Amazon Prime Day 2017 Smashes Revenue Record

Amazon maintained its third annual Prime Day on July 11. The event actually started the evening of July 10 and provided 30 hours of bargains rather than the 24 offered from the two prior years. Launched in 2015 to celebrate Amazon’s 20th anniversary, the earnings gala is now a way for Amazon to sign up more Prime members for a $99 annual fee and market its line of merchandise. Just Prime members can store the function.

The Statistics

While Amazon doesn’t release sales figures, the company said it had record earnings — 60 percent greater than the exact same 30-hour period in 2016, and much more than Black Friday and Cyber Monday 2016 combined.

Prime Day 2017, according to Amazon, was the largest sales day in the business’s history with buys clocking in at 6,000 things a minute in 13 nations. Analysts estimate that the company garnered $500 to $600 million in sales. Without giving specific numbers, Amazon said it signed up more Prime members at the 30-hour window than ever before in that interval. The amount of consumers engaging grew by over 50 percent over this past year.

How much Prime Day contributes to gain is more challenging to decipher. Amazon offers deep discounts on its products, particularly those it needs to market for tactical reasons. As an example, Amazon cut the price of the Echo Dot smart house helper by 30 percent, to $35, for the day. It was the highest-selling item on Amazon, while Echo sales overall were seven times greater compared to 2016 Prime Day.

The business is aggressively marketing the Echo product line since it enables voice-activated purchases through the Alexa voice system. Amazon wants the apparatus in as many houses as possible since, reportedly, it considers the simplicity of voice ordering will encourage impulse purchases and boost earnings.

Consumer Intelligence Research Partners, a market research firm, estimates that 10.7 million U.S. consumers have obtained an Amazon Echo apparatus — the Echo, the Echo Dot, and the Amazon Tap portable Bluetooth speaker.

 

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New Prime Members

Increasing the amount of Prime readers is tremendously important to Amazon. According to research company Statista, on an yearly basis Prime members spend nearly two times as much at Amazon than non-Prime shoppers do — $1,300 versus $700. Morgan Stanley provides a more generous estimate, saying that Prime members spend 4.6 times as much as non-Prime clients, with 40 percent of subscribers spending more than $1,000 each year at Amazon.

As of February 2017, Morgan Stanley estimated the amount of Prime subscribers at 65 million. Following Prime Day, this amount is probably edging closer to 70 million.

International Sales

Third-party sellers sold over 50 percent more things on the website by noon on July 11 than in the exact same time period last year, according to Amazon. In general, Prime Day earnings by third party merchants increased 30 percent compared with 2016, as a result of international demand.

Prime Day made its debut in both India and China this year. Amazon has high hopes for both of these markets, especially India in which Amazon has just received government approval to sell groceries. In that country, Amazon concentrated on well-known international brands, promising Prime members that they might be the first to purchase”exclusive goods” from international apparel brands. A Prime subscription in India costs only $8 yearly. The Echo smart helper will begin selling in India later this year.

In China, Amazon faces stiffer competition, particularly from Alibaba’s Tmall and out of Beijing-based JD.com. China’s Prime Day offered 46 hours of earnings and featured third party international brands instead of Amazon-branded products. Amazon’s China home page featured an”Overseas Goods” store that included watches, footwear, and accessories. Baby products also did well.

New Technology and New Products

Prime Day provides Amazon an chance to test new technologies and work out any kinks well ahead of the peak holiday shopping season starts. This year the company is testing its Prime Air freight shipping service for its two-day shipping program. Prime Air allows for a later cut-off buy time for two-day shipping. By flying direct point-to-point as opposed to using hubs, Amazon quotes it can decrease cross-country delivery time by 12 to 15 hours.

Free two-day delivery is the primary reason clients subscribe to the Prime program, based on Business Insider.

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Prime Day is also a way for Amazon to boost awareness of its private labels, which are increasing in number. Its recently started apparel brands — such as Buttoned Down (men’s tops ), Lark & Ro (women’s wear), and Mae (lingerie) — featured prominently at the offerings.

Groceries haven’t been big sellers in the previous two Prime Days but Amazon’s announced purchase of Whole Foods did spur more browsing of grocery staples in 2017. Deals comprised up to a 50-percent reduction for a few of private-label food products, such as snacks and spreads out of Amazon’s Wickedly Prime lineup.

The Amazon Kindle and Kindle Fire were also great private label vendors for Prime Day. Overall for both Amazon and third party vendors, toys and kids’ and infants’ items gained 25 percent of sales with electronic equipment, computers, and office tools raking in 22 percent.

Amazon will probably continue to use Prime Day to tinker with new technologies and product offerings. Additionally, it will try to expand cross-border revenue, tailoring its offerings to the customer demands in each country and seeking to get loyal clients with Prime subscriptions.

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