Early Reports Show That Amazon’s Prime Day Performs Strongly For Retail Brands

This week was the annual festival of nail-biting for Marketing directors and advertising practitioners known as Amazon
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Prime Day. Now in its 6th year, there were even more unknowns than usual with the backdrop of a global pandemic and major supply chain issues. 

Here’s an early look at how the event performed in terms of sales for retail brands, and what we can expect for the remainder of the 2020 holiday shopping period.

Many brands more than tripled their sales

Across a sample of clients at my agency Bobsled Marketing, we found an increase of 3.42X versus a brand’s average 30-day sales. In other words, sales during the two event days were on average 340% higher than in the previous 30 days.  

Most of our clients had invested in some combination of running deals (either Prime Exclusive Deals or coupons), off-Amazon promotion of their deals (email blasts, previewing deals on social media), and Amazon paid search advertising. Many brands considered the and potential changes to shopper behavior during Q4 as consumers consider earlier gift buying and potentially buying less gifts overall. While discounting extensively needs to be measured against other business objectives, many chose to take the blue pill and actively drive sales volume over Prime Day.  For clients who invested in these promotional activities, their results were higher than average. 

Clients who ran no deals at all saw on average a 110% increase in sales during the event. The worst performers were brands who had insufficient inventory on hand. 

Advertising spend nearly tripled during the event

Amazon ad-tech provider Pacvue pulled some early data into advertising spend among its cohort of hundreds of advertisers. Average spend on Sponsored Products was up 311% week-over-week on the first day of Prime Day, and up 263% on the second day. 

“This corresponds with the trend last year, where spend was higher on the first day as brands lean in to capture customers early and make sure their deals get the most visibility,” says Melissa Burdick, Co-Founder and President of Pacvue.

Brands also spent more on the Sponsored Brands advertising type. This is a trend that Pacvue has seen all year as more brands increase invest into this ad type – one which allows advertisers to exert more creative control over messaging, creative, and the action they want shoppers to take. 

But advertising was more expensive during the event. Pacvue’s early data show that the average CPC for Sponsored Brand ads was up 23% on Prime Day year-over-year. 

But shoppers may have spent less this year versus prior years

Market intelligence company Numerator published an Amazon Prime Tracker which included 43,000 observed Amazon orders and a survey of 5,000 shoppers following their observed purchases. 

Numerator found that compared with 2019, most metrics indicate that shoppers spent less this year. 

• Spend per Household: $110.02 versus $154.59 in 2019*
• Orders per Household: 2.5 versus 2.6 in 2019*
• Units per order: 1.6 versus 1.7 in 2019
• Spend per order: $44.21 versus $59.02 in 2019
• Average price per unit: $32.83 versus $34.01 in 2019

*These figures are expected to increase as orders finalize.  

Amazon’s own products were the winners

Similar to prior years, the top 6 items sold this year were all Amazon brands.

Ecommerce Analytics provider Profitero also noticed that on day one of the Prime Day event, Amazon products were offered at the steepest discounts. When sorting by “Highest Discount to Lowest Discount”, the only products with more than 50% off were Amazon Echo
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devices, which made up the first 15 placements in search results. 

The high performance of gift cards is unusual compared with prior years (new gift cards were not in the top 6 products last year) – but this seems to be intentional on Amazon’s part. Numerator found that Amazon dedicated 28% of their ad budget to gift cards, compared to only 1% last year. 

Prime Day’s Impact on Future Holiday Shopping

Numerator’s consumer surveys suggest that the holiday shopping period is far from over. While nearly one-third (29%) of Prime Day buyers purchased holiday gifts on Prime Day, only 25% of those buyers completed at least half of their holiday gift shopping with their Prime Day purchases. 

The high level purchases of Amazon gift cards is also promising. Recipients are going to be coming back to redeem those in the coming months. 

This means that brands can expect a lot more order volume to come over the Black Friday/ Cyber Monday shopping weekend as well as further into December – for those shoppers who like to live on the edge. 80% of Prime Day shoppers  anticipate shopping on Black Friday, and 88% of Prime Day shoppers anticipate shopping on Cyber Monday; while 90% say they will shop on Amazon again before the holidays.