Prime Day Recap: Are Manufactured Holidays the Next Retail Craze?
The highly anticipated Amazon Prime Day has come and gone. The commerce giant took a page out of the Hallmark playbook, manufacturing a holiday on July 15 to drive sales during an otherwise slow time while dangling another carrot for consumers to subscribe to Prime. The day rolled by with mixed reviews. Many shoppers felt it was a lot of hype for a glorified “clearance table” sale online; others found just the deal they had been waiting for.
A central question remains, however: Are manufactured sales holidays the next retail craze? Our crystal ball says yes. Consumers thirst for deals will reap rewards for retailers that execute these types of events in the right way. We see this manifesting itself in a few ways. First, retailers and brands will increasingly partner on exclusive offers to drive online transactions.
Second, the “holiday season” will continue to expand as retailers offer earlier and earlier deals to one up the competition — perpetuating the constant game of discount chicken that consumers play.
And lastly, retailers will take advantage of the halo affect that Amazon created with Prime Day and Alibaba with Singles Day to execute campaigns in and around those days.
So, how can retailers prepare for a future filled with new “sales holidays”? And what can they do to give shoppers what they want, while moving the right inventory? Consider these three tips:
1. Timing is everything. As with all seasonal sales, strategically planned events can build momentum during otherwise slower times for sales. Aside from the dog days of summer, an ideal time for a sales holiday like Prime Day is right after New Year’s. Following the holiday rush, retailers are dealing with post-holiday consumer fatigue, excess inventory and returned merchandise. A sales holiday during that period can be a great way to encourage consumers to use recently received gift cards.
2. Prepare the product pipeline. Sales holidays and other promotional tactics are much more than creating pretty pictures and tag lines. To prevent customer disappointment and burnout, retailers should carefully prepare in areas such as demand forecasting and distribution. Even more, if you are out-of-stock in one location, enable consumers to locate and purchase products across your enterprise and/or offer suggestions on what else to buy. Don’t let the sale walk away.
3. Test, test, test. The shopping journey continues to change each year. As retailers prepare for an influx of customers on a sales holiday, they should test every element of a customer's buying journey, from research to the final purchase. Retailers should also test across devices, making sure that the shopping experience is optimized for desktops, tablets and mobile devices.
For Amazon, the goal of Prime Day was to accelerate growth of Prime memberships. Customer acquisition, and not margin, has always been at the forefront of the behemoth’s strategy. And it’s not surprising as Prime members offer unparalleled intelligence about buying behavior and convert at an astounding rate of 73 percent. While it remains to be seen how successful this tactic was, the key for other retailers considering manufactured holidays is to have a clear vision for who they're targeting — and why — and then ensure the balance between inventory offered and specific buying preferences and behavior of that audience.
Rob Garf is the vice president of industry strategy and insights at Demandware, a cloud-based e-commerce platform provider.
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