Amazon Prime Day Is The New Black Friday
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Amazon Prime Day officially overtook Black Friday this week with Amazon sales during the two-day shopping event surpassing the online retailer's previous Black Friday and Cyber Monday sales. Scads of retailers rode Amazon's coattails, launching their own sales.
Amazon sold more than $2B of products from independent and small/midsized businesses alone during this week's Amazon Prime Day event July 15 and 16, Amazon said in a press release. It hasn't released an overall sales number, but called Prime Day 2019 "the largest shopping event in Amazon history." Amazon members acquired more than 175,000 items, with many stocking up on Echo Dots, Fire TV Sticks and Alexa Voice Remote devices, Amazon said in a statement. Last year's 36-hour Prime Day event sold 100,000 items.
With the two-day event's consistent success, whispers of Amazon Prime Day taking over Black Friday or becoming a type of summertime Black Friday appear to be more than conjecture.
"I think it’s too early [to tell]," said Whitebox Real Estate co-founder and President Grant Pruitt, who follows retail trends, particularly those related to e-commerce. "My gut would say yes [this is a new Black Friday] if it continues for long periods of time, because we are going to get used to having this period in the summer where we have these types of sales."
Pruitt sees Amazon as unique because the company possesses technical abilities and data strategies that allow it to study the retail sphere and execute sales with a great deal of precision and market control.
"What's incredible about Amazon is how big they really are and how well they are able to use and analyze data," Pruitt said. "Quite frankly, they are safekeepers of the majority of the data. They are able to plan and predict the market."
Amazon also has a way of driving the rest of the retail market to follow along. In this year's Prime Day, every type of retail concept was forced to compete online and in the store.
Large retailers (over $1B in revenue) saw a 65% sales jump July 15, the first day of Prime Day, compared to average Monday sales, a Seeking Alpha report citing Adobe Analytics said. That is up from Amazon Prime Day last year, when sales were 54% above average. Across both days, online sales for large retailers rose 68%, and sales for small businesses (below $5M in revenue) rose 28%, according to Adobe Analytics. Last year, niche retailers saw their online sales decline during Prime Day, CNBC reports.
Retailers from Target to Walmart to Best Buy threw out deals on Amazon Prime Days, with Target offering as much as 30% to 40% off on certain products during Prime Day.
“Amazon Prime is forcing all businesses to be hyper-responsive in having product available as well as delivering in real time,” Luxury Institute CEO Milton Pedraza said.
Even luxury brands that build concepts on the idea of exclusivity and unattainability are unable to run away from the Amazon train.
Amazon Prime Day in 2019 showed signs of Amazon pushing its way into fashion and luxury retail — a part of the market that has remained largely independent and aloof, as CNBC noted.
While luxury retailers are having to pay attention to Amazon and Amazon Prime Day now, it is less likely upscale market retailers will be completely usurped by the commerce giant.
“Amazon can be a partner for some luxury brands as long as it can guarantee that counterfeit and fake merchandise cannot be sold through its network and isn’t sold at discounts for brands that do not ever discount,” Pedraza said. “That is unlikely. Many luxury brands will prefer to sell directly or through trusted wholesale online partners that have integrity.”
It isn't just Prime Day that is changing retail worldwide.
The acceleration of “newCommerce,” or e-commerce/technical-related retail, is one of the top five factors reshaping brick-and-mortar retail, according to a new Cushman & Wakefield report.
The report concludes that while there is some negative impact from Amazon and e-commerce — including a rise in bankruptcies, such as Charming Charlie filing Chapter 11 this month — other stores are thriving in this new world.
"Not all retailers are facing the challenges laid out in this report," the Cushman & Wakefield study said.
What makes those that survive steadfast is their adherence to a tried-and-true formula: great value, a prized experience and convenient store locations.
"Convenience as a real estate model still is critical and, depending upon the retail category and its level of eCommerce-driven disruption, the challenges can be quite different. But ultimately, there are only three reasons why a consumer visits a store or a shopping center to purchase goods or services: convenience (location), value or experience," the Cushman report said.
And, perhaps, what makes Amazon Prime Day so successful is the convenience consumers experience when finding good deals online in the usually dead summer months.
"What Amazon can do through the internet is reach people even when they are not in their homes," Pruitt said. "That is something other businesses would love to figure out."