Prime Day 2020 Insights

A jumpstart to everyone’s week was the launch of Amazon’s annual event, Prime Day. It officially started on October 13^th (although Prime members got early access to the Amazon smart device deals on the October 12^th) and ran through the end of day October 14^th.

Our Marketplace and Retailer Optimization team, in conjunction with our Performance Delivery thought leaders, spent the week gathering real-time insights on how the week played out.

1.    Analysts were optimistic with their predictions

• Global sales were expected to reach $9.91B (+43% YoY) (eMarketer) with U.S. accounting for 69% of those sales (Stastista).
• Stock markets were also optimistic, opening +25pts and closing +70pts on Tuesday, October 13^th.

2.    Prime Day had a positive impact on iProspect clients

• For the first day of Prime Day, all KPIs increased 5x to 6x and ROI improved nearly 2x vs. a typical Tuesday this month, despite Prime Day happening in October 2020 vs. July 2019
• Prime Day initial sales are looking as good on Amazon as July of last year.  This is despite sales still coming in through the attribution window for this year.
• It is important brands still capitalize on the second day of Prime Day, where they can expect a similar 3-4x increase in demand over the two-day period as seen in 2019 even though demand on the second day is typically lower.
• Paid Search volume was flat overall and for general brand terms and shopping ads.
• Paid Social volume saw a slight 5% increase in impressions across all industries with CPG seeing the largest increases.

3.    How competitor’s piggy backed off of Prime Day

• The fact that Prime Day is an Amazon promotion, other retailers/brands (big and small) are capitalizing by offering their own deals often rebranded as “Fall Sales” and promoted on their websites and ramped up email efforts. Some retailers have amplified Prime Day deals in their traditional paid search, search engines, and Amazon efforts.

4.    Consumers are more overwhelmed and skeptical

• Consumers have become even more Prime Day pros this year, where they are now searching for specific flash/lightning deals on Amazon to maximize what they know about how sales tend to work.
• Consumers have come to expect deals from other retailers/brands during Prime Day, as reflected in their search behavior for their brand terms last year during Prime Day. They aren’t just looking for heavy hitters running deals, they also want curated lists to be sent to them vs. having to shop around.
• Beyond the clear benefit Prime Day has for Amazon Prime members, non-Prime members and deal hunters alike are also winning by taking advantage the saturation of deals in the marketplace, but this is also causing consumers overall difficulty figuring out who has the best deals and where. To manage the overwhelming number of options this year, people continued to look for highlighted deals across Buzzfeed, Reddit, and more category-focused sites like The Wirecutter, and are more aggressively searching for “best non amazon prime day deals.”

• For consumers who don’t already have a gift in mind, these sales can be viewed as incremental rather than holiday shopping starting super early.
• Prime Day was trending #2 on Twitter on October 13^th before dropping down below the SCOTUS hearing hashtags, while overall Prime Day chatter was a mixed bag of sentiments, as expected.
  • Some themes in conversations reflect consumers’ lifestyle changes driven by the impact of COVID-19: “buyaninstapotday”, “hiker” and “camper”
  • Various brands stand out as popular, ranging from big-and-obvious (Beats by Dre, Vera Bradley, Gucci) to relatively niche (Aftershokz, Solimo, Osmo Pocket)
  • Some people were excited by some of the deals while some people were highlighting injustices with phrases such as “amazoff”, “makejeffbezosevenricher” and “workersoverprofit”
  • Some people unhappy/cynical that the pricing went up on a lot of products before they came down, the discount value was low, or the sheer volume of deals were “overwhelming.

5.    What we shouldn’t forget about Prime Day

• Prime deals are for Prime members, helping drive up membership up to 95 million in the U.S., per the last report, representing a huge household penetration.
• Looking back, Amazon started Prime Day during a non-traditional promotional period. To quote our head of innovation, Jeremy Hull, when Prime Day was first started in 2015 as an anniversary event for the website, he said “Amazon created a sales event out of thin air!” This is because the event of deals happened in the middle of July, a period not known to get shoppers parting with their cash. Other retailers over the subsequent years followed with their own sales promotions. The day also extended from one day of promotions to two days and other retailers have followed this trend.

Three Key Takeaways

Amazon’s ability to successfully “create an event out of nothing” remains unmatched.

Amazon pivoted Prime Day to October this year (vs. July in previous years), a decision driven out of necessity due to supply chain issues caused by the COVID-19 pandemic. Additionally, they officially announced this year’s Prime Day dates with only 3 weeks’ notice. Despite the changes this year, Amazon was the clear winner, capturing the majority of the surge in shopping interest and activity seen during the event.

Prime Day has made consumers more savvy, enthusiastic but also more skeptical.

While consumers have become Prime Day shopping pros, they are also aware other brands typically run their own deals in tandem. Consumers have become more invested in, and critical, when looking for and comparing deals. To manage, consumers have turned to category-focused sites to compare deals and would rather have curated lists presented/sent to them to ensure they are getting the best deal possible.

Other brands continue to benefit from the Prime Day halo-effect.

For iProspect retail clients, we observed lifts in front-end and back-end conversion performance comparable to Prime Day last year. To best cater to and win over these sophisticated shoppers, brands need to evolve their communication and promotional strategy around the deals their offering and focus on why now is the right time to take advantage of them. Furthermore, brands should account for consumers who are holding off on pulling the trigger as the Turkey 5 is next month.

In a year of unpredictability, Amazon’s Prime Day continues to hold strong as a successful sales event, ultimately forcing other retailers to offer their sales events to keep up with consumer activity. We are excited to see what momentum we’ll see for retailers from this event as we head into the holiday season.