Why Amazon Prime Day Matters: By the Numbers


By Joe Skorupa

Heading into the second Amazon Prime Day many retailers are preparing strategies for piggybacking onto the massive promotional campaign. However, smart retailers will be preparing counter-offensive strategies that go far beyond July 12. According to a recently released study by the consumer research firm Carbonview Research, consumers have a love affair with Amazon that can’t easily be matched, but there are lessons to be learned that can help retailers survive.

Amazon has been making retail and financial experts scratch their heads for years. How does it get away with 20 years of disappointing Wall Street analysts, producing minimal (if any) profit for stakeholders, and re-investing revenue at what many experts consider a suicidal rate?

Amazon gets away with it because between 2005 and 2015 its revenue grew from $8.5 billion to $107 billion. This year Amazon overtook Walmart as the world’s largest retailer measured by market value. By the end of 2016 Amazon will be the world’s second largest retailer measured by revenue.

Part of Amazon’s explosive growth is due to the brilliance of its major marketing moves, such as the upcoming Prime Day on July 12, which promises discounts offered as often as every five minutes and 100,000 deals by the end of the day. Here is a glance at last year’s sales numbers:

  • 34.4 million items ordered on Prime Day
  • 398 items ordered per second
  • 81% more sales were rung up on Prime Day than the previous Black Friday
  • 20% more sales were recorded than on the previous Cyber Monday

Beyond Prime Day
But Prime Day is only part of Amazon’s booming success. The Amazon Prime membership program is a phenomenon worthy of a doctoral thesis on how to inspire consumers to love your brand.
Amazon does not report numbers on Prime membership, but an average of estimates by experts places it at more than 50 million, with 14 million joining in 2015 and 3 million joining in the third week of December alone, according to Consumer Intelligence Research Partners. These members spend an average of $1,100 per year, which is about double the amount for non-members.
Prime membership, which costs $99 a year, includes a host of benefits that far outweigh the annual fee. These include:

  • Free 2-day shipping on millions of items
  • Free same-day delivery in select areas
  • Free unlimited photo storage
  • Ability to listen to over a millions songs and advertising-free stations on Amazon Music
  • Ability to stream thousands of movies and TV shows free on Prime Video
  • Ability to share membership with another adult in the household for free
  • Access to thousands of kid-friendly books, shows and games on Amazon FreeTime

The list of Amazon Prime benefits goes on and on. The result of this amazing program is a level of consumer loyalty, impact and influence that is essentially a love affair with the brand. According to Carbonview, the effect of Amazon’s business model has produced the following impressive shopper behavior patterns:

  • 97% of primary grocery consumers shop at Amazon at least occasionally
  • 74% shop at Amazon multiple times per month
  • 35% shop several times per week
  • 97% are satisfied with their Prime membership
  • 55% of grocery shoppers are Amazon Prime members and 15% say they plan to join Prime within 12 months
  • 45% of boomers are Prime members and 11% will join within 12 months
  • 55% of Gen X are Prime members and 17% will join within 12 months
  • 63% of Millennials are Prime members and 15% will join within 12 months

For more information about the Carbonview report and its full set of consumer research about Amazon, please contact Laura Nicklin or go to the Carbonview website. Also note that a webinar is scheduled on the topic of Amazon's new entry into the private label grocery market, which will be presented by Rich Ratcliff, senior vice president of Carbonview, a division of Stagnito Business Information + Edgell Communications. The webinar is scheduled for July 14. Contact Laura Nicklin to get an invitation.

One lesson retailers should not take away from Amazon’s runaway success is to copy Prime membership or Prime Day or Amazon Music or any other signature Amazon business model. Instead, retailers should sharpen the focus on their customer’s unique demographics and psychographics, clearly identify what makes shoppers come into their stores, and offer a shopping experience that matches the passion shoppers feel when they spend their hard-earned money with you instead of others.
That said, perhaps there is one thing retailers should copy from Amazon – fearless innovation.
“We like to invent. We like to pioneer. We aren’t afraid to look down dark alleys seeking bright new opportunities even though some lead to dead ends.” – Jeff Bezos, Amazon CEO

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