Retailers need a Prime Day strategy
Amazon’s fourth annual “Prime Day” will run for 36 hours — a window that could benefit retailers willing to take the right actions.
That’s according to the “The AlixPartners 2018 Amazon Prime Day Consumer Survey and Outlook,” which also revealed that of the 63% of Prime and non-Prime members alike plan to shop on Amazon on Prime Day this year, 39% are allocating their dollars to shop for bargains at retailers other than Amazon on Prime Day. This is up eight percentage points from the 31% who said they made a purchase at a different retailer last year.
Prime Day sales globally were estimated to be more than $2.4 billion in 2017, making the event almost as ubiquitous to consumers as “Black Friday” or “Cyber Monday.” In fact, 60% of respondents said they are aware of Prime Day vs. 88% who said they’re aware of Black Friday (the big shopping day in the U.S. that follows Thanksgiving each year) and Cyber Monday, the Monday after the Thanksgiving holiday (81%).
Prime Day is so popular among Amazon Prime members that more than three-quarters (77%) plan to shop on Amazon itself during that time. Moreover, 43% of consumers in general said they also anticipate deals from Amazon-owned companies on Prime Day.
“While other retailers try to get in on the action by offering competitive promotional pricing, Amazon itself will likely use Prime Day not only to sell products but to deepen its relationship with current Prime members,” said Roshan Varma, director in the retail practice at AlixPartners. “Look for them to upsell their membership base to additional revenue streams, be it fulfilling the need for instant gratification with Prime Now or even expanding into the weekly grocery trip via Whole Foods.”
To grab some of the wallet share from Prime Day shoppers, retailers should create a “Prime Day Competitive Strategy,” one that goes beyond deals. This should include aggressive marketing (both leading up to and during Prime Day), targeted promotions (including “flash sales” and other excitement-generating offers), and fast and free shipping, according to the study.
“In our survey, 95% who plan on shopping on Prime Day say they plan on doing online research — which presents a tremendous opportunity for other retailers if they know how to take advantage of it,” said David Bassuk, global co-head of the retail practice and managing director at AlixPartners.
“For instance, last year 47 of the 100 largest non-Amazon retailers offered limited-time sales or messaging that included the word ‘Prime.’ Even simple marketing steps such as that can make a big difference,” he added. “But the Holy Grail is offering consumers a frictionless shopping experience that, while not attempting to compete with Amazon head-on, nonetheless offers the consumer an ‘Amazon-like’ experience but one that’s true to your own unique brand.”
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