Research from McKinsey & Company reveals that those online US retailers that offered deep discounts of their own, in competition with Amazon, were successful in taking advantage of the general excitement surrounding Prime Day in July.
The biggest winners were rivals that copied Amazon’s approach, with limited-time offers, steep discounts on electronics, and exclusive discounts and offers for members.
This year, Amazon sold more than 100 million items globally during the 36 hours of Prime Day, the company said. Although it won’t reveal specifics, Amazon claims 2018 was the largest shopping event in the company’s history, with a 6% increase in conversions compared to last year’s Prime Day, and a 121% boost in conversions compared to the previous week. A total of 17 new countries were involved in Prime Day 2018.
Target, Best Buy, Lowe’s and Costco were among major US retailers that adopted a similar strategy to Amazon.
In particular, Target, the second-largest department store retailer in the US, held a big one-day-only sale, offering a free six-month membership for same-day delivery, and 30% discounts on private-label brands and Google products. It saw a 129% boost in conversions over the previous week – even bigger than Amazon’s 121% lift.
Best Buy had two-day deals featuring electronics, and an Apple shopping promotion to coincide with Prime Day. It saw a 98% spike in conversions compared to the previous week.
Lowe’s promoted a two-day discount of 10% across products on its site for MyLowe’s members, and a rebate on a Google Home Mini for shoppers who spent a minimum of $150. This resulted in a 73% rise in conversions over the previous week.
What this reveals is that, like Alibaba’s “Singles Day” in China, which has evolved from a single-retailer event into a general online shopping-fest involving many rival e-tailers, Prime Day, in the US at least, has moved beyond just Amazon.
McKinsey concludes it is vital that retailers now have a specific Prime Day strategy. For those retailers not selling through Amazon, capturing headlines is key to ensuring Prime Day shoppers also visit their website, not only Amazon’s.
They can substantially increase conversions by marketing “hero” deals, especially for categories like smart-home devices and small kitchen appliances.
Sourced from McKinsey; additional content by WARC staff