Back in July, Amazon announced its decision to postpone Prime Day, its annual summer sales event for Prime members, to revamp its logistics operations for an expected surge in online orders and for the development of safety protocols to keep its warehouse workers safe. With millions of customers stuck at home during the COVID-19 pandemic, the e-commerce giant already had seen a significant jump in orders that tested the limits of its supply chain.
And now, the day online shoppers have been waiting for are (almost) here. Prime Day is finally happening… tomorrow! It is specifically exciting in Singapore, given that this will be the first installment in Singapore with Amazon.sg since its launch last year.
And if prior years are any indication, the event promises to generate massive sales for Amazon – as well as for competing retailers – and mark the unofficial beginning of the holiday shopping season.
“As we’ve seen in past years, Amazon Prime Day has turned into a big day for retail overall, as large retailers and even smaller merchants plan promotions and deals around Prime Day,” says Michael Klein, global director of strategy and marketing for retail, travel, and consumer goods at Adobe. “They want to take advantage of the eyeballs that are going to be out there looking for deals, and we expect the same to be true this year.”
Biggest Prime Day… ever?
Experts believe that this could be the biggest Prime Day to date, with Sonia Lapinsky, managing director at consulting firm AlixPartners pointing out that working from home allowed shopper to not have to hide their behavior from bosses or in open cubicles. Michael Klein also highlighted that with the longer shipping and available deals, shopper are thinking ahead and starting their holiday shopping early.
While Amazon doesn’t disclose revenue figures for Prime Day, its 2019 sales is estimated to have jumped 71% to $7.16 billion worldwide year over year. Online revenue overall is expected to increase even more this year amid major changes in shopping behavior, with many consumers limiting their trips to malls and stores.
According to Adobe’s Digital Economy Index (ADI), the pandemic has resulted in an extra spending of $94 billion since lockdowns went into effect in March. All told, online spending reached $434.5 billion from January through July 2020, per ADI, and at current growth, could exceed 2019 levels.
What does this mean for retailers?
With Amazon’s ability to bring out online shoppers in droves, retailers need to be preparing their own sales events to grab a piece of the online shopping pie. Last year, major retailers — those with at least $1 billion in sales — saw an average lift in revenue of 68% during the two-day event, according to Adobe research. Small and midsize retailers also saw a significant increase in online sales of 28%.
That halo effect has been evident in other ways. In 2018, 37% of online shoppers said they looked at other online retail sites on Prime Day, and 51% of shoppers who browsed a non-Amazon website or app during Prime Day bought something.
Adobe’s “Making the Holidays Happy: Guide to Evolving Marketing Strategies During COVID” research found that despite the current climate, 78% of consumers are planning to spend just as much or even more for the holidays, with 39% reporting that they are making online purchases more than before. If retailers are to thrive and survive in what’s expected to be a very different holiday buying season, the delivery of positive customer experiences is what will allow them to rise above the crowd.
With consumers spending more time at home, they’re more likely to see more online promotions from retailers. Retailers are reacting to this consumer shift and starting promotions earlier. Prime Day will further accelerate this pull-up of holiday season, promotions, and spending.