Prime Day: did consumers just flirt with Amazon or are they in it for the long haul?
Bravo - a brilliant marketing play, with Amazon Prime Day, the company takes control of their own destiny during a quarter where retail takes a back seat to the travel and entertainment consumer needs of summer. The company creates massive hype, drives new prime members and ultimately billions in revenue, not only for them, but for the retail industry overall.
Consumers ran around with their heads on fire, grappling for the best deals. They even crashed the site (or so they say, it remains to be seen if that was a cleverly engineered PR ploy).
But does Prime Day have the lasting effect that it is meant to and will Amazon retain new, loyal customers? Do consumers see past the disguise of a flash sale to Amazon’s push for new subscriptions? Let’s take a look.
The undeniable benefits of creating your own 'holiday’
Back in 2015, Amazon created their own holiday at a time of year that is typically quiet for the retail industry. What started off as a “fake holiday” has now cemented itself as an annual event that consumers look ahead to and continues to grow year over year.
In the inaugural year, 2015, Amazon drove nearly $1bn in revenue, up 69% in 2016, 59% in 2017 and that upward trend is expected to continue in 2018 with a predicted $3.4bn over the 36-hour period.
Prime Day excels in reaching consumers and driving sales for items they weren’t necessarily in-market for. Amazon capitalizes on consumer fear, pushing “can’t-miss deals” that make many fear they will be missing out if they pass on the opportunity
Better to have loved and lost than to have never loved at all?
With the focus so far on the days leading up and the actual 36 hours of Prime Day, it’s time for Amazon to switch gears and consider how they can hold onto those expected new prime members, especially as competitors such as eBay and Walmart are waiting in the wings to catch them as they fall off. Just how many prime members will stick, and how many will switch? In a world of low brand loyalty will the pay off be as great as they anticipate if they don’t have a solid retention strategy in place?
Analyzing the weeks leading up to Prime Day, comparing the first of the month to the day prior to Prime Day, Captify’s Search Intelligence saw a 725% increase in users searching for Amazon Prime Trials, a 284% increase in users searching around Amazon subscriptions, and a 422% increase in users searching around deals.
The users that were searching around Amazon Prime were also searching for trials four times more than your average user on July 15th, the day before Prime Day. Looking at the days following Prime, one can can’t help but think, how many of these users will be short-term Amazon Prime subscribers and how many will last?
Comparing the day before and after, Captify’s Search Intelligence saw a 60% drop off for users searching for Prime trials. At the point consumers are searching for membership are they simultaneously already thinking of leaving? Captify also saw a 23% increase in users looking to cancel their Prime accounts on the day after Prime Day compared to the day before. Additionally, there was 4189% increase in users still looking for deals on Amazon, indicating that the effect of Prime Day stretches beyond the 36-hour time period as consumers continue to seek out deals.
How can Amazon spot those that will stick and not bother trying to reach those who will switch. You could ask if it’s better to have loved and lost than never to have loved at all? That remains to be seen as only time will tell.
Should Amazon be expecting a thank you card from Walmart and eBay?
With the initial hype, Amazon causes macro effects across the entire retail industry - both online and offline.
No one can refute, it’s a successful day for the online retail giant. But how are they measuring success? Sure, they are experiencing massive spikes in revenue, but they are also creating massive opportunities for their biggest competitors.
We saw it last year and again this year, the hype created around Prime Day gives competitors an unintended advantage. The impact of Amazon Prime Day on the overall retail sector is evident as consumers search for Amazon's competitors to compare prices and deals.
Throughout the week leading up to Prime Day, Captify’s Search Intelligence saw increases in searches for Amazon and many of the big retailers. Searches for Amazon were up 544%, while searches for Best Buy were up 712%, Walmart 143% and eBay 27%.
Since Prime Day is only for members, competitors capitalize on non-prime members, drawing in consumers that Amazon isn’t reaching in the 36-hour period. Additionally, they keep their prices low and deals front and center in hopes of enticing even the prime members away from Amazon, at least for non-Amazon products.
Prime Day has caused massive ripple effects for both consumers and retailers, but on the whole all good things for the industry. So take a breather. Take stock and restock. If retail can curate this kind of marketing magic in July, the best is yet to come in Q4.
Dominic Trigg is chief revenue officer at Captify