4 Big Takeaways From Prime Day 2020
Amazon's mega-sales days tells us a lot about 2020 and what the future may look like.
Prime Day 2020 was always going to be a major event. Time, momentum, and online shopping trends were already on its side. However, as soon as the pandemic arrived and then forced Amazon to push back its Prime Day mega-event from mid-July, it seemed destined that Prime Day would become about more than just eCommerce.
And it did. Fueled by social-distancing mandates and fractured holiday sales season, this year’s Prime Day is no longer just a mid-summer one-off, but rather, a way to understand what 2020 has done to the entire retail landscape and economy. That estimated forecasts for Prime Day sales ranged from $7.5 billion (JPMorgan) to $10 billion (eMarketer) is almost beside the point.
Here are 4 big takeaways from this week's Prime Day experiment.
Prime Day Is a Monocultural Event
It's a reflection of both consumer interest and a journalism industry that's not at its strongest form that any casual browser of the internet this week saw a cascade of news stories, lists, standalone landing pages, guides, newsletters, and reviews featuring information about Prime Day offerings, almost all with affiliate links. At this point, it would be easier to list the media outlets that didn't feature exhaustive Prime Day coverage than it would to list the ones that did.
Some were straight forward, others were more creative. Gizmodo, for example, seeking it to set itself apart in the expertise category offered a running list of the worst Prime Day deals. In fact, one of the only major general-interest publications that seemed to keep its Prime Day powder was The Washington Post, which is owned by Jeff Bezos. Not only did it not include exhaustive Prime Day coverage, it actually published a story talking about how the savings were actually less than great.
But what's important about this flurry of attention is that it signifies, now more than ever, that Prime Day has become a monocultural retail event. Super Bowl viewership has been steadily declining. Nobody bothers with the Oscars anymore. Regardless, with a majority of Americans now having access to an Amazon Prime membership, Prime Day, in just five years, has gone from a niche event to an agenda-making holiday. That's important.
The Retail Majority
As we noted, the audience for Amazon Prime is an upshot of Amazon's successful infiltration of American households. But let's take a step back and just admire how huge and far-reaching Amazon's influence has become. "There are approximately 127.59 million households in the U.S.," noted DigitalCommerce360 last year, citing census data. "As many Prime customers share their memberships with their households, Amazon’s foothold on U.S. shopping may be much stronger than just its membership number. Factoring in the households number and the 105 million members suggests that 82% of households have a Prime account."
While this figure is not adjusted for households that may have more than one Prime account, it is mind-boggling to consider, even with a caveat. What this means is that Prime Day isn't just the manifestation of a monoculture, it's also an economic force of national proportions.
And though, Amazon never reveals its total earnings data for Prime Day, the behemoth said its Prime members saved more than $1.4 billion on Prime Day 2020. That is an unfathomable amount of business to do over the course of 48 hours.
In addition to the endless coverage of Prime Day, there were countless rival sales happening across the retail landscape from Walmart, Best Buy, and Target to Kohl's, Home Depot, and Bed, Bath & Beyond. Almost by default, that made Prime Day 2020, one of the largest retail holidays of the year, both in terms of scope, sales, and discounting.
Companies both inside or outside of the Amazon orbit were wise to have meetings about whether to create sales or promotions to capitalize on a time when consumers across 20 countries would be thinking about making holiday purchases. Take SimpliSafe, the DTC home security maker, for example. Its strategy was two-fold: Make itself available, not only part of a featured Prime Day deal on Amazon, but also run an even sweeter deal on its website to try and generate sales without Amazon taking a bite out of its revenue.
A Party for Third-Party Sellers
SimpliSafe is just one example of a third-party seller that reaped the benefits of Prime Day. While many contend that aligning with Amazon can be bad for business what Prime Day data revealed is that third-party sellers did strong business at a time when more consumers are wary of spending.
Though generally tight-lipped about its own figures, Amazon itself said third-party sellers on its marketplace earned more than $3.5 billion during this year’s Prime Day shopping event, an increase of nearly 60% compared with last year and a record for the small and midsize businesses that make up the marketplace.
That Amazon released data about its third-party partners is telling and clearly meant as bait for more businesses to consider the platform. As CNBC reported, partnering sellers usually account "for about 58% of the company’s total merchandise sold. At that percentage, Amazon stands to have generated at least $7 billion in sales during this year’s Prime Day."