If you’re a small business you’ve probably come across the term ‘omnichannel’ whilst building your business strategy. Even if you haven’t, you’re likely already implementing it.
“More deals than Black Friday,” promises Amazon of its Prime Day, which will mark the company’s 20th anniversary on Wednesday, 15 July. That’s no small claim when you consider the figures associated with Black Friday, which delivered more than $1.5 billion in online sales alone in 2014.
Amazon is the main driver of both Black Friday and Cyber Monday: the company reduced prices on about 80 million products during last year’s event. According to Channel Advisor, Amazon was the biggest winner of cyber weekend 2014, with year-on-year sales up 76.91% on Black Friday and 30.76% on Cyber Monday.
These ‘super-sale days’ have crossed US borders to become international phenomena. In 2014, for example, Amazon UK said Black Friday was its busiest day ever, with more than 5.5 million items ordered – that’s about 64 items a second. And Amazon UK is promising even more bargains for Prime Day.
“We’re offering Prime members thousands of deals on Prime Day. In fact, in the UK we are offering more than double the number of deals that we offered last Black Friday,” says Christopher North, managing director at Amazon UK.
Could Prime Day become the next annual online shopping phenomenon? Or is it just a promotional campaign for Amazon Prime?
More importantly, what does Amazon Prime Day mean for third-party e-tailers?
Let’s take a look at the facts.
What is it?
For one day only, on Wednesday, 15 July Amazon will be offering thousands of “lightning deals” and “deals of the day”, plus unlimited one-day delivery. Amazon has announced that new deals will be displayed throughout the day – every ten minutes at times. And there will be deals across most product categories including electronics, toys, video games, films, clothing, garden furniture, sports and outdoor items.
Who is it for?
Prime Day deals will only be available to existing or new members of the £79 ($99) a year Amazon Prime service. In the UK, if you sign up before midnight on Tuesday, 14 July, you’ll qualify for Prime Day offers – and get a £20 discount on the annual membership fee.
Where is it happening?
Nine countries are taking part in Prime Day: the US, the UK, Spain, Japan, Italy, Germany, France, Canada, and Austria.
Why is it happening?
The official line is that Amazon is celebrating its 20th anniversary by rewarding its most loyal customers with 24 hours of discounts and deals.
There are other motives, too. Amazon Prime was instrumental in helping the company to report a profit of $214 million in the last quarter of 2014 – a quick and dramatic reversal from the larger-than-expected loss reported in the previous quarter, and largely the result of increased subscription charges for Prime. Recognising its importance, Prime Day is Amazon’s latest campaign to sign up new members to this service.
Some market commentators think that Prime Day is a pre-emptive strike by Amazon to consolidate its position and remove the competitive threat from members-only special deals club Jet.com, which will launch in the US later this year. If Prime Day’s deals attract large numbers of new Prime members, the hope is that they will remain committed to Amazon as the best place for online deals.
Can third-party retailers participate?
The word from Amazon is a definite Yes, but participation seems to be restricted to third-party retailers using Fulfilment by Amazon. These companies have been notified in advance and, according to Amazon, many will be offering deals on Prime Day.
Retailers who aren’t participating with Prime Day offers could still benefit from increased traffic to the site – as has been demonstrated on Black Friday.
Will this be an annual event?
There has been no commitment to this yet, but both Amazon and Chinese ecommerce giant Alibaba have had prior success in piggybacking on existing holidays to create their own annual shopping events.
In the US, Black Friday marks the beginning of the Christmas shopping season. It was traditionally a discount shopping day in the malls, as stores took advantage of the day after Thanksgiving being an additional holiday for government employees. Driven by Amazon, Black Friday and Cyber Monday have become annual global online retailing phenomena.
In China, Alibaba took advantage of the existing Singles’ Day on 11 November (which conveniently falls in a consumer spending lull between National Day and Chinese New Year) to create a major discount shopping event – whose sales had surpassed those of US Cyber Monday by 2012.
Amazon Prime Day isn’t linked to an existing holiday or event, but given Amazon’s size and clout it is feasible that 15 July could be developed into an annual, mid-summer sales fest.
How to make sure you benefit from Amazon Prime Day
Whether you have been invited to participate in Prime Day – or are just hoping to benefit from increased footfall on the Amazon site – it is more important than ever to ensure that your products are visible, in stock, competitively priced. And if you’re selling internationally you need to make sure you can still make a profit once you convert payments back into your home currency.
If you’re an international e-tailer, Currencies Direct can help you to take advantage of currency changes to adjust your prices and keep them competitive – without damaging your profits. This could just give you the pricing edge you need for Amazon Prime Day.
And don’t forget that marketplaces like Amazon can charge up to 4% of your sales value for foreign exchange transactions. Our e-tailer Collection Accounts provide you with an overseas foreign currency bank account, located in the markets in which you sell, that ultimately help you save up to 75% of your foreign exchange costs when converting back to your home currency.
For more information contact our e-tailer team on +44 (0) 20 7847 9269 or email [email protected].