Is it Black Friday in July or just a red Wednesday? Following Amazon's Prime Day promotion, major retailers like Walmart and Target have joined the competitive fray with their own e-commerce deals, along with other significant players like Best Buy and Groupon. But the question is: to what end?
Amazon has a clear goal of boosting Prime membership and Walmart, which has launched shipping initiatives to compete with Amazon Prime, has an incentive to show it is in the game. Target meanwhile revealed a bit of confusing advertising. Initially, its "Black Friday in July" sale was on "Wednesday and Thursday only," then was later extending its buy-one-get-one offers on clothes, shoes and accessories through Saturday, July 18, but with no mention of the "50% off electronics, home appliances, toys & more" hyped in ads last week.
In advance of the Wednesday online deals, Best Buy sent out promotional emails for a "Tuesday Techday Sale," and Groupon put out a 20 percent discount offer for local deals on Wednesday.
The results of all this activity could not be determined by noon on Wednesday, the FierceRetailIT deadline, although questions about website bandwidth, fulfillment and, most importantly, margins, had yet to be answered. Online comments regarding some promotions, notably Amazon's, were lukewarm about the offers.
Traditionally, Black Friday—the day after Thanksgiving—was seen as the day retailers first turned a profit for the year. Could this be seen as "Red Wednesday", a day that could deepen mid-year losses? Time will tell.
One expert raised several issues that Amazon, and others, will need to answer.
"Amazon Prime's exclusive sale will be a true test for the age of rapid customer-demand," said Jeff Rauscher, director of solutions design for Redwood Software. "Consumers now want their goods delivered at the touch of a button—and speed is increasingly becoming the key to customer satisfaction. The Amazon servers must be equipped to deal with the inevitable surge in online activity, and the vast amount of data being transferred.
"This will be a real test of e-commerce infrastructure resilience. As long as the retail giant has back-office processes in place to deal with the increase in website traffic, customers will be happy with the service they receive now, and for future sales to come."
Multiple crashes of retailer websites were reported on past Black Fridays, and delivery times became an issue with bad December weather.
Back-end "behind the scenes" processes are becoming increasingly more visible, and retailers' financial success not only depends on actual sales, but on their ability to process sales and have smoothly integrated online and physical offerings, along with seamless customer service, Rauscher said.
Process automation is the key for business-critical activities such as handling orders in the retail space; streamlining operations; reducing the chance of errors and freeing up valuable resources; strengthening the back office; and ensuring the stability retailers need to sustain consumer confidence in the busy period.
It may be that retailers learned from the problems they encountered on previous Black Fridays, and expect less traffic than the fourth-quarter selling season. Amazon has limited its offers to Prime members, although it is also offering a 30-day free Prime trial. We may be seeing a new online and omnichannel selling opportunity evolving, or it may go away in the next annual cycle. It is truly too early to tell, but everyone interested in online retailing will be watching. – Dan