When You Can’t Beat Them, Join Them: A Look at Amazon’s Prime Day

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If you’re an independent retailer, chances are you’ve got some strong feelings about Amazon. One of the world’s largest retailers, and the undisputed king of online sales, Amazon is very difficult to compete with. Their Prime program in particular generates lots of customer loyalty and repeat business: after shoppers have invested $99 to belong to the program, they tend to shop Amazon first to justify their membership expense.

Amazon celebrates this program with a shopping holiday they’ve created, called Prime Day. This year, Prime Day was on July 12th. There were many, many special deals and promotions available that day exclusively to Prime members. The result? Amazon captured 74% of all online sales made that day. Nearly three out of every four purchases made on Prime Day were made on Amazon.com. That’s a jaw-dropping statistic – and it leaves other businesses wondering exactly what they’re going to do about it.

Option Number One: Beat Amazon at Its Own Game

Nearly half of the largest online retailers ran their own special deals and promotions on Prime Day. Macy’s, Kohl’s, and J.C. Penney were among those attempting to go head to head with Amazon. Most experienced a surge in online traffic – Macy’s saw a 41.1% spike! – but everyone’s keeping mum about actual sales figures. J.C. Penney told Internet Retailer that they plan to use the same tactic next year as well, although they’re not sharing any specifics of their savings holiday just yet.
Trying to compete with Prime Day is the retail equivalent of capturing football fan’s attention during the Superbowl. It’s possible, but it’s not necessarily going to be easy. Amazon ran 181 email campaigns in the 13 day period leading up to Prime Day; that involved sending 179 million emails. If you have no idea how your business would even begin to replicate that massive task, welcome to the club: most independent retailers are in exactly the same boat.

Option Number Two: Work with Amazon to Boost Your Sales

While the idea of working with Amazon is anathema to some retailers, the news that Vivere, a small Canadian company that sells outdoor furniture, sold 24,000 hammocks on Prime Day certainly raises eyebrows. Even taking into account that participating in Prime Day requires discounting your prices at least 20% and paying Amazon fees that average about 15% of selling price, that type of sales spike is hard to ignore. In a single day, Vivere sold what they typically sell in six months.

They weren’t the only small business to benefit. In 2015, approximately 40% of Prime Day sales came from small businesses selling on Amazon; given that participation nearly doubled in 2016, that number very likely went up even more.

Deciding whether or not you want to work with Amazon is a very personal decision every retailer will want to make on their own. But there’s no doubt that considering adding Amazon as an additional sales channel is worth investigating, if only to take advantage of special events like Prime Day and to gain access to the ranks of Prime-first shoppers who do the majority of their purchasing on Amazon.

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