The fourth iteration of Amazon’s day (and a half) celebration of all things Amazon Prime was the biggest to date. Not just in terms of the offers on site but also in terms of Amazon’s promotion of the event both on and off line.

Launched in 2015, Amazon Prime Day is an annual day of exclusive deals exclusively for Amazon Prime members. For the 2018 edition, Amazon expanded its usual single day of deals to a day and half, running from 12 pm on July 16 through to midnight on July 17.

The Prime Day ticket

Prime Day has grown to be Amazon’s largest trading day worldwide, bigger now than Black Friday. However unlike Black Friday it is not open to all but of course only to those with an Amazon Prime membership, or indeed a well-timed free trial.

The data below from Mintel’s Online Retailing – UK, July 2018report shows that some 25% of consumers have access to Amazon Prime meaning a significant proportion of the UK population had access to Prime Day. This rises significantly to 36% of those aged 16-34, in part due to Amazon’s cut-price Prime offer to students but equally because of the attraction for this group from some of the added extras such as Prime Video and Music.

Figure 1: Membership of Amazon Prime, March 2017-18
Base: 2,000 internet users aged 16+

“Are you, or have you ever been a member of Amazon Prime?”

[graphic: image 1]
Source: Lightspeed/Mintel

The biggest event to date, on and offline

Ahead of the event Amazon announced that rather than a single day of deals, it was to expand Prime day to a day and a half. In truth Prime day stretches further than this, discounts on select products appeared the week leading up to the event across the main retail site and Prime Video.

However at 12 pm on the 16th of July the main event started and the Amazon site transformed, the usual homepage was replaced with a Prime Day landing page highlighting various ‘deals of the day’, timed ‘lighting deals’ and broad discount by category. Notably there was also a section containing tips and tricks for Prime Day. A criticism of Amazon Prime Day, and indeed its Black Friday sales, is that the sheer quantity of products on offer makes the browsing experience unruly something that Amazon was clearly keen to address with its new landing page.

Figure 2: Amazon UK home page – Prime Day, July 2018
[graphic: image 2]
Source: Amazon website

Interestingly the offers of Prime Day were not confined simply to the Amazon site online. Several retailers, who are partnered with Amazon through its Amazon Pay scheme, also got involved including All Saints. This Pay with Amazon scheme could become more important to Amazon moving forward with mass-media coverage of GDPR placing greater emphasis and control on security online. Indeed Mintel’s Online Retailing – UK, July 2018Report found that 44% of online shoppers think it is safer to use personal data saved on other accounts, such as Amazon, when checking out with a new retailer.

Figure 3: All Saints Prime Day offer, July 2018
[graphic: image 3]
Source: All Saints Facebook

For the first time Amazon Prime Day was not constricted to simply the Amazon website. Ahead of the day itself Amazon marketed the event with a free 'Unbox Prime Day' event which hosted movie showings and a performance from the music band Take That.

Figure 4: Take That at Unbox Prime Day, July 2018
[graphic: image 4]
Source: Amazon PR

Amazon’s physical promotion of Prime Day did not stop there, with giant ‘Smile’ boxes placed around London and the Treasure Truck (see: Amazon's Treasure Truck rolls up in the UK) out in force across major UK cities.

This is also the first Prime Day since Amazon was handed the keys to Whole Foods and as such its grocery chain, now confined just to a handful of London stores, also got involved. Exclusive discounts were available to members in-store from the July 13-18, whilst the Whole Foods store in Kensington hosted a Prime Day Lounge featuring complimentary drinks, beauty treatments and music.

Figure 5: Amazon Smile Boxes London, July 2018
[graphic: image 5]
Source: Amazon PR

The deals: a broader market place

Whilst Prime day serves as an important vehicle to drive Prime membership, it is the deals which are the major draw for shoppers.

Both ahead of and following the event Amazon has released a number of eye watering statistics around Prime Day. The 2018 event boasted 50% more spotlight deals, deals that run throughout the event, than in 2017 with more than one million products entering promotion globally during the event. The 2018 event itself was by the retailer's own metrics its largest shopping event with 100 million products sold during the event.

