The Amazon Prime Day bonanza: Cynical commercialism or smart sales strategy?

By Will Harvey, innovation lead

July 14, 2015 | 5 min read

Marking the 20th birthday of the online retailer, tomorrow Amazon will be hosting 'Prime Day' – a newly-created day of sales and promotions exclusive to Amazon Prime members. And it looks like it won’t be scrimping on the celebrations either as Prime Day is set to have better deals than Black Friday, which has been the busiest shopping day of the entire US calendar since the early 2000s.

Prime Day appears to be a culmination of Amazon’s efforts over the past few years to expand its offerings beyond a simple supply and demand relationship with its customers. These include own brand products such as the Kindle, Fire phone and the recent Echo smart speaker, which sit alongside services such as Prime Video and the expansion of its delivery product range to encompass Amazon Now and Prime Air (the drone delivery trial). And all of these features will now be included in the new Prime subscription, at a discounted price of £59.

Prime Day could see a very strong spike in new memberships, as it stirs up people's excitement leading up to midnight because – let’s admit it – we all love a good sale.

It is clearly hoping to piggyback the US post-Thanksgiving Black Friday model, which first jumped across the pond last year to the UK and was adopted by multiple retailers including Topshop, Currys and Tesco.

With retailers having to work harder than ever to make us part with our cash, the increasing trend of creating 'holidays' for potential new customers to 'celebrate' is working well. Long gone is the wait for the post-Christmas January sales to grab a bargain; retailers are now slashing prices mid- and sometimes even early-December to boost takings. Cyber Monday follows the infamous Black Friday, and Super Saturday is your ‘last chance’ to get that great deal in time for Christmas. The control that these offers have over our seasonal purchasing behaviors is clearly working well, and doesn’t appear to be going away anytime soon.

At the moment, Prime Day may just be a one off, but I wouldn't be surprised to see it again in 2016 as an annual event, or perhaps even more frequently. But is it a clever or risky move on the part of Amazon?

Creating a standalone sales frenzy which it completely controls of course removes the worry of standing out against competitor brands. However, the risk lies in the consumer seeing through the marketing ploy. After all, Amazon hasn't tied itself to an actual holiday – it has just created one around itself.

Despite this, I do feel that I will eventually become an Amazon Prime customer. The decision to ring fence these services under a subscription model – giving exclusive access to both premier content and competitive deals – is a clever strategy, and one that I think will sway consumers.

It could also open the floodgates for more retailers and brands to follow its lead, and shift the intense end-of year spending behaviors to a more fluid model in order to help sustain sales figures all year round – although even as I write this, Walmart is launching a counter sale to coincide with Prime Day, so perhaps the competition will catch up with Amazon quicker than expected.

Overall, I do believe that Prime Day will drive subscription – it covers a broad range of services under the Prime umbrella. As consumers are increasingly drawn to subscription services for music, TV and film – such as Netflix and Spotify – this takes it one step further, bringing all of these products together to create an entertainment one-stop shop, and a simple, easy user experience.

I think the Average Joe consumer that is currently sitting on the fence could be swayed by this Prime Day push – in particular the temptation of the almost immediate delivery of their products. This, paired with the strong exclusive content Prime will be trialing over the next few months, is sure to grab people's attention. The more clued-up consumers will be completely aware of what Amazon is trying to do with Prime Day – but in the end, it is offering a very competitive and inclusive deal, which is want customers want.

Regardless of my opinion, I for one will definitely be ready and waiting tomorrow to see what Prime Day has in store.

Will Harvey is innovation lead at VCCP


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