Amazon maintains price advantage on Prime Day

7/11/2017


Early indications are that competitors didn't give Amazon much competition price-wise on Prime Day.




The third annual shopping extravaganza, which kicked off on July 10 at 6 pm PST and was scheduled to run until the wee hours of the morning of July 12, was originally introduced as a way to reward existing Prime shoppers and attract new ones. With promises of new deals every five minutes, the company reported on Tuesday that customers worldwide are shopping at “record levels,” according to CNBC.



It appears that Prime Day deals enjoyed a competitive price advantage, even against the many retailers that held their own shopping Prime Day promotions and attempted to match their price. Indeed, Amazon offered "compelling" discounts on Prime Day this year, featuring an average savings of 40% off, according to an analysis by Market Track.



"Amazon maintained a distinct competitive price advantage on Prime Day deals even against retailers that attempted to match their price, said Ryne Misso, director of marketing for Market Track. “In a price comparison on over 50 Prime Day Deals, Amazon was priced 15% lower than Walmart, 29% lower than Jet, and over 40% lower than Best Buy and Target, on average. However, both Walmart and Jet matched Amazon’s price on several Prime Day Deals.”



Almost 24 hours into the sale, the top shopped categories were “home chefs,” “for the home,” and “techies.” Across the techies category alone, “Amazon has already sold more than twice as many Echo family devices than last year's full Prime Day in the U.S., and more than three times worldwide,” said Amazon spokeswoman Lynsey Kehrli.



Prime members have also already ordered millions of items from small businesses and entrepreneurs. These top selling items include the 23andMe DNA Test and Senso Bluetooth headphones, Kehrli added.



Deals offered by Amazon’s third-party sellers had, on average, a 45% discount vs. a 35% discount for items shipped and sold by Amazon.



Amazon used a variety of methods to spread the word about its deals, including mobile-based flash sales.



“Amazon’s flash sale technique grabs consumers’ attention by offering an almost gamified experience where consumers have limited minutes of time to take advantage of that sale on their mobile devices,” said Casey Gannon, VP of marketing, Shopgate.



Amazon took care also to make it easier to place orders — as well as receive them. For example, the online giant integrated Alexa “voice shopping” into this year’s Prime Day mix. To date, 70.6% of Alexa owners have an Amazon Prime account, according to data from LivePerson.



“Voice automation, and particularly ‘voice commerce’ [v-commerce] within the home has been growing quickly, following the sleeper success of Amazon Alexa, and copycat devices,” said Rurik Bradbury, global head of communications and research, LivePerson.



“We surveyed 500 Alexa users the week before Prime Day, and even before today’s big Amazon push to get consumers to order via voice, over 70% of users had placed an e-commerce order using Alexa,” Bradbury added. “That’s a very high number for consumer adoption of a technology that is still quite new, and bodes well for bots in e-commerce.



Nearly 70% of the Alexa-only Prime Day deals were for CPG products. These ranged from candy to home consumables, such as paper towels and toilet paper, according to Market Track.



This year, Amazon had its own air support for its biggest shopping day. The company noted that its Prime Air “cargo planes are [also] fueled and ready to support Prime Day in the U.S. for the first time.”



“By having their own distribution network they can avoid packages going into shipping hubs and ship directly to customers,” said Patrick Penfield, professor of practice, supply chain management at Syracuse University’s Whitman School of Management. “Prime Day is a great way to test and refine these new internal shipping and logistics processes.”


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