The fanfare surrounding Amazon’s third annual Prime Day has come and gone, but the soul searching in the retail world has likely only just begun.
In 2017, Prime Day emerged as the internet retail giant’s biggest sales day, beating both traditional heavyweights Black Friday and Cyber Monday. It also helped to solidify Amazon’s market-leading position when it comes to getting people to use its Alexa-powered voice assistants like Echo Dot. The voice enabled speaker was Amazon’s best-selling product on Prime Day thanks in part to a 30% discount that put the price at $35, a sales surge that may spur more people to use it to buy more products from Amazon.
And don’t forget the key benefit of Prime Day for Amazon: Driving Prime membership sign-ups, hooking new users into Amazon’s ever growing ecosystem of products and services.
It all worked this year: “Tens of millions” of Prime members globally bought something on Prime Day, more than 50% above last year, Amazon said. While Amazon didn’t give any specific sales figures, a Hitwise study found that Prime Day 2017 yielded 9.5 million transactions on Amazon.com, the biggest day of the year and topping Black Friday and Cyber Monday. The number was almost double the 5.1 million transactions Hitwise measured on the first Prime Day in 2015.
For the rest of the retail sector, Prime Day is simply another sign of the challenges faced by retailers, especially brick and mortar stores.
“July (traditionally) is relatively a slow month,” said IHS Markit Executive Director Chris Christopher in an interview. “Amazon Prime Day is cannibalizing brick-and-mortar retail sales in August and moving them into online in July. That’s lowering the traditional channel for back to school sales in August.”
Winning more of the back-to-school business, the second-largest US selling period after the critical holiday sales, certainly appeared to be on Amazon’s mind: Market Track data showed 22% of Prime Day deals were on back-to-school related categories .
“Amazon has successfully generated its own off-season shopping holiday, creating the opportunity to drive significant revenue in what is typically a seasonally slower quarter,” said Robert W. Baird & Co. analyst Colin Sebastian. “Our checks with online sellers indicated that trends on other marketplaces also benefited from the shopping holiday, suggesting Amazon's efforts may also be providing a slight boost to the broader e-commerce market.”