Turning One-Time Buyers Into Loyal Customers: Maximizing Prime Day's True Potential

In a boon for deal-seekers across the country, e-commerce giant Amazon.com recently confirmed that its popular Prime Day sales event will return in July. The announcement comes as little surprise after Amazon reported record-breaking sales during 2024's event, which some industry experts believe may have passed $8 billion. Amazon has confirmed that Prime Day 2025 will expand from two days to four, a shift with significant implications for the retail industry.

Over the past decade, what began as an Amazon-only sales event has evolved into a retail-wide opportunity. Consumers have learned to expect deals in July and they're spending more each year regardless of which retailer offers them. During the 2024 Prime Day period, total retail sales crossed $14.2 billion, an 11 percent increase year-over-year.

With another Prime Day fast approaching, brands have an opportunity that extends beyond a short-term revenue boost. For the right businesses, Prime Day can become a time to turn one-time buyers into long-term loyal customers.

The Evolution of Amazon’s Prime Day Event

Prime Day launched in July 2015 as a way to fill a lull in consumer retail spending between shopping tentpoles like Memorial Day in May and Labor Day in September.

As Prime Day gained momentum and started capturing increased market share, other retailers began running adjacent sales to protect themselves from losing volume to Amazon. A decade later, July sales have transformed into an economic mindset akin to the "Turkey Five" shopping period between Thanksgiving and Cyber Monday.

As consumers become more accustomed to widespread sales during this stretch, brands have an opportunity to capture increased consumer spending during a historically slow retail period. They can also begin building long-term relationships with new high-value customers. To accomplish this, brands must understand the type of consumers their business attracts as well as their potential to become repeat buyers.

Assessing Business Models for Prime Day

Transforming Prime Day from a short-term sales accelerator into a long-term growth play relies on brands understanding a critical consumer metric: customer lifetime value (CLTV). CLTV is a metric that predicts the revenue a single customer will generate over their entire relationship with a brand. Certain types of businesses traditionally have much higher CLTVs than others.

Children's clothes are a good example. Kids go through clothing quickly, which means when parents find a brand they love, they return again and again to purchase. Consumables like hand lotions, perfume, toothpaste and CPG products also have high CLTVs because they're regularly used and replaced.

Brands selling items like car tires, windows and doors, mattresses or wedding rings are at the opposite end of the spectrum. These categories have fewer repeat purchasers, so an individual's LTV is relatively low.

Why CLTV Should Drive Summer Sales Approaches

When brands understand CLTV, they can decide how aggressively to pursue sales opportunities like Prime Day. Brands with high CLTV, multiple cross-selling opportunities and more generous profit margins can consider running attractive sales, confident they will recover initial discounts through future purchases.

Brands with high CLTV metrics also stand to gain more than just immediate transactions. Each new customer also brings:

• revenue from repeat purchases over months and years;
• valuable data, including email addresses and purchase history; and
• word-of-mouth promotion to friends and family.

Under the right circumstances, an event like Prime Day can serve other business objectives, like clearing excess inventory or old product models. However, this all relies on a brand's clear understanding of its business model and customer behavior.

Standing Out in the Prime Day Noise

Brands that understand their CLTV position will have a leg up on creating compelling Prime Day offerings. However, they will still need to stand out in an increasingly crowded market. While consumers expect deals, they've also become more discerning about which promotions offer genuine value — a shift fueled in part by their experience shopping past Prime Day sales.

There's a growing perception that Prime Day is a warehouse-cleaning opportunity rather than a chance to save on more in-demand items. Brands can differentiate themselves during Prime Day 2025 by giving consumers what they're really looking for: genuine deals on quality products. By focusing on product quality and the overall customer experience, brands can make it even more likely that Prime Day shoppers will come back again.

Other Prime Day Considerations

While offering premium products at compelling discounts can help brands stand out during Prime Day, there's more to consider within an overall strategy.

Brand Reputation Protection

Many businesses are reluctant to discount their products, concerned that their brand will be devalued. However, with Prime Day now a nationally recognized sales event, brands can participate without risking their integrity or premium position.

Higher Advertising Costs

It's almost certain that cost-per-click rates will rise as retailers compete to promote their sales through paid advertising channels like Google and Meta. Brands that want to stand out must budget accordingly to maintain visibility during this high-traffic period.

Non-Participation Consequences

Brands that choose not to run promotions during Prime Day might see lower sales or a decline in conversion rates as consumers shift spending to competitors offering discounts. It might be wise for non-participating brands to pull back on advertising during this period to avoid paying a premium for traffic that's less likely to convert.

Navigating Economic Uncertainty and Tariffs

One factor that will make Prime Day 2025 different from previous years is a growing sense of economic anxiety driven by recent changes in tariff and trade policies. While dealmaking is ongoing with major trading partners, predicting the economic environment is difficult.

Here are a few points for brands to consider when approaching a major sale in the face of market uncertainty:

Preparation Provides Protection

These tariffs were not a surprise to most businesses. The new policy direction was signaled well in advance, giving savvy retailers time to stock up on inventory. That preparation should provide some pricing protection going into Prime Day 2025.

Consumer demand also remains relatively strong, despite beginning to taper off in 2024. As a result, there will likely be ample demand during Prime Day, particularly for brands offering compelling discounts.

Strategic Pricing Approaches

Brands concerned about tariff impacts can employ a few pricing strategies as part of their overall Prime Day planning:

• Absorb some additional tariff costs to maintain competitive pricing.
• Follow industry-wide trends if most competitors are raising prices.
• Pivot to promoting products sourced from less-impacted countries.

Competitive Monitoring

The most effective approach is for brands to monitor competitors for signs of price movement in the weeks leading up to Prime Day. If everyone is raising prices, a brand may choose to do the same. Or they may decide to absorb a slight margin decrease to maintain pricing and increase sales volume.

Ultimately, a brand's Prime Day pricing decisions should align with its long-term customer acquisition goals established through CLTV analysis. This approach enables brands to turn economic challenges into potential competitive advantages.

Taking the Long View

As we approach July’s four-day shopping event, it's clear that Prime Day has evolved from a members-only midsummer experiment into a major opportunity for retailers of all kinds. The most successful brands will approach Prime Day as more than just a temporary revenue booster — it's a chance to create new customer relationships that will help them flourish for years to come.

All this depends on a brand's understanding of the value its customers bring to the business. Brands with high CLTV metrics, comfortable margins and plentiful cross-selling opportunities can invest in customer acquisition, knowing they will recover short-term discounts through long-term loyalty.

While economic uncertainty and tariff concerns create additional complexity, they also allow brands to differentiate themselves through thoughtful pricing strategies and premium offerings.

The brands that win Prime Day will not always have the steepest discounts or the loudest advertising. Instead, they will take a long-term approach that turns Prime Day deal-seekers into loyal customers who continue buying long after July ends.

David Johnson is vice president of agency growth at Logical Position, a digital marketing agency.