The Implications of Amazon’s Prime Day for Your Ecommerce

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America’s largest digital retailer just threw itself a birthday party that will have a major impact on the rest of the ecommerce world.

To celebrate its 20th birthday, Amazon officially declared July 15 “Prime Day;” an event that offered “more deals than Black Friday.” And while it did indeed offer quite a selection of deals, ecommerce recruiters and experts understand it has goals beyond rewarding customers with discounts.

Blowing Out Candles with an Ecomm Giant

birthday ecommerce recruiter

When Amazon announced its birthday party back on July 6th, the company made it clear that Prime Day wouldn’t just rival Black Friday– it would surpass it.  The highly-touted sale offered deals to members of Prime, Amazon’s premium user service and ran all day on the 15th with new deals being released to shoppers every few minutes.

“Prime Day is a one-day only event filled with more deals than black Friday, exclusively for Prime members around the globe,”  said Greg Greeley, Vice President of Amazon Prime. “Members tell us every day how much they love Prime and we will keep making it better.”

That’s a pretty standard corporate announcement. But Greeley says something else that’s a little more interesting.

“If you’re not already a Prime member, you’ll want to join so you don’t miss out on one of the biggest deals extravaganza in the world.”

Here Greeley reveals the true motivation behind Prime Day: Aggressively grow the Amazon Prime program and surpass the competition. Not a grand revelation, perhaps, but a meaningful insight nonetheless.

Amazon’s MVP

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It doesn’t take much digging around or number crunching to understand why Amazon would want to grow Prime. Here’s some insight we can offer as an ecommerce recruiter:

According to data from Consumer Intelligence Research Partners, 45% of Amazon customers in the U.S. have Prime–that’s over 40 million accounts.

Amazon collects a cool $100 in annual subscriptions from all its Prime members, which is a nice start on its own. But more importantly, Amazon Prime customers spend $1,500 per year, compared to only $625 for non-members. The company has found it can more than double sales when it can convince people to sign up for its premium service–a very interesting lesson other ecommerce businesses should make note of.

In the past few months, Amazon has already put an emphasis on growing the service by releasing Prime Now, free same-day delivery options and Prime Music. Prime Day is just another savvy catalyst for growing membership numbers.

While the company may take modest margin hits by offering large discounts on certain inventory, the long-term ROI will ultimately be much greater. By allowing interested customers to start their free 30-day Prime trial membership on Prime Day, Amazon knew it could attract and keep a fair share of new members. Hundreds of thousands of new members signed up the day of the event, far more than any other day in the company’s history.

While customers may save $50, $100, or even substantially more during last week’s event, Amazon will come out the winner.

Cutting off Competitors (That’s You!)

While the lure of adding new Prime members may be the ultimate focus of Prime Day, it’s also clear that the ecomm giant is putting a major emphasis on overcoming competitive local and international threats– in both physical retail and online. The more people it can get committed to the Prime service, the more likely they’ll be to turn to Amazon than someone else to make their purchases.

Watch Amazon Prime VP Greg Greeley Talk Business, Logistics and Goals in an Interview on Prime Day

video from Fox Business

The official press release placed a big emphasis on Amazon’s intent to surpass Black Friday and Cyber Monday as the ultimate one-day shopping experience for customers around the world. While Amazon has famously good prices and does occasionally offer flash sales, business insiders have often wondered what Amazon would eventually do to combat the popularity of these traditional annual sales.

While it doesn’t come in the middle of the holiday shopping season (Amazon is already driving plenty of sales sales during the holiday shopping season), stating the site will have more deals than Black Friday shows the company’s clear and logical desire to show consumers that ecommerce can compete with physical retail sale prices.

But what about ecommerce competitors? Was Prime Day inspired by Amazon’s desire to further drive its stake into the ecommerce landscape? Writing for, Chris Neiger of The Motley Fool suggests just that.

“Aside from celebrating its birthday through its popular membership service, I think there’s something else going on with Prime Day, and it has to do with Amazon’s upcoming competitor,… Amazon is a fiercely competitive company and taking this step gives it the advantage of offering new value to its existing customers, while giving potential Prime customers access to great deals”.

If you’re unfamiliar with the reference, is a members-only deals site that’s currently in the beta stage and is expected to launch later this year. Their selling point is that items on the site are 5-6% less than they are on Amazon. And because Amazon is familiar with founder Marc Lore–who launched a company that rivaled Amazon’s diaper sales and was ultimately purchased by Amazon for $550 million–they’re taking the threat very seriously.

Whether you’re a quickly-growing upstart like Jet, a well-established ecommerce brand like GAP, or a small business that sells products online, Amazon’s Prime Day is an attempt to seal off current and future market share from your grasp. You’ll have to have excellent ecommerce leadership (perhaps through a new ecommerce executive search) and a well-equipped digital marketing team to combat it.

The Implications for Your Ecommerce Business

Ultimately, as a business owner, entrepreneur or online shopper, you’re probably wondering what Prime Day means for you. After all, Amazon is undeniably one of the biggest players in the space. Will Prime Day have a lasting impact on the ecommerce industry and how far will the reverberations extend?

One thing is for sure: Prime Day isn’t going anywhere:

“Going into this, we weren’t sure whether Prime Day would be a one-time thing or if it would become an annual event,” Greeley said in a statement following the event. “After yesterday’s results, we’ll definitely be doing this again.”

There are certainly some lessons to be learned from the inaugural event, both in terms of successes and failures. But Prime Day has even bigger-picture implications: what does one company’s ability to singlehandedly create its own midsummer holiday mean for everyone else?

This is only one big innovation in a still-young ecommerce discipline. More are certain to come; will your business be ready? The biggest takeaway marketing leaders should have from last week’s event is that it’s never been more important to have a flexible, innovative and experienced ecommerce team to be able to respond to disruptive events like this (and hopefully create some of their own).

Article Source: Entrepreneur

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