Retailers Leverage Prime Day to Boost Offline Sales
This post is the latest in our “Disrupting Retail” series. It’s our editorial focus for the month of July, including topics like in-store innovation and Amazon’s moves. See the rest of the series here.
Four years after its inception, Amazon Prime Day is still picking up steam. More than 70% of shoppers say they plan to participate in Prime Day this year as consumer anticipation and excitement around the shopping event continues to grow.
Prime Day has become a major driver of revenue for Amazon. Although Prime Day sales numbers are not released by the company, analysts have estimated that the event generated $1 billion in sales in 2017 and more than $4 billion in 2018. During the 36 hour Prime Day event in 2018, Amazon accounted for 86% of all transactions made online.
Unlike other shopping “holidays,” like Black Friday and Cyber Monday, Amazon Prime Day is specific to a single retailer. But as the event grows, other retailers—both online and offline—are finding ways to leverage the anticipation that consumers are feeling.
“For consumers, Amazon Prime Day is all about finding the best deals, but they’re not necessarily always loyal to the host of the event,” says Tom Caporaso, CEO of Clarus Commerce, a company that develops loyalty programs for retailers.
Last year, 63% of Prime Day shoppers said they visited competing websites to compare prices. This is a major opportunity for online retailers to capitalize on the spike in traffic and provide consumers with personalized and targeted offerings and exclusive deals.
Walmart is launching a counterattack against Prime Day this year, offering thousands of deals online between July 14 and 17. Walmart is hoping to steal some of Amazon’s thunder by publishing its discounts during the same time period when Amazon’s event is live. Other major retailers rumored to be offering discounts during this year’s Prime Day events include Target and Macy’s.
Unfortunately, during a period of intense promotions—like Prime Day, Black Friday, or Cyber Monday—it’s not enough for brick-and-mortar retailers to focus all of their energies on beating Amazon. This is especially the case now that so many other retailers are running their own promotions during the same time period. According to Julien Gautier, marketing director at the analytics platform ActiveViam, brick-and-mortar retailers should be testing new ways to adapt to both Amazon’s aggressive discount strategy and the behaviors of their other competitors.
“Simply put, you need a smarter, larger approach than just alignment with Amazon to be successful on Prime Day,” Gautier says.
The Offline Approach to Prime Day
With the majority of consumers preferring to research online and shop in-store, businesses should leverage the anticipated surge in online searching during Prime Day to their advantage, explains Collin Holmes, founder and CEO of Chatmeter.
To many, Amazon is seen as a search engine more than a retail store. Consumers are increasingly searching for products on Amazon before clicking over to Google—an important part of retail’s transformation. Still, Holmes says that what Amazon can’t compete with—yet—is a consumer wanting to check out a certain product in-store or have it immediately. That push for immediacy is something Amazon is working to capture with same-day delivery, but it’s also a weak spot that traditional retailers with brick-and-mortar stores should be pouncing on.
“If you find a deal on Prime Day but want that experience, you’re apt to Google Search its availability nearby—and this is where brands with optimized keywords and accurate listings will have leverage,” he says.
Brands with optimized local search terms and fully updated listings and profiles from Google My Business and Yelp are more apt to be found in a voice search. And with the anticipated spike in Alexa searches on Prime Day, Holmes says now is the time for brands to update and optimize their “searchability” factors.
Analytics are also critical in the offline retailer’s ability to react smartly to Prime Day traffic surges.
“Chasing after Amazon on a day like this runs the risk of crushing your margins without necessarily succeeding in preserving your price-image — or how your pricing aligns with the brand image you are trying to project,” Gautier explains. “Modern analytics can enable competitors to home in on which products they should chase Amazon on and what products they should leave as is so that they can have a strategy that reaps the most rewards on one of retail’s most hectic days.”
Rolling out discounts to compete with Amazon on price is challenging for many physical retailers. Doubling down on local search optimization and closely monitoring website analytics is a safer approach, especially when coupled with a push into voice search and mobile shopping apps.
Changing Face of Retail
One of the major trends to come out of Amazon’s Prime Day, and other shopping events happening outside the traditional holiday season, like Nordstrom’s Anniversary Sale, is that consumers are growing more accustomed to shopping year round on mobile apps.
According to data from the mobile app marketing and retargeting company Liftoff, highs and lows across the cost and conversion rate curves are less extreme in 2019 than in previous years, indicating engagement with mobile shopping apps has become a more integral part of the daily routine and less impacted by seasonality. This could be related to the increase in branded shopping “holidays” created by mega-retailers happening throughout the year.
“Whatever the cause, consumers seem ready to spend year-round,” says Liftoff CEO Mark Ellis.
Looking at year-over-year trends, Ellis says Liftoff is seeing that users are more affordable to acquire and more apt to engage. November, a month when users are primed to make purchases for shopping holidays like Black Friday, is a month when marketers can usually get value for money, as the cost per first purchase is moderate and install-to-purchase conversion rates are high. As Prime Day grows even more influential in the coming years, retailers can expect to see similar values during the lead-up to the annual summertime event.
“Savvy shopping app marketers are thinking about the full user experience and lifecycle, online and offline, and integrating app marketing into their holistic marketing strategy,” Ellis says. “Whether it’s a push notification, an email with a deal or a targeted TV commercial, marketers are thinking about how to reach the user as close to the point of conversion as possible.”
Stephanie Miles is a senior editor at Street Fight.