2020 was a confusing year for retail, but at least it ended better than it began. And as the world slowly reopens for business in 2021, all evidence suggests that consumers are ready to reopen their wallets as well.
Amazon Prime Day Returns to Its Normal Schedule
When Amazon launched Prime Day in July 2015 to celebrate the company’s 20th birthday, the big idea was to create a branded off-season shopping event to “offer a volume of deals greater than Black Friday, exclusively for Prime members.” Over the course of those first 24 hours, customers from nine countries ordered more than 34 million items -- that’s an astonishing 398 items ordered per second.
By 2019, the event had expanded to 48 hours, and Prime “day” had become Prime “days” in 18 participating countries. The two-day blow-out included deals on Amazon’s own products, as well as items from Amazon market retailers and other U.S.-based artisans and entrepreneurs.
By last July, global e-commerce was surging. Many retailers and restaurants had introduced safe pick-up options for online purchases, including BOPIS (buy-online-pickup-in-store) and BOPAC (buy-online-pickup-at-curb). Yet Amazon chose to delay its highly anticipated annual sale until the Fall (more on that later).
2021 marks a return to Prime Day’s normal summer schedule. This year’s sale occurs in June, more than a month earlier than previous years, and consumers say they’re ready for it.
- 81% of U.S. respondents to a recent survey about Amazon Prime Day (APD) report the annual mid-summer super-sale “puts them in the mood to shop.”
- Almost 45% say this year they plan to shop multiple websites on APD and already have the items they plan to purchase in mind.
- Previous years’ data shows that retailers who time their own online promotions to coincide with APD see a significant lift in sales over the duration of Amazon’s event.
So what did happen last year, and will it happen again?
In 2020, Amazon decided they would move their big summer sale to October due to the pandemic. And while shoppers came back for Prime Day deals, they didn’t show up in the numbers they had before.
They did, however, still spend, on everything from technology, to cosmetics, to home furnishings. As a result, both the halo effect of APD on other retailers and the total sales from APD 2020 were up from 2019.
In aggregate, APD merchants raked in more than $10 billion in revenue over two days. Of that amount, marketplace sellers of non-Amazon products sold more than $3.5 billion worth of goods. That’s approximately ⅓ of total Prime Day sales and nearly 60% more than they sold the prior year.
It’s possible that moving the event from Q3 to Q4 helped fuel early holiday shopping demand. It’s also likely that government-funded stimulus checks and hopes of an effective vaccine on the horizon helped consumers see some welcome light at the end of the COVID tunnel. That alone encouraged the retail therapy we all needed to make it a more “normal” holiday season.
Whatever the reasons, 2020 proved beyond a doubt that Amazon Prime Day has become a viable and welcome addition to the seasonal sales calendar. Other major retailers, including Target and Walmart, are fully on board for this year’s “Black Friday in summer.”
It’s hard to know how manufacturing and global supply chain disruptions will affect this year’s prices. Some analysts warn the discounts may not be as deep as we’re used to, and free one-day delivery might turn out to be wishful thinking. Still, there’s every reason to think Prime Day 2021 will be a huge deal.
Impact on logistics
Even though it increased its in-house shipping capacity by 50% last year, when Amazon gears up to provide one-day deliveries for millions of people at the same time it puts serious pressure on UPS, FedEx, and other third-party carriers. As a result, some smaller companies may not even be able to get space on a truck during Prime Days.
A physical sales location like a local distribution center can solve last-mile delivery problems by taking trucks out of the fulfillment equation. With a convenient brick-and-mortar alternative to shipping your customers can order online and pick up purchases the same day.
About CURA Resource Group
CRG specializes in helping retailers build and manage local distribution centers in traditionally hard-to-serve urban communities.
Contact us today to find out how a high-volume neighborhood sales center can help you provide better omni-channel customer service on Prime Days, or any day.
