Get Ready For The Biggest Prime Day Yet—And Not Just For Amazon
In just five short years, Amazon’s Prime Day has become a retail extravaganza.
“But what we are seeing is that Prime Day isn’t just an Amazon holiday anymore,” said Taylor Schreiner, principal analyst at Adobe Digital Insights (ADI). “Retailers have had a competitive response to the event over the past few years. In fact, research shows that more than 250 retailers are gearing up to convert Prime Day traffic this time around.”
What tactics and strategies can we expect? The ADI team, led by Schreiner, conducted an analysis of aggregate and anonymous data via Adobe Experience Cloud, Adobe Analytics Cloud, Adobe Commerce Cloud, and Adobe Advertising Cloud to better understand how retailers can compete for e-commerce sales during this two-day event.
Based on the data, here are five predictions about what we can expect.
1. Better At Conversion, Retailers Will See Their Best Prime Day Yet
Online retailers are seeing an increasingly strong “halo effect” on Prime Day. Revenue lift for the top retailers during Prime Day 2018 was close to 60%, and this year’s lift will be even higher, at 79%, ADI predicts. Additionally, ADI predicts, Prime Day will be the third time outside of the holiday season to surpass $2 billion in e-commerce spending, as it did on Labor Day 2018 and Memorial Day 2019.
“We attribute this growth in sales to the fact that the big e-commerce competitors have become better at reaping the benefits of this artificial holiday,” Schreiner said. “After all, they’ve now had almost five years of practice in converting Prime Day traffic.”
Indeed, last year retailers saw a 54% lift in conversion on Prime Day, according to ADI, and that number will likely increase for 2019. Seventy percent of the 54% lift last year was directly tied to conversion, 25% was due to an increase in visits, and the remaining 5% was due to an increase in basket size.
“All of this is from retailers that are already winning. We have found that successful retailers that are growing on par or faster than the industry showed a significant lift on Prime Day last year, while those that are growing below the industry benchmark saw almost no lift,” Schreiner told CMO by Adobe.
2. Physical Locations Will Give An Edge On Prime Day
Buy-online/pickup-in-store (BOPIS) has become a go-to option for consumers, especially during key holiday shopping periods. In fact, BOPIS saw a record 65% increase in usage during the 2018 holiday shopping season (Nov. 1 to Dec. 31).
According to Schreiner, consumers usually use BOPIS for less expensive items, which results in a smaller average order value. However, Prime Day brings BOPIS order values up closer to the online average of $146.
“Of course, there is a big opportunity for retailers to build loyalty,” Schreiner said. “It’s imperative to ensure a fast, seamless pickup with staff that is ready to help consumers find and even suggest anything else shoppers might need while they are in the store.”
3. Email And Video Will Be The Key To A Successful Prime Day
According to Schreiner, excellent email experiences give brands an edge on Prime Day. In fact, Prime Day lift in 2018 had a direct correlation to email campaign prowess among the top retailers.
“Retailers that were very successful at using email campaigns to drive revenue saw a significant lift in Prime Day sales last year,” he said. “On the other hand, retailers with a poorly developed or completely undeveloped email channel saw zero lift on Prime Day.” Overall, Schreiner added, email campaigns were responsible for an 8.8% increase in order share on Prime Day 2018.
Also worth mentioning is how video advertising engagement heightens on Prime Day, with click-through rates up 55% and viewable completion rates up 20% in 2018. Interestingly, this engagement lift is primarily driven through desktop, indicating advertisers would be well-advised to focus their energy here rather than mobile.
4. The Best Prime Day Discounts
The best deals on Prime Day can be found on electronics, apparel, and home goods, according to the ADI team. Discounts on home goods and electronics are on par with discounts found on Cyber Monday, while apparel and linen discounts outpace holiday discounts.
“Consumers, look for the steepest electronic discounts on smart items, specifically watches, TVs, and home accessories,” Schreiner advised. “And retailers, remember: While everyone loves a deal, deeper discounts don’t always translate to more sales.”
According to the analysis, consumers are most discount-sensitive toward toys and home/garden goods, and steeper discounts on appliances, personal care products, and groceries don’t necessarily indicate more purchases. Items in the $50 to $100 bucket see the strongest relationship between discount and units purchased.
5. Return Rates Increase For Purchases Made On Prime Day
Last year saw a 30% increase in returns for items purchased on Prime Day, indicating that consumers are quick to buy items they don’t ultimately want or need.
“Experiences that use emerging technology, such as augmented reality, and others that aid consumers in choosing the right products could help retailers this year in decreasing returns,” Schreiner said. “Think of what Ikea is doing with its Place app, which allows users to visualize a piece of furniture in their space. These types of innovations certainly help consumer make better purchase decisions.”