TECHNOLOGY

Analysis: Prime Day a success in the eyes of consumers

BY CSA STAFF

Amazon's third annual shopping event scored big with those who counted most, according to InfoScout and Market Track’s survey of shoppers on Prime Day.

Not only did a majority of shoppers make a purchase, but they also had positive reviews of the selection of products offered, pricing, and their willingness to continue shopping Prime Day in the future. In survey results, 52% of respondents agreed that Prime Day offered the lowest prices of the year, and 87% agreed that they would continue to shop Amazon Prime Days if they have them. Seventy-percent of survey respondents agreed that Prime Day offered a great selection of products.

"Many of the concerns consumers expressed on social media about the first two Prime Day events — specifically, the product selection — seem to be an afterthought," commented Ryne Misso, director of marketing at Market Track. "Shoppers had a more positive reaction to the deals available this year. Whether that’s a testament to better products being featured, or to Amazon’s efforts to improve the overall Prime Day shopping experience, perception seems to have shifted."

According to Misso, the survey data from Prime Day shows Amazon has solidified Prime Day as an annual event that shoppers will mark on their calendars.

"Close to nine out of 10 shoppers intend to shop Prime Day in the future, should Amazon continue to have the sale," he said.

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TECHNOLOGY

Prime Day knocks it out of the park — and not just with record sales

BY Deena M. Amato-McCoy

Amazon’s third annual Prime Day was its biggest shopping event yet — and the biggest day in its history for signing up new Prime members.

The 30-hour shopping extravaganza for Prime members generated approximately $1 billion in revenue, according to initial estimates from analysts at Cowen & Co. and JPMorgan Chase & Co. (Some estimates put the total even higher.) Amazon itself did not provide hard sales numbers, but said that sales grew by more than 60% compared to last year’s event, with a "record number" of Prime members shopping across 13 countries.

Amazon said the event was its "biggest day ever," with sales that surpassed the retailer's results on Black Friday and Cyber Monday in 2016. It appears that Prime Day 2017 stayed true to its inaugural mission: to reward and retain Prime members — and lure new ones. Tens of millions of Prime members made a purchase during the shopping marathon — more than 50% higher than the prior year, Amazon said. It also said more new members joined Prime on July 11 than on any single day in Amazon history.

Among the deals snagged by shoppers included Callaway Golf products, headphones, Nintendo Switch consoles and premium brand 4K smart TVs. Amazon’s Fire TV was the best-selling TV deal in Amazon history, selling through record units in less than four hours, according to Amazon.

However, the most coveted category throughout the sale was Amazon’s Echo family of smart speakers. In fact, the event marked record sales in the U.S. and globally for the Amazon devices, including its Echo, Fire tablets and Kindle.

Prime members’ most popular purchase was the Echo Dot, which was on sale for 30% off. Besides being the top-selling Amazon device, the Dot was the best-selling product from any manufacturer in any category across Amazon.

“Amazon announced it sold seven times more Echo devices globally on July 11 than the entire 2016 Prime Day sale,” said Tom Caporaso, CEO, Clarus Commerce.

“These sales are an interesting indicator of how important Echo — and artificial intelligence-based devices in general — are for Amazon,” he added. “Echo customers already spend 10% more than non-Echo shoppers. Prime Day was a great way to introduce people to the Amazon ecosystem and get the device integrated into more households and the lives of customers.”

And Echo users were out in droves, using the speaker to place orders throughout the shopping event. “What Amazon does well is remove the pain points of shopping,” he added. “Voice commerce removes friction and makes it easier to place orders —which drives up sales for Amazon.”

The adoption of these smart devices proves that consumers are warming up to more solutions in the Internet of the Things (IoT) ecosystem — and the benefits they offer. From controlling functionality in a smart home to streamlining e-commerce orders,

“Echo Dot is paving the way for connected devices to become new e-commerce channels,” said Ofer Klein, CEO, Kwik. “IoT devices enable brands to build direct relationship with consumers to increase sales, loyalty and customer engagement.”

Eager to take advantage of the uptick in online traffic and shopper excitement, more retailers did get in on the action this year by launching competing summer sales. Traditional retailers like J.C. Penney, Kohl’s and Office Depot to online competitors Newegg and 1-800-Flowers.com were among the many brands that grabbed their own summer sale wallet share.

Where traditional retailers can get a leg up on the agile e-retailer going forward however, is to combine their online presence with their physical locations. The result is a differentiated omnichannel experience that drives customer convenience and instant gratification.

“Prime Day’s success is another wakeup call for retailers everywhere. So many other retailers still miss the point that order fulfillment is critical to customer loyalty,” said Nick McLean, CEO, OrderDynamics. “Not all retailers can offer the world’s biggest product selection, but many can combine their online and physical presences.”

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TECHNOLOGY

Deloitte: Back-to-school shopping trends include early start, shift to mass merchants

BY Marianne Wilson

Retailers who wait until late summer this year to launch back-to-school deals are only hurting themselves, because early shoppers will spend more than late starters.

That's according to Deloitte's "2017 Back-to-School Survey," which also detected a big shift in where back-to-school will be shopping this year. One thing that hasn't changed: In-store still prevails.

Sixty-percent of back-to-school shoppers plan to hit stores by the end of July, spending an average of $532, which is 16% higher than the remaining 40% of parents who will start shopping in August or later, according to Deloitte. Those later shoppers are projected to spend only about $458 per student.

Deloitte, which polled 1,200 parents of school-aged children in grades K – 12, found that shoppers expect to spend an average $501 per student on back-to-school this year, on par with last year. The total spend is expected to hit an estimated $27 billion.

The survey revealed a shift in where parents will be doing their back-to-school shopping. The majority of survey respondents (81%) plan to shop at mass merchants, a 24% increase over last year. Off-price stores also gained fans, climbing to 28% from 10% in 2016.

Department stores and specialty apparel stores, however, are losing favor. Twenty-eight percent of respondents plan to shop traditional department stores this back-to-school season, down significantly from 54% last year. And only 8% of parents plan to visit specialty clothing stores, falling from 25% in 2016.

The survey also picked up a shift in the type of goods parents are buying this back-to-school season. Clothing and accessories are expected to account for 55% of families’ spending this year – up 10% from last year – mostly at the expense of school supplies and computers.

“With today’s technology-based education system there is less need for traditional school supplies, likely contributing to the shift toward more spending on clothing and accessories before children head back to school,” said Rod Sides, vice chairman, Deloitte LLP and U.S. retail, wholesale and distribution practice leader. “Part of this shift may also come from the popularity of preconfigured school supply kits, which 30 percent of families plan to use."

Deloitte recommends that retailers make an effort to target the “undecided” back-to-school shopper – shoppers who don’t know whether they will shop online or in-store. Such shoppers are more likely to choose retailers that offer free shipping (68%), buy online and return to store (52%), and offer loyalty programs that provide faster or cheaper discounts when shopping online (49%), the study found.

“Retailers should aggressively pursue the ‘undecided’ consumer because they collectively represent nearly $5.4 billion this back-to-school shopping season,” Sides said. “This segment is up for grabs but likely to go to retailers that draw customers in early with promotions and digital experiences that make store visits even more attractive, like inventory visibility, order tracking or buy online/pick up in store.”

For more findings, click here.

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