In terms of the products on offer, a majority will be very familiar to those who have shopped with Amazon either during Black Friday or Prime Day in the past. Of course central to the event are Amazon’s own consumer electronics (CE) with such events a key vehicle in driving sales amongst Echos, Kindles and Amazon’s other CE products. Indeed the Fire TV Stick and Echo Dot were two of the best-selling products globally during the 2018 event. Amazon’s use of such events to drive own-product sales is clearly working well with Mintel’s Online Retailing – UK, July 2018Report finding some 45% of UK households contain at least one Amazon-made product, rising to 73% of Prime members.

Figure 6: Amazon devices Prime Day 2018, July 2018
[graphic: image 6]
Source: Amazon website

Amazon own-brand fashion was also given centre stage, with brands such as Find all given a spotlight. Away from Amazon’s own products there were the usual partnerships with brands and manufacturers, such as Bose and Philips, which have become a common sight during past sales. Indeed new for this year was Prime Day Launches which saw many established, such as LG, and smaller brands debut products for the first time exclusively on Prime Day.

What was also different this year is that Amazon gave greater focus to its marketplace sellers, including those on the core site or through Amazon Launchpad or Amazon Handmade. During last year’s event 40 million items were purchased from marketplace sellers on Amazon, and ahead of Prime Day 2018 Amazon looked to engage more of its sellers to join Prime Day. This focus clearly helped drive sales for its sellers, with Amazon saying that its SMEs saw in excess of $1 billion in sales globally during Prime Day 2018.

Figure 7: Amazon Handmade Prime Day 2018, July 2018
[graphic: image 7]
Source: Amazon website

Rivals retreat?

Prime Day has established itself, like Black Friday before it, as a staple in the UK retail calendar. It is of course a day just for Prime members, but still draws significant spending and as such in the past we have seen rivals look to launch rival promotions. Last year both ao.com and Currys PC World were notable players, however as we argued in the write up of last year’s event (see: Amazon Prime Day UK 2017) going toe-to-toe with Amazon through blanket discounts was not healthy, both for the individual retailer and indeed the wider online sector where 58% of consumers already believe frequent promotions online mean you don’t need to pay full price for items.

There was a notable lack of engagement from those who had done so in the past in 2018. John Lewis and ao.com had select deals but this was part of a wider promotion, not uncommon for July. Argos had a flash sale ending the same day as Prime Day, as did Currys which ran a day of limited time promotions during the day. However nothing was to the scale of ao.com’s blanket £40 off all products over £399 seen last year.

What was particularly interesting about the Currys promotion was that it was sponsored by Google, with Google Home products taking centre stage. Google and Currys have a long standing relationship, having worked on pop-ups for the launch of many of Google’s latest devices (see: Dixons Carphone and Google partner for another pop-up) but the prominence of Google Home devices was a clear reaction to Amazon promoting its Echo device heavily during Prime Day. Amazon has taken an early lead in the smart speaker market, as highlighted by Mintel’s The Connected Home – UK, May 201813% of households currently have such a device with 76% of these owning an Amazon Echo, but it is clear Google is not willing to allow this lead to grow.  

Figure 8: Currys PC World event, July 2018
[graphic: image 8]
Source: Currys PC World website

What it means

Prime Day is over for another year and by all accounts it was another success for Amazon, both in terms of sales but more importantly for its ecosystem. Amazon said it welcomed more new Prime members on July 16 than at any other point in its history. This is the real crux of the day for Amazon, to get consumers into the scheme because once in Amazon knows they buy significantly more than those without Prime. 

For the rest of the retail sector there seems to have been a more concerted effort to let Amazon have its day this year. It is hard for any business to cede ground, particularly when Amazon seems to be only gaining ground with or without Prime Day, but going toe-to-toe with Amazon on a day it pours millions into promoting seems unwise, particularly when there are 364 other days not claimed by Amazon.

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