Little buzz but also little drama for Prime Day
SAN FRANCISCO — Amazon’s second annual Prime Day started with a checkout glitch but then turned into a more typical retail sales blitz, teasing online shoppers with a diet of discounted items — from the wacky to the basic.
The end result was little drama and also little buzz, but estimates of brisk sales for the Seattle online retail giant.
"I haven’t heard much reaction from people this year and I think that in itself is telling. Going through Facebook, nobody’s bragging about the deals they’ve gotten," said Marlene Morris Towns, a professor of marketing at Georgetown’s McDonough School of Business.
Still, the end result was likely a just what Amazon hoped for — a marketing splash that encouraged more people to try its Prime membership.
Pressure cookers and TVs
Amazon revealed the quantities of sales sold, but no overall sales figures.
For instance: more than 22,000 TVs were ordered in the United States within the first eight hours of the sale, according to Amazon.
By noon Seattle time, Prime members in the United States had purchased over 91,000 Instant Pots pressure cookers and all 23,000 iRobot Roombas the site had for sale. In the first ten hours, members ordered more than 11,000 copies of the game Exploding Kittens.
There didn't seem to be a huge jump in sales compared with last year, however.
U.S. Prime Day sales were in line with Prime Day in 2015 as of 5:00 PM ET, according to ChannelAdvisor, an e-commerce software company that works with approximately 3,000 online retailers including marketplaces like Amazon.
"It looks like Amazon has spread out the deals more,” said ChannelAdvisor executive chairman Scot Wingo.
About the membership
Whether or not Prime Day makes a profit is beside the point, said Charlie O’Shea, lead retail analyst with Moody’s.
"You’re going to get sales today but you’re hoping to get loyalty later. And when (customers) come back, that’s when you’ll make your money.”
By offering a slew of deals and a free, 30-day Prime trial membership, Amazon hopes to convert the uninitiated into members.
Prime customers are vital to Amazon’s bottom line because they are lucrative, spending on average about $1,200 per year, compared to about $500 per year for non-members, according to Consumer Intelligence Research Partners in Chicago.
The strategy seems to work well. According to CIRP, 73% of 30-day trial subscribers go on to pay for a full year of Amazon Prime membership and 91% of first-year paid subscribers renew for a second.
Amazon also benefits in less obvious ways from the day of deals.
Aside from the sales lift, Prime Day acts as a Black Friday test run, when Amazon can put its hiring strategy, network capability and fulfillment centers up against similar peak volumes to the holiday season, said Steve Osburn, chief supply chain strategist for consulting firm Kurt Salmon.
“Black Friday is every supply chain executive’s worst nightmare,” he said, adding that problems like customers having difficulty adding items to their cart are “much better to experience…now than during Black Friday.”
Amazon (AMZN) stock closed down 0.74% at $748.21.
Social media
When it came to Twitter, this year’s Prime Day fared significantly better than last year.
Social media reaction hasn’t been as outraged. Adobe Digital Insights, which tracks social media sentiment, found that feelings of sadness related to Prime Day are down 26% from last year’s Prime Day as of Tuesday afternoon, while feelings of joy are up 43%. Last year, sadness was primarily related to customers being disappointed by Prime Day deals.
Many took to Twitter to share the deals they’ve taken advantage of, such as an Xbox One bundle, an Amazon Echo smart speaker and even an engagement ring.
But it wasn’t all smooth sailing for Amazon. While the #PrimeDayFail hashtag never became the trending topic it was last year, it still made an appearance, in large part due to shopping cart and checkout issues early in the day that were quickly fixed but still left some users frustrated.
Although the overall sentiment was more positive, plenty on the site griped about Prime Day “deals” that were discounts only in the most basic sense of the word.
One user posted a screenshot of the Call of Duty Black Ops 3 PlayStation 4 game listed as a Prime Deal for $59.96, a 3-cent difference from its normal price of $59.99. Another saw a pair of $144.99 Sennheiser headphones for $144.98.
No dramatic deals
This year's discounts are not dramatically different than those on a regular day but there were more of them, said Supriya Chaudhury, chief marketing officer with Clavis Insight, an e-commerce analysis firm in Boston.
The firm found the average discount to be 42%, in line with typical discounts on Amazon.
Market research firm Market Track compared prices for 1,950 product listings on Monday and Tuesday and found that just over 5% of listings saw a price decrease for Prime Day.
However when they looked at just the products Amazon featured as “Prime Day Deals,” the discounts were attractive.
Amazon did appear to be offering far more Deals of the Day and Lightning Deals on Prime Day than on a typical day, even if the depth of discount wasn't that different, said Chaudhury.
Amazon launched Prime Day last year as a "shopping holiday" similar to Black Friday, Cyber Monday, or Singles Day, which generates massive revenue for Chinese retailing giant Alibaba.
Last year, Amazon received orders for 34.4 million items worldwide despite complaints on social media questioning the value of the offered deals.
Contributing: Hadley Malcolm
Follow Elizabeth Weise on Twitter: @eweise