Amazon Prime Day: Statistical Wonder or Retailer Blunder?

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Amazon Prime Day: Statistical Wonder or Retailer Blunder?

By Tim Denman - 07/20/2015
From a sheer volume perspective the success of Amazon's first every Prime Day is undisputable. The July 15th flash sale set numerous volume records and helped the online retailer turn a mundane summer sales day into one of its most successful promotions to date. Despite the numerous statistical "wows" the day produced, many critics and Amazon shoppers alike have voiced their discontent over the positioning of the event.

A quick glance at social media or an online search will reveal countless reports of disappointed and unhappy Amazon shoppers. Many of the disgruntled customers are citing a lack of transparency into the flash sale pre-event, and the feeling that most of the merchandise offered on deep discount was old and tired products Amazon was looking to unload. The naysayers are reporting the event teetered more toward liquidation than worthwhile discount event and that those high-in-demand-items that were offered on discount were done so in very low quantities.

"Looking at Prime Day from the shopper’s perspective, it seems Amazon is basically selling a bunch of old inventory stock that's been piling up in their warehouse," Reflektion CMO Kurt Heinemann says. "You don’t see some of the trademark Amazon personalization elements, which is unfortunate because shoppers are stuck looking at irrelevant and even sold out inventory. This day is a lost sales opportunity for Amazon to capitalize on the extra traffic by cross-selling and intelligently promoting products that are not on sale."

The backlash notwithstanding, the one-day event was certainly a promotional and statistical home run for the e-commerce giant. Amazon reported some eye-opening statistics following the close of Prime Day at the stroke of midnight last Wednesday including:
  • The sale of more units on Prime Day than Black Friday 2014, the biggest Black Friday ever
  • Worldwide order growth increased 266% over the same day last year and 18% more than Black Friday 2014
  • More new members tried Prime worldwide than any single day in Amazon history
  • Sellers on Amazon that use the Fulfillment by Amazon service enjoyed record-breaking unit sales — growing nearly 300%
  • Customers ordered hundreds of thousands of Amazon devices — making it the largest device sales day ever

And for those not overly concerned with the age of the inventory on offer, but rather simply getting a good bang for their buck Prime Day was a price-conscious shopper's gold mine. The omnichannel price tracking and price management firm Boomerang Commerce reports that Amazon had 3,254 unique SKUs on deep discount during the 24-hour event with an average price reduction of 34%. The 10 product categories with the highest average price reduction were:

  • Clothing, Shoes and Jewelry: -42%
  • Electronics: -35%
  • Baby: -30%
  • Sports and Outdoors: -36%
  • Toys and Games: -33%
  • Home and Kitchen: -37%
  • Pet Supplies: -24%
  • Health and Personal Care: -30%
  • Beauty: -31%
  • Musical Instruments: -25%
While it is not unusual for a retailer to leverage underperforming and/or dated inventory for deep promotions, many shoppers were swept up in the pre-event hype surrounding Prime Day and were mistakenly expecting Amazon's top sellers to be the focus of the price slashing festivities.

"There were items that were in their top 100 selling items and there were items that were not in their top 100," CMO of OrderDynamics and former Gartner analyst Kevin Sterneckert says about the available SKUs on discount during Prime Day. "Certainly the most attractive and interesting items at the lowest prices went very fast because of the hype. I think people were expecting huge amounts of inventory for the top items and that was all that would be promoted. While Amazon never said that I think that is what the hype drew people to believe.  

"The event certainly caught competitors off guard and left many competitors wondering how to respond. It opened up a new promotion opportunity for Amazon that no one had ever really considered before. Sales were up by 80%, which by all measures is a huge success. Because items were sold out represents there was high demand."