FUNG GLOBAL RETAIL & TECHNOLOGY’S TAKE

Data on Amazon Prime Day 2016 was mixed: E-commerce solutions company ChannelAdvisor estimated that US sales were flat and that UK sales were up by a subteen percentage, but Amazon itself said that it saw solid double-digit figures for both countries. Despite these discrepancies, Amazon Prime Day offered a huge win for the company. It likely signed up nearly 1.5 million new Prime members for the next 12 months—and those members outspend regular Amazon customers by a factor of more than 2:1. The company also reported huge sales of Amazon devices, which are optimized to consume Amazon video, music and other content.

PRIME DAY 2016 RESULTS

Today, Amazon released initial results from its 2016 Prime Day shopping event, which it termed its “biggest day ever.” The company said orders increased by 60% worldwide and by more than 50% in the US. (Last year, Amazon said that orders increased by 266% on Prime Day versus the same day the prior year.) Following its biggest day ever, the company stated (as it did last year), “After yesterday’s results, we’ll definitely be doing this again.”

Source: androidauthority

Highlights of the day include:

• Record Prime Day sales of Amazon electronic products, including Fire TV devices, Fire tablets, Kindle e-readers and Alexa-enabled devices.
• Prime Day orders nearly tripled year over year for small businesses and sellers on Amazon.
• Amazon calculated that customers achieved double the savings as on Prime Day 2015.
• Sales included more than 2 million toys and 1 million pairs of shoes.
• More than 90,000 TVs were sold.
• The number of customers ordering via the Amazon smartphone app increased by more than a factor of two, and more than 1 million customers used the Amazon app for the first time.
• Other hot products included pressure cookers, headphones, hammocks, Roomba room-cleaning robots and Lenovo laptops.

Amazon strongly marketed its own consumer electronics products by offering significant discounts on them. As a result:

• Amazon sold three times more devices than it did last year on Prime Day.
• It sold 2.5 times more Fire TV devices than last year, and the Fire TV Stick was the best-selling device globally.
• Amazon sold hundreds of thousands of Kindle e-readers.
• Sales of the Amazon Echo artificial intelligence appliance were up 2.5 times versus the previous daily record.
• The most popular Amazon Dash Button brands purchased on Prime Day were Cascade, Charmin and Tide.
• Members used voice commands to purchase one exclusive Alexa deal per second, on average (there are 86,400 seconds in a day).

The hottest products varied by country, as shown below.

Source: Amazon

WHAT AMAZON DID NOT ANNOUNCE

Like last year, Amazon did not provide Amazon marketplace sales figures, for either revenues or gross merchandise volume. It also did not provide a specific figure regarding how many Prime members there are—the company just referred to the “tens of millions” figure that it has been using recently. In contrast, last year, the company announced that it had signed up more new Prime members than on any other single day in Amazon history. Based on figures from Consumer Intelligence Research Partners (CIRP), Fung Global Retail & Technology estimates that 1.5 million people signed up for Prime on Prime Day last year.

VARYING PRIME DAY FIGURES

Prime Day sales estimates from ChannelAdvisor differ significantly from the order figures Amazon provided today. According to ChannelAdvisor, US sales were flat as of 5:00 p.m. ET on Prime Day (i.e., with eight hours left to go until midnight PDT) after having been flat at 11:00 a.m., and UK sales were up 12%. These figures contrast sharply with Amazon’s claims that orders increased by 60% worldwide and by 50% in the US yesterday. Fung Global Retail & Technology is maintaining its estimate of $525 million in daily sales, up 26% from $415 million on Prime Day last year.

PRIME DAY: THE GIFT THAT KEEPS ON GIVING FOR AMAZON

Ultimately, Amazon Prime Day is a win-win scenario for customers and Amazon. Customers receive deals and discounts on the day, and Amazon locks in new, big-spending Prime members for the next 12 months. Many of the biggest sellers were Amazon hardware devices, which generate a stream of multimedia sales for the company. Prime customers spend an average of $1,200 per year, compared to $500 per year for normal customers (according to CIRP), so Prime Day is a successful tool that serves to lock in a new group of highly profitable Amazon customers for the following 12 months.

Source: Forbes