Prime Day is almost upon us, and analysts' predictions are in. Given the momentum of the first two years and the previous announcement that Amazon will start deals earlier (and include bonus deals for voice-activated purchases), the probability of greater sales than in 2016 is quite good.
Amazon saw a five percentage point increase in the number of shoppers who shopped on Prime Day in 2016, up from 20% in 2015, according to data from Kantar Retail. Additionally, the number of shoppers who purchased on Prime Day grew from 5% in 2015 to 7% in 2016.
And once again, Kantar Retail is expecting a record day for the e-commerce giant. Amazon will force demand during an otherwise quiet retail month, and the event will also be a test for Amazon’s fulfillment and logistics network before the holiday season.
In addition, Kantar says that Amazon will likely capitalize on shoppers’ heightened interest in its fashion and grocery propositions as a result of its latest news in these two categories. As such, Amazon will leverage Prime Day promotions to create incentives for shoppers to try new programs, such as sample boxes, subscriptions, and Prime Wardrobe.
Specifically in the grocery category, Amazon will look to draw shoppers to its various consumables channels, including Amazon Fresh, Prime Now and Prime Pantry, to appeal to shoppers exploring its grocery options after its acquisition of Whole Foods.
"From a global perspective, Amazon will tailor the positioning of Prime Day 2017 to the developmental stage of each market," said a spokesperson from Kantar. "In established geographies, the objective of Prime Day will be to underscore Prime’s critical role in members’ routines, while in countries like Mexico, where Prime is still in its infancy, the tone will be more about recruitment."
And what about all those who are not Amazon? How are they preparing for the big day?
According to data from retail analytics company EDITED, in the last six weeks retailers have discounted heavily. The average discount is currently 39.9% off—the biggest discounters including Lord & Taylor, Bluefly, ASOS, Neiman Marcus and Bon-Ton.
In addition, the number of products experiencing their first discount over the July 4 weekend increased 51% year over year. However, sellouts have dropped by 15% within the same time frame, indicating that retailers have higher stock levels on the reduced items—or that consumers are less enticed by the sales.
"While last year there was little response by online retailers to Amazon Prime Day, this year we’ve witnessed a deluge of discounts ahead of July 11, particularly in apparel," said Katie Smith, senior fashion and retail analyst at EDITED. “However, discounting shouldn’t be the knee jerk reaction to driving sales—shrewd retailers will dig into their data and trends to boost overall performance this year.”
Bazaarvoice, the provider of consumer-generated content, advertising, and personalization solutions, found in a recent study exploring the shopping habits of more than 400 Amazon Prime Day shoppers in the U.S. that consumers also engage and shop more with other online retailers on one of the busiest days in e-commerce.
In 2016, across some of Bazaarvoice’s top online retailers, Bazaarvoice saw a 15% increase in visitor traffic on Prime Day 2016 in comparison to a typical day. Additionally, the number of orders increased by 38% and conversion rates increased by 19%.
Therefore, the study suggests that brands should bolster visibility across multiple online retail channels to maximize sales opportunity, as 76% of Prime Day shoppers visit other major online stores to research product ratings and reviews before making a purchase on Amazon. The top places they look include Walmart (46%), consumer electronics websites (45%), Target (40%), home improvement websites (39%) and brand websites (39%).
In addition, ratings and reviews play a huge role in purchasing decisions on Prime Day. Bazaarvoice's data shows that 46% of Prime Day shoppers are not likely to purchase a product if it does not have ratings and reviews. In fact, 56% of shoppers always read ratings and reviews before making a Prime Day purchase, and 80% consider ratings and reviews important to their purchase decision. Additionally, 45% of shoppers will buy a product they have never heard of or used before based only on ratings and reviews.
“As one of the biggest online shopping days of the year, many consumers discover and try new brands on Amazon Prime Day,” said Sara Spivey, chief marketing officer at Bazaarvoice. “But participation in Prime Day is not the only way for brands to get in front of online shoppers. As our study and network data show, consumers are researching and buying products across multiple online retailers on Prime Day and the availability of ratings and reviews across these retail channels can help inform and influence their purchase decisions.”