We all know that sequels don’t come with half measures: due to comparison with the previous event, they either result in a success or a complete flop.
Amazon did it again, literally. Prime Day 2 – called Prime Early Access Sale – has just taken place. The 11th and 12th of October have been the two days dedicated to this new online shopping from the multinational company. Just like for the previous edition, the promise is for Prime Members to find incredible discounts and this time maybe start with some holiday shopping.
Did the giant tech win the bet? Little spoiler: not really.
A generic press release from Amazon
Amazon’s latest press release radiates forced-smile vibes, with the company painting the event as a success under some aspects and omitting others. The company cleverly never shares the exact data of its sales appointments. They rather throw in their communications a couple numbers that can give a rough idea for some areas. This time they were even more generic citing “tens of millions” purchasers that found something to buy on Amazon.
Whether it was a postponed purchase in order to find a better deal or the beginning of holiday shopping, we need to ask external analysts. However, the press release definitely sounds less happy than the one about last summer’s Prime Day. It shares some information on the most searched niches, some inspiring success stories and some general information about the company (like its values), but nothing that suggest that these two days were an indisputable success.
A new Prime Day to recover bad quarterly results
This is not incredible news, it is known that eCommerce sales volumes declined in the first half of 2022. It was a predictable epilogue after the pandemic peeks. In order to mitigate the declining numbers, the second prime day was announced right after the first one.
However, revenue expectations during a recession should be calibrated accordingly, after all you can only milk the “cow” that much .
Very slow start off
We can overall say that sales started off with less enthusiasm: after eight hours into the event, numbers weren’t different compared to a regular day. Also, according to Numerator, 58% of the purchased items were under $20. This suggests a superficial approach by the consumer who wasn’t digging very deep for good deals OR the awareness of a reduced spending power due to inflation that has brought consumers to pay less attention to high ticket items.
When compared with July’s Prime Day, results are very different.
Analysts aren’t shy in defining the event a “flop”. According to Klover, which has analyzed data from 4 million customers, households spent 40% less on this event compared to July’s prime event. Numerator published the complete results of the two days shopping event and has observed a decrease in the Average Order Value (AOV) from $60.29 to $46.68. Also social media has turned out to be pretty quiet about the event with 70% tweets less about the it when compared to July’s prime day. Some sources push this percentage up to 90%. A total disappointment in terms of revenue and social buzz.
What did consumers buy?
The undisputed winning product niches are toys and video games. This is strongly connected to the holiday shopping intentions for many Prime Members that took advantage of the discounts.
The Causes aka “what can we learn from Amazon’s failure?”
Can we define these results as actually disappointing? If Amazon was actually relying on a single sales event to fix its yearly results, then it is, but let’s be real. Here are the causes of this downhearted Prime Early Access sales many of which simply belong to a Q4 context that cannot be changed.
- Adding another sales event to a quarter crowded with sales campaigns
We are in Q4, tons of events will take place during the next 80 days, there is only a certain amount of attention and memory that a consumer can dedicate to a mental calendar of all events. Not differentiating makes you invisible and this results in less awareness from the target audience.
- If YOU had two Christmases in one year, would you be as enthusiast?
The answer is NO. And this is crucial when it comes to sales. All the FOMO (fear of missing out) will come less knowing that there will be some redemption time in the future. All the story telling loses strength because there will be another occasion.
- Inevitable procrastination because the train will pass again… and again
Kicking off the sales season may bring the advantage of being the first, but it doesn’t assure having all the attention. Many consumers aren’t ready to shop for presents in early October. Halloween is still to come and we have to already think about Christmas? Plus, Amazon somehow emptied the bag, but what about all the other brands? There are too many deals to be disclosed and people with a limited budget want to know more about what’s on the table.
Spending power is at the lowest. The energetic crisis and inflation had an impact on the amount of non essential goods a family will be purchasing during Q4 2022. 80% of early Prime day shoppers admitted that inflation played a role in their shopping behaviour.
- Value perception of the deals and discounts
Are the deals really deals? Price policies and tactics meet a more aware consumer that is also on a smaller budget. If it’s true that the deal wins over the need during Q4, it’s also true that the deal must be really good. Pricing strategies on Amazon might make consumers suspicious and less impulsive, the findings of this recently published study suggest that there is a lot of price manipulation on the marketplace and actual discounts are less deep than what stated in many cases.
Now is the time for eCommerce stores and DTC Brands to shine!
Have we gotten to a point in which a consumer bombarded by Q4 offers becomes numb or insensitive to the announcement of the next great deal? Is a failed shopping event a harbinger of an unprofitable Q4 2022 for other brands?
We don’t believe so. Amazon requires consumers to be in a very specific kind of shopping mood and despite the fact that it is possible to find a very wide range of articles on its virtual shelves, we are still talking about a marketplace.
On the other side, the DTC Brands side, the game is completely different because the experience and the offer that an eCommerce store or DTC Brand is able to provide is very different.
The initiatives with major engaging power, the creativity and the messages of the brand are perceived as more valuable. This is showtime for eCommerce stores, which should’t be influenced by Amazon results in believing that a difficult holidays shopping period awaits them. This is the moment for DTC Brands to work it on the holiday shopping floor.
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