Prime Day’s Ripple Effect: Preparing Retailers for a Flourishing Holiday Season
The frenzy of Amazon Prime Day has come and gone, leaving retailers and consumers alike buzzing with excitement. This year’s Prime Day broke records, with online spending reaching an astounding $12.7 billion, making it Amazon’s biggest-ever sales day. While the event primarily saw shoppers stocking up on household essentials and back-to-school items, the impact of Prime Day motivated many to shop beyond Amazon’s virtual aisles. Other major retailers, like Walmart and Target, seized the opportunity to hold their own sales events, creating an e-commerce shopping extravaganza.
As we delve into the impact of this year’s Prime Day, one question arises: What does Prime Day mean for your holiday performance? Let’s explore the industry-wide metrics and insights to uncover how this retail Super Bowl sets the tone for the upcoming holiday season.
INDUSTRY-WIDE PRIME DAY METRICS
For the first time since 2021, this year’s Amazon Prime Day was mostly untouched by pandemic-related logistics issues like supply chain shortages. Online spending in the U.S. climbed 6.1% during Amazon’s Prime Day promotion, according to Adobe Analytics.
The average order size ticked up to $54.05, compared with last year’s $52.26, per Numerator. Most households—65%—placed at least two orders; average household spend reached $155.67.
Amazon was the big ecommerce winner, but Prime Day isn’t just about Amazon anymore. Retailers, like Walmart and Target, also benefited by holding sales events before and after Prime Day. Prime Day hasn’t just created an environment in which Amazon is making money – it’s created one where shopping is happening across e-commerce retailers as consumers are motivated to spend.
“In the midst of a slower consumer spending environment, we believe Amazon’s Prime Day 2023 created a spark of spending across retail,” – Telsey Advisory Group analysts wrote.
SO, WHAT DOES THIS MEAN FOR YOUR HOLIDAY STRATEGY?
Prime Day sales growth correlates strongly with overall holiday ecommerce performance. Over the past three years, Amazon Prime Day sales growth has closely aligned with holiday season ecommerce sales growth. During the 2020 event, Prime Day’s sales growth of 42.8% YoY closely mirrored the holiday season’s 38.1% increase. And both the 2021 and 2022 events corresponded with the holiday season in terms of sales growth, with rates in the high single to low double digits.
As we head into the back-to-school and holiday seasons, consumer confidence is hitting a two-year high as inflation eases and prices start to come down. Trust in digital advertising may be stabilizing following the economic downturn and suggests ad spend is set to grow as we look toward the holiday period in Q4. These trends will be important to consider as we look ahead.
Competitive Sales: Although consumer spending is not slowing, we do know that shoppers are looking for the best price. Smart retailers should plan to capitalize on this trend to drive consumers to their own sales events online and in-store leading into the holiday season.
Ecommerce Spillover: With other retailers outside Amazon seeing the success of Prime Day, your brand likely benefited from the spill-over shopping activity we saw during the 48-hour holiday sale. Keeping in mind that 72% of survey participants are expecting to purchase the same over the holidays, and just 7% suggesting they will be purchasing more – you’ll want to analyze your brands highest-performing inventory and stock up for the holiday surge.
Building Loyalty: Buyers are looking for personalized shopping experiences, as well as Buy Now, Pay Later (BNPL) and curbside pick-up (BOPIS) options. We saw BNPL usage surge during Prime Day, another indication of buyers looking to economize. We anticipate this trend continuing into the end-of-year holiday season as shoppers are looking for flexible spending options and are more likely to return to brands that offer them.
Influencer Marketing: 57% of US adults have a favorable opinion toward social media ads with influencers, creators, or celebrities, per the Out of Home Advertising Association of America and Morning Consult. eMarketer estimates US influencer marketing spend will grow 23.4% this year to reach $6.16 billion.
Cross-Channel Marketing: Ensuring a strong presence across various channels is crucial, whether your brand primarily operates on Amazon or not. It is essential to guide consumers through the lead generation process effectively. As the holiday season approaches, consider diversifying your marketing efforts by embracing mobile, email, SEO, social media, and advertising campaigns. This approach guarantees that both existing and potential customers encounter your brand on diverse platforms, maximizing your reach and impact.
As we bid farewell to another successful Prime Day, the implications of this retail phenomenon stretch far and wide. Amazon’s impressive sales figures and the ripple effect it created for other retailers signal a promising outlook for the holiday season ahead. Prime Day has proven to be more than just a sales event for Amazon; it’s become a catalyst for boosting retail spending across the board. As we head into the back-to-school and holiday periods, understanding the trends and patterns from Prime Day can be the key to formulating a winning holiday strategy.
From capitalizing on competitive sales and leveraging e-commerce spillover to embracing personalized shopping experiences and influencer marketing, the lessons from Prime Day provide a roadmap for retailers to navigate the bustling holiday landscape successfully. Embracing cross-channel marketing and staying attuned to consumer preferences will further bolster brand loyalty and drive customer engagement.
So, gear up for the festive cheer ahead and let Prime Day’s impact illuminate the path to your holiday performance success. Happy selling! Take your performance marketing to the next level – subscribe to our digital marketing blog today.
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Marissa is a Strategy Insights Manager at Adlucent. She has a passion for empowering businesses to tell their story through media that is fueled by data. She measures success through engaged audiences that are inspired to take action. When away from her desk, you can find Marissa jumping in Barton Springs pool, reading a good book or going on neighborhood walks with her family.
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