Amazon Prime Day 2018: Key Takeaways for Retailers
Amazon Prime Day is an event that perhaps strikes fear in the hearts of retailers worldwide. But should it? To learn more about the impact of this year’s Prime Day, Periscope By McKinsey conducted research across five global markets. Of the 1,000 U.S. consumers surveyed, 41 percent revealed they participated in this year’s event. And while 40 percent of those said they “spent the same” as last year, they also bought “a bit more” or “much more,” according to 46 percent.
Amazon Prime Day — and Online in General — is Not Alone
While Amazon Prime Day is still a significant shopping event, it has clear online competition when it comes to other sales events, even if the events are at other times throughout the year. Cyber Monday was the top competitor, with 65 percent of respondents participating. Free Shipping Day also has an impact, with 30 percent of shoppers taking advantage of that event. While many feel they get a great deal during Amazon Prime Day, the results show that the convenience of using a single marketplace and low prices isn't enough to keep consumers from shopping in “other” places.
Interestingly, the survey also found that the U.S. reports lower adoption of online shopping generally vs. other countries, with 27 percent of respondents saying they mostly or always shop in-store. This demonstrates the importance of having strong omnichannel strategies.
Shoppers Are Preparing Before Purchasing
Findings showed that consumers are getting smarter about checking prices outside of Amazon before committing to purchase. Fifty-five percent of U.S. shoppers checked “a couple” or “several” of their prices before making a purchase. In addition, ahead of Amazon Prime Day, 38 percent pre-planned the product categories in which they wanted to shop.
Key Takeaways and Recommendations
- Multichannel shopping behaviors dominate among today’s consumers. As such, investment in omnichannel retailing capabilities is critical. Attaining commercial excellence will demand more advanced channel management practices, including tailoring assortments, merchandising and promotions to online and offline channels. Organizations need to deliver truly individualized experiences across all touchpoints and gather real-time intelligence on what’s working and what's not for each customer.
- Shoppers are purchasing more items with Amazon at each successive Prime Day, but they’re also getting smarter (i.e., becoming more price aware and increasingly willing to see what’s available elsewhere). Retailers have an opportunity to capture shoppers’ appetites for deals by rolling out smart promotions that capitalize on known consumer desires — e.g., stimulating them to purchase items on their “wish list.” They should also seize the opportunity to host their own shopping days or participate in events like Cyber Monday to boost sales. However, they’ll need to adopt an advanced analytics approach to capitalize on these events and gain real value.
- Prime Day shoppers are forward-planning more, selecting which product categories/products they’ll shop for on the day. It’s time to get personalization right, moving from email promotions or product recommendations based on buying habits to a much more refined approach. It starts with gaining a real-time, 360-degree view of the customer — what they want, what they’ve bought in the past, their preferred engagement channels and what they’re trying to do right now. Personalized marketing techniques and messages increase the chances of showing shoppers an “unexpected delight” they’ll want to buy, helping increase the basket size for “planners.”
There’s no doubt that Amazon Prime Day keeps gaining in popularity with huge global awareness and multiplying participation every year. However, Prime Day shoppers are getting smarter, becoming increasingly price aware, and more willing to see what’s available elsewhere. With the right sales initiatives and understanding of their customers, retailers can keep them loyal and coming back for more.
For complete details on the survey’s global findings, download the report, “Beyond the Hype — The Evolution of Consumer Shopping Behaviors,” via this link.
Channie Mize is the senior vice president and global sector general manager, retail, Periscope By McKinsey.
Related story: The ‘Dog Days’ of Amazon Prime Day Advertising