What Brands Can Learn From Amazon Prime Day
Amazon’s annual Prime Day only started in 2015, but it already shares the same popularity as other consumer-driven holidays, like Black Friday and Cyber Monday. Typically scheduled in July, this global shopping event promises a day and a half of huge deals for Amazon Prime members. Its given new meaning to Christmas in July, not only for its success, but also for the responding sales that pop up from big-box ecommerce competitors like Walmart and Target.
Despite the competition, each Prime Day has been a big success for Amazon, helping them sell more memberships to their paid subscription service and more Amazon label products like the Echo. It’s also a boon to brands who advertise on Amazon. With options to participate in the day’s deals, brands can win a huge share of the Prime audience with the right planning. Just look to Instant Pot, which sold 300,000 of its pressure cookers during Prime Day 2018.
If you’re wondering how this ecommerce giant pulls off such a popular and high-value event each year, there are several lessons to take away. Whether you advertise on Amazon or you’re simply looking to apply some lessons to your brand, here’s how to get in on the frenzy.
Create a Sense of Urgency
Amazon’s smartest play during Prime Day is capitalizing on the psychology of urgency. Tactics that play on urgency encourage consumers to overcome passive or procrastinatory shopping. Shoppers suspend their careful decision-making tendencies when they perceive an urgency behind acquiring a good.
In the past, Prime Day has lasted just 30 to 36 hours. While Amazon might choose to lengthen the time in 2019, it’s not likely they’ll extend it much further, or they could lose out on this urgency effect. With such a narrow time frame for big sales, consumers must make decisions and act on them quickly, generating tons of sales in a short period of time. It’s the same phenomenon that causes stampedes at shopping malls on Black Friday. While ecommerce isn’t quite as dangerous, Amazon has grappled with site outages due to the huge influx of site visitors on Prime Day.
Time isn’t the only way to create urgency. Amazon also plays with the scarcity bias, which causes people to want something that seems unavailable more than they would if it was widely available. Using Lightning Deals on Prime Day, consumers see a status bar that shows how many deals are left to be claimed on a product.
These aren’t new concepts in commerce, but Amazon has perfected urgency tactics in an ecommerce setting. Brands can do the same when they run sales events by showing countdowns and timers, displaying product availability, or using urgent language.
Consider Exposure in Addition to Sales
Prime Day, as its name suggests, is for Prime subscribers. The massive site-wide sale is an advertisement for the Prime membership plan in itself, as non-Prime members miss out on all the sales, as well as ongoing membership perks like free two-day shipping.
As Amazon has expanded its own branded retail lines, the day has become a vehicle for promoting its own products and further folding consumers into the Amazon ecosystem. As they were introduced, Fires, Kindles, and Echos were steeply discounted on Prime Day. On the last Prime Day in 2018, seven of the 10 best-selling products were from the Amazon lineup. With an ever-expanding offering that includes devices and private label brands, it’s likely that Prime Day will continue to grow as a channel for marketing Amazon-branded products and bringing consumers into the Amazon ecosystem. The success shows how promotions can not only move product – they can also create huge exposure for your brand.
Amazon isn’t the only benefactor, though. The company estimates that small and medium-sized businesses exceeded $1 billion in sales from the last Prime Day. The top-selling products included the Instant Pot, 23andMe DNA kits, and the LifeStraw Personal Water Filter. These sellers worked with Amazon months in advance to prepare for the event, shipping their products through FBA and applying for discounts like Lightning Deals and Amazon Coupons.
If you sell (or could be selling) products on Amazon, think of Prime Day as the ultimate opportunity to get in front of consumers. With careful planning and preparation, you can gain considerable brand awareness – and sales – through Amazon’s business model.
Think About Long-Term Opportunities
Prime Day might only last 36 hours, but it drives sales over a much longer period of time. During the 2018 Prime Day, Amazon welcomed more new members than any other day in its history. These new members entered the funnel to take advantage of Prime Day deals, but they stay in the funnel well beyond the event, with some becoming life-long members.
Amazon charges an annual fee of $119 (USD) for Prime membership. Looking for ways to optimize their membership, users spend more on the site – an average of $1,400 each year, compared to the $600 non-members spend on average. This isn’t the only way Amazon sees incremental returns from Prime Day sign-ups and purchases. Many users buy Amazon products at their discounted Prime Day prices, including Kindle and Fire. It’s intuitive, then, to make further purchases that make that hardware functional, like Kindle eBooks, Prime Video subscriptions, and more. Seeing this relationship, Amazon also discounts those services on Prime Day.
It’s a showcase of how short-term sales can become an engagement tool that drives brand loyalty and return purchasers. Even if your brand doesn’t offer ecommerce subscription or membership models, you can use promotions to push the products and services that are most likely to keep consumers in the funnel beyond a single purchase.
Focus on Omnichannel Marketing
Prime Day doesn’t just happen on Amazon.com. As the event has grown, so too have the marketing channels and the ways to redeem savings. The company harnessed newly acquired Whole Foods to issue grocery shoppers $10 rebates on Prime Day purchases. Leading up to and during the event, shoppers also received double their regular rebate on Amazon purchases up to $400 using their Amazon Prime Rewards card. By expanding the rewards to members’ brick-and-mortar shopping, the company not only encouraged more spend from their Prime network, but also opened up a new marketing channel to entice non-Prime members.
As one of the world’s biggest brands, it’s not surprising that Amazon invests in equally large marketing stunts. Before Prime Day 2019, the company delivered giant boxes bearing the trademark Amazon smile to five cities around the world. New York, Milan, London, Tokyo, and LA unboxed live concerts, movie screenings, celebrity meet-and-greets, and more in these experiential marketing pop-ups.
Combined, these tactics make for so much more than an online sale. Amazon is meticulous in treating Prime Day as an event, rather than a rote promotion. With unique out-of-home experiences, community and network savings, and creative marketing, brands can similarly expand their reach and boost sales.
Applying Lessons From Prime Day
Amazon is dominating ecommerce, gaining market share in many consumer goods categories. Fundamental to their success is the Prime ecosystem. It’s this membership that helps them recruit and retain lifelong customers. Prime Day is simply an extension of this ecosystem – a huge event, held each summer, to fold more consumers into the Amazon way of life.
Brands looking to apply these Prime Day lessons should focus on customer service and retention. Promotional events should be built around a sense of exclusiveness and urgency to bring new customers into the fold and please existing customers. If an expensive promotion isn’t in the cards, it’s still possible to emulate the customer journey of a Prime member by paying close attention to how you develop brand loyalty. Think of every short-term sale as an opportunity to drive incremental revenue, and use omnichannel marketing to reach a wider audience of potential users.
Amazon Prime Day 2019 will be on Monday, July 15 and Tuesday, July 16.