Amazon’s Prime Day Drives Online Performance, but Physical Retail Largely Unaffected

Karli Willenborg
Karli Willenborg
Program Manager, Advanced Analytics and Marketing

Amazon’s Prime Day 2018 once again set records and effectively turned mid-July into a mini holiday shopping season, and while other online retailers benefited from countermeasure promotions, it was much ado about nothing for most brick-and-mortar stores.

Summer is the season for filling up your calendars with pool parties, beach days and barbecues. But as a millennial, one of the biggest days I noticed most of my friends (and even my dad) blocking off and counting down towards was Amazon’s biggest shopping event of the year – Prime Day 2018.

While the event lasted a mere 36-hours, friends, family and co-workers were online shopping and putting items in their carts for weeks approaching July 16th and 17th. Once the big day arrived, the two-day event was considered Amazon’s biggest and most successful shopping events ever, with over 100 million products sold.

While Prime Day 2018 was a huge success for Amazon – industry analysts forecast at least $3.6 billion in sales – it had a rippling effect throughout the retail industry. Target reported its highest single day of site traffic and sales of 2018, and Adobe Analytics noted that retailers with more than $1 billion in revenue saw a 54 percent increase in sales on Prime Day as compared with an average Tuesday.

However, despite the boom in business for online e-commerce, brick-and-mortar retail in the United States was generally unaffected. Year-over-year traffic declined approximately four percent, on par with the typical traffic declines RetailNext has reported over the past year, reflecting a continued trend of shoppers visiting physical stores less often, but with more purposeful shopping journeys and a greater intent to buy. Sales declined too, roughly six percent year-over-year in stores – but, again, nothing unexpected.

Interestingly, in the days leading up to and including Prime Day, shoppers appeared to have put away their wallets and purses waiting for anticipated savings from Amazon and other brands. In just a couple of years, Prime Day has become deeply entrenched in the psyche of the American shopper.

Many retailers had counteractive strategies to compete with Amazon’s Prime Day, such as promotions for price-matching and price protection. Suitably armed, even retailers with physical locations – like Target, for example – benefited from the online shopping extravaganza generated by Prime Day. However, not all retailers rode Amazon’s coattails to high performance – Adobe also report that retailers with less than $5 million in revenue saw their online sales drop 18 percent on Prime Day.

Even with the hiccup of its website crashing as soon as Prime Day kicked off, Amazon has obviously created not only a loyal customer base and following, but also an experience that individuals are looking forward to months in advance. As the Back-To-School and holiday seasons quickly approach, Prime Day 2018 has reinforced the important call to action for all retailers: there is immense value in exceptional, digitally-driven personalized shopping experiences.

Annually, Prime Day, Singles’ Day and Cyber Monday serve as proof points that online shopping is deeply ingrained into today’s shopping journeys. As a result, retailers must equip themselves with all the tools, and channels necessary to make the full shopping experience seamless, creating connections and delivering value to customers across all branded touchpoints.  

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