What Retailers Can Learn From Amazon Prime Day - Lift361

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What Retailers Can Learn From Amazon Prime Day

By Ed Higdon. Posted in Action | Insight

July 16, 2018

In case you haven’t heard, Christmas has come in July once again for Amazon Prime members, as July 16, 2018 marked the fourth annual Amazon Prime Day. With this self-created “holiday” offering deep discounts for Prime members, Amazon continues to set trends that other retailers can learn from.

What Is Amazon Prime Day?

Amazon Prime Day is a one-day sale showcasing limited-time deals on selected items. Items are “unveiled” at specific times of the day, and a countdown clock lets shoppers know just how long they have to take advantage of that deal. Only members of Amazon Prime are offered sale prices, which also drives new membership signups for the Prime service.

Prime Day debuted on July 15, 2015, in celebration of Amazon’s twentieth anniversary. Despite criticisms that sales were far too limited, Amazon Prime memberships increased and the company boosted sales in a month where profits traditionally slumped. Considering it a resounding success, they put on the event again in 2016. The second year, they added hundreds of items to the sale and it became Amazon’s highest-grossing sale to date, outpacing even Black Friday and Cyber Monday.

In 2017 and 2018, Amazon promised to keep increasing the number of items on the sale list, lengthening the sale time from 30 to 36 hours, and expanded Prime Day into new countries.

What Retailers Can Learn From Prime Day

Prime Day is all about boosting sales during one of the lowest-grossing months of the year, and though the sale always makes headlines, the underlying concept isn’t exactly new. Many department stores hold semi-annual sales in June and July for this exact same reason. However, retailers of all sizes can still learn from Amazon, and apply those lessons to their own stores. Some of the biggest benefits Amazon generates from Prime Day include:

  • Increased Sales: Summer is often the slowest time of year until back-to-school rolls around, but Amazon managed to turn Prime Day into its biggest sales day of the year. By leveraging data to target deals that customers want, retailers of all sizes and strips can do the same.
  • Increased Memberships: Prime Day is exclusively for Prime members and Prime Day always sees a boost in new memberships. Making sales exclusive by offering the deepest discounts to members in an email list or loyalty program, retailers can generate more signups. After all, no one wants to be left out of great deals.
  • FOMO: Prime Day is really a series of Amazon “Lightning Deals,” sales that run for a set period of time. Sale items are displayed on a customer’s sign-in page with a countdown timer letting them know how much longer the deal will run. This creates a sense of urgency and pressure – if the customer waits too long the sale will end or the stock will run out. Limited deals can create a fear of missing out (FOMO), that motivates spend.
  • Test New Strategies: On Prime Day 2017, Amazon tested Prime Air, an air cargo service. This event let them run a limited test on large orders to see how it might be applied on a larger scale. Semi-annual events are a great time to test “wish list” strategies.
  • Spotlight on Branded Products: The main focus of Prime Day deals are Amazon’s branded products like Kindle, Echo, Amazon Basics, and now Whole Foods. Branded events like Prime Day can be an effective way for retailers to expose customers to their own branded products, when applicable.

Amazon continues to set trends that retailers can learn from, but the true key to success lies in taking a great idea and making it your own. Amazon’s strategies work because they study each Prime Day’s successes and failures and improve upon them the following year to deliver exactly what customers want. Since 2016, they’ve widened item selections, expanded the sale hours and added new surprises and twists.

Every retailer is unique, and any special deals should be specifically tailored to their unique customer base. By leveraging customer data, retailers can customize their own “holiday” sale that will boost revenue. Retailers can also take this concept and apply it throughout the year. By digging into customer data to discover exactly what their customers want, retailers can devise new ways to boost sales during slower days of the week and months of the year.