Amazon Prime Day 2016 Expert Recap

Referred to as the “biggest day in the history of Amazon”, Amazon Prime Day 2016 on July 12th increased customer orders more than 60 percent worldwide compared to the event last year.

In the U.S. alone – Amazon saw a 50 percent increase in customer orders and was named “the biggest day ever” for Amazon devices sold globally.

According to additional reports, aside from Amazon products other top selling items included TVs (90,000+), toys (2 million), shoes (1 million), Lenovo laptops (14,000+), iRobot vacuums (23,000+ ), headphones (200,000+), and more.

amazon prime day 2016

“Prime Day 2016 was the biggest day ever for Amazon, as indicated by the company’s press release following the event. It served as an unparalleled opportunity for Sellers and Vendors to expose their products to Amazon shoppers, with a focus on those customers with Prime memberships,” Pat Petriello, Marketplace Channel Manager at CPC Strategy said.pat-petriello

In a recent article by CNBC, experts estimate the event added between “$500 million and $600 million in incremental sales to the retailer’s topline”.

“While a boon to retailers on the platform, it was also a reminder of the influence that Amazon has on the broader e-commerce ecosystem. The retail giant is unmatched in its ability to essentially create a new holiday with the intent of growing their Prime membership base ahead of Q4,” Petriello said.

“What this means for retailers going forward is that they must continue to get more sophisticated and optimize their approach to FBA inventory allocation to ensure their products are best positioned in front of an ever growing body of Prime members.”

Amazon Prime Day 2016 Strategy Feedback

As an agency, we prepared our advertising efforts with the idea that Amazon Prime Day would equate to a massive amount of traffic on Amazon.

We increased budgets for most our product catalogs to ensure that sellers didn’t run out of marketing funds during the day. We also took into account time zones – as that plays a huge factor, and bumped bids for keywords that drive sales.

From our perspective – sales lift seemed to be very hit-or-miss based on category.

For higher order value items, one-off purchases (gifts, games, etc.) we saw much more of a lift than routine purchases, such as supplements. Additionally, for the most part, heavily focused FBM (Fulfillment by Merchant) sellers saw very little lift.

“It’s hard to argue with the eye-opening figures Amazon released regarding Prime Day sales. It was their biggest sales day in company history, beating last year’s Prime Day and Black Friday. That’s an impressive accomplishment considering July is historically a slow retail month. So overall, I would say it was a large success for Amazon, and one that is likely to grow each year,” Ethan Pilkenton-Getty, Manager Marketplace Channel Operations at CPC Strategy said.ethan

“Last year Amazon received a lot of social media backlash regarding the quality and variety of their deals and I think this year’s stronger arrangement of deals at more attractive discounts was evidence that they took that feedback seriously.”

“By being more selective and calculated with their Lightning Deal and featured deal selections, Amazon was able to provide a better experience to its shoppers, which was a key driver in why this year’s Prime Day was so successful,” he said.

A major shift we saw in advertising efforts this year is that Amazon sellers did not have the ability to submit their own Lightning Deals / Deals of the Day. Instead, Amazon pre-selected which sellers and which products were eligible for deals on Amazon Prime Day.

Pro-Tip: An Amazon Lightning Deal is a promotion with a limited number of discount offers on an item for a short period of time. These premium deals can be found throughout Amazon.com, including the Gold Box page and are available one per customer, until either the promotional period (typically 4 hour blocks) for the deal expires or all the available promotional discounts are claimed.

Products that are featured in Amazon’s Lightning Deal spaces (especially on Amazon Prime Day) typically enjoy a bump in sales throughout the duration of the deal. This proved to be true on July 12th.

Below is an example of a outdoor game seller who saw an enormous spike in sales on Prime Day- largely thanks to their early Lightning Deal feature and 20% discount offer:

amazon prime day 2016

“Leveraging these Lightning Deals was where we saw our clients had the greatest amount of success. If you had a prominently placed Lightning Deal, or deal of the day, with an attractive discount and deep inventory allotment, you were in a prime position to see a huge sales day,” Pilkenton-Getty said.

Although there was an application process to be featured in an Amazon Lightning Deal, sellers who were initially selected by Amazon to apply were NOT guaranteed acceptance.

One unfortunate but unique discovery we made was that the Amazon Promotions Team overbooked their Vendor Lightning Deals. As a result, some sellers with previously approved Lightning Deal offers went through a “secondary revision” process and were later denied the Lightning Deal offer.

In one seller’s case, Amazon cancelled their Prime Day Deal (as seen below) without sending a notification by email. Unfortunately for this seller – they did know the Lightning Deal was cancelled until Prime Day.

Amazon Prime Day Recap

“On the flip side, sellers that were not featured in a Lighting Deal for the most part still did see a strong revenue day due to the rising tide of high purchase intent traffic, but these gains were very marginal when compared to the sellers that had Prime Day featured discounts,” Pilkenton-Getty said.

With two Prime Days now officially behind us, I think the biggest learning we can gather is that while Prime Day does deliver, it is not universal for all categories, product lines and sellers.”

“I think it is important to keep in mind that the majority of sales that Amazon reports from this record breaking day are sourced from Amazon retail and Amazon private label products.”

“Third party sellers only make up roughly 10% of Amazon’s market place revenue. So, if you are a third party seller, it is important to take Amazon’s aggregate Prime Day figures with a grain of salt and set expectations appropriately.”jeff-coleman

“As Amazon continues to train it’s customers to visit the site on Prime Day, shopping activity is going to continue to rise, but not all customers are going to find exactly what they want in Amazon’s curated list of deals,” Jeff Coleman, VP Marketplace Channels at CPC Strategy said.

“All retailers have an opportunity to capture that additional demand, and need to treat the day, and the week leading up to it, like a smaller version of the Black Friday – Cyber Monday weekend that kicks off the Holiday shopping season in Q4.”

Expert Takeaways for Sellers on Amazon Prime Day 2016

The Good:

  • Amazon Prime Day 2016 increased customer orders more than 60 percent worldwide.
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  • Amazon Prime Day was named “the biggest day ever” for Amazon devices globally.
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  • Top selling items included TVs, toys,  shoes, laptops, vacuums, & headphones.
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  • Amazon’s week of deals leading up to & on Prime Day saw the largest boost in sales.
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  • Some sellers saw significant increases in sales even without any additional deals (due to traffic increase).
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  • This year, Amazon introduced a stronger arrangement of deals at more attractive discounts.
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  • Amazon was much more selective and calculated with their Lightning Deal and featured deal selections.
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  • Sellers leveraging Lightning Deals saw the greatest amount of success.
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  • Strong sales for higher order value items & one-off purchases (such as gifts, games, etc.)
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The Bad:

  • Amazon sellers did not have the ability to submit their own Lightning Deals / Deals of the Day. (invitation only)
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  • The Amazon Promotions Team overbooked their “Vendor Lightning Deals.” This lead to a “second revision” process.
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  • The Lightning Deal overbooking lead to last minute cancellations for Sellers who were previous approved for Lightning Deal participation.
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  • Some Prime Day Deals were cancelled without sending the Seller a notification email.
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  • For the most part, heavily focused FBM (Fulfillment by Merchant) Sellers saw very little lift.
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For more on Amazon Prime Day 2016, email tara@cpcstrategy.com

Additional Resources:

What are Amazon Lightning Deals?

Amazon Prime Day Lightning Deals & Deals of the Day

The Amazon Prime Day Seller Plan of Action

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