How did Amazon Prime Day 2020 go?
Amazon Prime Day 2020 (13th-14th October) is behind us, and the holiday season has started. To decipher the impact of PD2020 on the holiday season, here are some data points:
- Amazon reported that third-party sales exceeded $3.5 billion and were up 60% from PD2019. Curiously, they did not indicate that it was their "biggest day ever" in their press release. Instead, Amazon emphasised the contribution of third-party sellers and its investments in small- and medium-sized businesses.
- This led some to speculate that Pd2020 under-delivered, citing SimilarWeb data that showed flat traffic to Amazon.com for PD2020 versus PD2019.
- However, CNN reports that Amazon confirmed that PD2020 was "the best on record since the annual event started in 2015".
- Edison Trends reported that PD2020 sales rose 36% versus PD2019.
- Our client portfolio saw Amazon sales increase 13% versus PD2019.
- Pacvue and Kenshoo reported PD2020 ad spending on Amazon rose by 2-4 times versus PD2019.
- Consumer survey data at Numerator suggested a modestly smaller PD2020 based on lower average order value and spend per household.
- Our tracking and analysis of PD deals showed a 16% reduction in number of deals in PD2020 compared to PD2019 and a lower average discount (25% versus 30% in PD2019).
Drawing a trend line through these scattered data points, here are my takeaways and implications for holiday 2020:
- Prime Day was a solid Prime Day, meeting expectations but lacking the mega deals of prior years. It was a big sales day, if not a massive blowout. Keep in mind that PD2020 occurred on top of already elevated online shopping activity due to the pandemic.
- Lack of any material delivery delays or logistics issues means Amazon probably succeeded in pulling some holiday demand forward to reduce peak operational stress in December.
- The last-minute scheduling of PD2020 made deep discounts difficult for brands to plan for and the already high online shopping traffic due to COVID probably reduced the perceived need for deep discounts. But the desire for brands to goose online sales and overcome lost physical store sales may become more important as Q4 progresses.
- Bigger brands competed more on media for sales acquisition than with discounts.
- As such, PD2020 was a good start to the holiday season, but it left plenty of "air in the room" for more deals and discounts later in the season. It also probably left money in the wallet for consumers to spend later in Q4.
For the remainder of Q4, brands should:
- Plan for a solid Black Friday/Cyber Weekend.
- Be flexible and ready to move working media budget to compete. Media will likely continue to be the main battlefield for sales as opposed to discounts.
- That said, closely monitor competitors to identify when discounts are put in place and determine whether competitive response is needed. Watch for who blinks first.
- Guard in-stock levels and be ready to move inventory, if possible, to ensure maximum online availability of your products.