A Delayed Launch

Following previous supply-chain shortages and delivery delays faced during the early days of COVID, Amazon is taking a cautious approach to this year’s Prime Day. Operations at their warehouses have normalized, but as COVID remains widespread, their approach to the high-traffic annual shopping event could be threatened.

To mitigate these factors, Amazon is postponing Prime Day to a later date this year. Jeff Bezos himself approved the delay, along with temporarily burying Amazon’s daily deals landing page to help meet demand. This page, however, has since resurfaced and scaled back up. To proactively combat supply chain issues, Amazon hired 175,000 new workers to meet the growing demand.

• Reports show Prime Day is postponed until October 5th as a placeholder date, but not yet confirmed.
• For India, Prime Day occurred August 6-7. India just became the third country to hit 2 million coronavirus cases following Brazil and the U.S. This helped Amazon test and learn Prime Day performance within the pandemic, successfully increasing their Prime subscriber base by 1M and having 91,000 small businesses participate- a record high.

Look to the Past to Inform the Future

Prime Day is entering its 6th year of the iconic deals-filled shopping extravaganza that commemorates Amazon’s anniversary through expansive discounts for its Prime members. Over the years this has grown and evolved from curated, priority deals within a single day to incorporating live entertainment from celebrities. Lightning deals have seen historic success by prompting urgency among shoppers.

• Last year, 175M items were sold totaling $7.16B, a 71% increase YoY-surpassing Cyber Week and Black Friday as the largest sales event ever.
• It continues to cast a global reach as 18 countries participated last year.

What Brands Should Activate? Prime Day isn’t for every brand.

Categories best fit for Prime Day include consumer-packaged goods, consumer electronics, home technology, gaming equipment, luxury beauty and products with high margins that can withstand reducing their price point for deals. Low margin items are completely out of consideration, but if you’re looking to reduce excess inventory, this could be a great opportunity to do so.

Not on Amazon? No, Problem

Since its inception, Amazon Prime Day has inspired other retailers to create similar discounts on or near Prime Day to compete with the behemoth-seeing a 66% lift in revenue.

• Last year, Best Buy and Walmart saw an increase in search traffic of 255% and 130%, respectively.
• eMarketer saw 7 in 10 Prime Day shoppers in the U.S. will look outside of Amazon to comparison shop during Prime Day.
• Similar to previous years’ strategy, these retailers may continue to implement their own sales event before Amazon’s prospective fall date to reach consumers itching to stock up on deals.

What to Expect this Year

• Expect at least a two-day event similar to past years. This could include more preview deals over the weekend prior to Prime Day to help ramp up excitement and consideration.
• COVID has caused shortages and elevated price points for many products impacted by the stay-at-home orders. Consumers should expect for categories in cleaners, fitness, kitchen and home office to not have as many deals.

What if there is No Prime Day?

Although a cancellation of Prime day is unlikely, it is still a possibility. Amazon may have difficulty operating warehouses and distribution centers efficiently and safely while also meeting the short-turnaround delivery expectations of shoppers. With Back to School and Holiday around the corner, Prime Day could become merged with either of these to amplify sales.

What can brands expect if that occurs? Sales/Deals could be shifted to Black Friday and Cyber Week while also expanding the window for the entire month of November and early December.

How Can Brands Prepare Now?

• Although Lightning Deals deadline closed June 5th, stay in close contact with Amazon or agency partners to identify opportunities for Prime Day.
• Do not discount pursuing other retailer opportunities to help draw awareness and drive sales with similar events.
• Identify the brands/products that are best suited to be reduced to captivate shoppers looking to stock up.
• As Prime Day potentially shifts to the fall, think about the seasonality of your products and how those could help drive further consideration to be front and center on Prime Day.