Michelle Skupin, senior director of corporate communications at RetailMeNot.

Prime Day sales are expected to hit $3.4 billion this year,  a 30 percent year over year lift, according to retail think tank Coresight Research. It said it expects Amazon to focus promotions on its private-label products. While Amazon’s Prime Day lets competitors capitalize on the opportunity through competing offers like Black Friday and Cyber Monday, the similarity ends there, said Keith Anderson, svp of strategy and insight at Profitero. This is an Amazon-branded event, after all, and its core goal is to expand the Prime member base and build lifetime loyalty.

“For Amazon, the bigggest reason they do this is to drive new Prime memberships — that’s a formula of success that works for Amazon but for very few other retailers,” he said.

Despite Prime Day’s piggyback effect on competing retailers, and opportunities it offers them to acquire more customers, the uniqueness of Amazon’s Prime offering still gives it a leg up. While other retailers may compete on price, the Prime program’s unique bundle of benefits — including discounts at Whole Foods and online streaming video — is unparalleled in the industry, Anderson said. Although it may result in some follow-on sales, to truly compete with the likes of Amazon, retailers should be pairing the offers with ways to entice the new customers to make return purchases, he said. One way to mimic Amazon’s strategy is to add incentives for customers to sign up for newsletters, email lists or join loyalty programs, he added.

“There are a million ways other retailers can use the excitement of a day like Prime Day without competing symmetrically [with Amazon],” he said. “Amazon is taking proven promotional vehicles and tactics that they’re enhancing and adapting for the e-commerce age — most competitive retailers are not ready.”

Subscribe to the Digiday Retail Briefing: A weekly email with news, analysis, interviews and more covering the modernization of retail and e-commerce.

More in Marketing

In the marketing world, anime is following in the footsteps of gaming

As marketers look to take advantage of anime’s entry into the zeitgeist, they might be wise to observe the parallels between the evolution of anime as a marketing channel and the ways brands have learned to better leverage gaming in recent years. 

With the introduction of video ads and e-commerce, Roblox looks to attain platform status

Roblox is expanding into more areas than just ads in 2024. Much like platforms such as Amazon and Facebook have transcended their origins to evolve from their origins as online marketplaces and social media channels, Roblox is in the midst of a transformation into a platform for all elements of users’ virtual lives.