Is Prime Day part of the ‘new normal’?
Nobody questions the success of Amazon Prime Day, but has retail simply adjusted to it?
By all accounts, Prime Day 2020 should be the most lucrative edition yet of the annual omnichannel sales extravaganza. Some estimates of the event’s revenue this year exceed $10 billion, compared to a generally accepted figure of $6 billion-$7 billion in 2019. Amazon itself reported third-party sellers surpassed $3.5 billion in total global sales during the Oct. 13-14 event.
However, as a retail technology reporter, I can anecdotally report that there was far less of a media blitz surrounding this year’s Prime Day event than in previous years. Some of this may be due to the shift of Prime Day from July to October, as well as news around broader topics such as COVID-19 and the upcoming election dominating public attention.
I also believe that to some extent, Prime Day is maturing into an accepted part of the retail landscape, rather than a standout event. Here are three potential reasons Prime Day may be evolving into a feature of retail’s “new normal.”
Imitation breeds familiarity
When Amazon launched Prime Day in 2015, the idea of holding a digital shopping bonanza not tied to any existing holiday was novel. Now it is routine, with more than 250 retailers offering competing events in 2019, according to RetailMeNot.
This year, RetailMeNot reports over 350 retailers ran some type of promotion alongside Prime Day, 17% more than Prime Day 2019, including big names such as Walmart, Target, and Best Buy. Just as the Festivus holiday has emerged from the classic sitcom Seinfeld to become “real” enough to have books and ice cream flavors dedicated to it, Prime Day is now an established (if moveable) date on the retail calendar.
Everyone is online anyway
Prime Day used to be notable for driving large spikes in online traffic and purchase volume. During 2020, the unexpected (and unwelcome) arrival of the longterm COVID-19 pandemic has created a continuing e-commerce surge that may turn out to be permanent.
According to a new forecast from FTI Consulting Inc., U.S. online retail sales will experience a $71 billion windfall in 2020 and reach $1 trillion by 2023. Add in Coresight Research’s prediction that as many as 25,000 stores will close in the U.S. by the end of this year and the growing number of retailers offering BOPIS and curbside pickup, and you have a recipe for online retail growing sharply, with or without Prime Day.
Amazon is king (unless you’re Walmart)
Walmart can credibly claim to pose a challenge to Amazon’s status as the number one U.S. retailer. Any other retailer is, at best, competing for the number three spot after these two omnichannel titans.
Amazon doubled its profits year-over-year to $5.2 billion in Q2 2020, with net sales growing 40% to $88.9 billion. This occurred in a quarter that did not feature a 48-hour sales extravaganza. When a retailer is as dominatingly successful as Amazon has become, even the most impressive two-day event loses a little of its luster.