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Tuesday, July 11, 2017

Prime Day a blockbuster for Amazon

Amazon.com Inc. expects its third annual Prime Day, taking place today, to be the highest-grossing day in U.S. retail history. Greg Greeley, Vice President at Amazon Prime, said revenues from Prime Day 2016 were 60 percent higher than its previous year, with Kindle e-Readers, Alexa-enabled devices and Fire TV among the top-selling items.

Calling Prime "the best deal in the history of shopping," Greeley thanked millions of Prime members around the world for purchasing 90,000 TVs and more than 2 million toys. Half of 2016 sales originated in the United States, where more than a million customers used the Amazon app, Alexa and dash buttons, he noted.

Analysts see retention, acquisition play

Retail analysts see the worldwide membership drive as critical to Amazon's brand leadership. Tom Caporaso, Chief Executive Officer at Clarus Commerce, said sales are secondary to Amazon's Prime Day strategy; the company's main objective is to incentivize members, who spend up to five times more than non-Prime consumers throughout the year. "By rewarding Prime customers ‒ both old and new ‒ with exclusive perks and deals, Prime Day serves as a retention and acquisition event for Amazon, and reinvesting in their customer base reinforces and increases that loyalty," he said.

Mike Ackerman, President of DigiPay Solutions Inc., added, "Amazon's July sales event is about more than generating revenue in an otherwise slow shopping month. Their larger goal is to encourage shoppers to sign up for a Prime subscription, which offers free two-day shipping and other perks for members. This membership locks customers in, encourages them to be loyal and spend more money with Amazon."

Ackerman commended Amazon for turning the sales event into a blockbuster, noting the company has disrupted the way people shop. Prime Day's substantial increase in sales volumes is directly linked to its increase and diversity of offers, he stated.

Multiple countries, companies participate

Sellers from around the globe are offering their best deals of the year, and the company's logistics teams are coordinating with thirteen countries participating Prime Day 2017: the United States, United Kingdom, Spain, Mexico, Japan, Italy, Germany, France, China, Belgium and Austria, Amazon representatives stated.

In the days leading to Prime Day 2017, Amazon began a virtual countdown to the event, staging daily deals to highlight member benefits, as follows:

  • July 5: Voice Shopping
  • July 6: Amazon Music
  • July 7: Prime Video
  • July 8: Everyday Essentials
  • July 9: Reading with Prime

While Prime Day officially began July 11, Greeley said Amazon opened the sale at 9 p.m. Eastern, 6 p.m. Pacific on July 10, to give members 30 total hours to shop. The company is staging new deals every five minutes, and special offers for all products and services included with Prime membership ‒ from music and video to reading and voice shopping, representatives stated.

In addition to Amazon's spike in top-line revenue, numerous downstream merchants have benefitted from prior Prime Days, including small and midsize Amazon marketplace sellers who have seen orders triple year-over-year since the event's inception, the company noted.

Amazon stated that approximately 40 percent of its Lightning Deals, which feature a limited number of items for a short period of time, come from small businesses and entrepreneurs around the world. Emily Wilcox, founder of Fayebeline, said her company quadrupled the number of sales on Prime Day 2016, compared with its previous best-selling day. Bridget Hilton, founder of LSTN Sound Co. said, "Amazon gives small businesses an amazing opportunity to get in front of a new audience with Prime Day." end of article

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