Does Amazon Prime Day matter?

By April Berthene

June 27, 2024
Amazon Prime Day 2024

The Prime Day summer sale is now in its 10th year and is one of several annual Amazon sales. Brands need to offer their own compelling discounts to stand out on this massive shopping day.

Retail giant Inc. confirmed it will hold another Prime Day sales event for its members on July 16-17. This will be the 10th year it will host the sale, which brings in billions of dollars for the web-only giant during the two-day period, according to industry estimates.

The sale offers deals to shoppers in Amazon’s Prime paid membership program, which is $14.99 per month or $139 per year. About 167 million U.S. consumers are Prime Members, according to estimates from research firm Consumer Intelligence Research Partners LLC.

Amazon touts it will have deals on millions of products, such as from cosmetic brands Clinique and Kiehls, and shoe brand Allbirds during Prime Day. However, the sale largely brings in revenue for Amazon’s own products, such as its Echo smart speakers, TV streaming device Fire Stick and private label brand Amazon Basics. In 2023, 39% of revenue during Prime Day was on Amazon’s own products, according to market research firm Numerator. In 2023, Amazon generated $12.9 billion in revenue during its two-day July sale, according to estimates from ecommerce research publisher Digital Commerce 360.

Amazon Prime Day history and importance

Amazon initially launched the sale in 2015 to much fanfare and as a way to mark its 20th year in business. The single-day event generated nearly $1 billion in sales, according to Digital Commerce 360. Since then, Amazon has expanded the sale to two days and has added more sales events to its promotional calendar. For example, Amazon added a “Deal Days” sale in October, which some retail experts view as a kickoff to holiday sales before Halloween.

Although Amazon has added more sales to its calendar, each one serves a different purpose, said Brad Jashinsky, director analyst at Gartner. The July Prime Day sale is still “incredibly important for Amazon and Amazon Sellers,” he said.

“The summer Prime Day is still the marquee sales event for Amazon and is especially important for categories that are most popular in the summer, such as back-to-school, travel and swim,” Jashinsky said. “Amazon promotes Prime Day with a huge advertising campaign, influencer activations, and messaging across their owned channels.”

The first day of Prime Day 2023 was the single largest sales day in Amazon’s history, larger than any Black Friday or Cyber Monday, according to the web giant. This demonstrates that the sales event remains an important revenue driver during an otherwise slow retail season, said Paula Rosenblum, co-founder and managing partner at retail consulting firm RSR Research.

“The reality is, retailers need a way to get shoppers ‘off the beach’ and into the shopping experience.  Sales in July were always a thing,” Rosenblum said. “So since Amazon has no physical presence, it had the opportunity to get customers shopping while they were on the beach. In other words, summer sales have and will always matter.”

Brands need to market their own discounts during Prime Day

Typically during Prime Day, other brands will also be offering sales on their own websites, to capitalize on more consumers shopping online during this day. Plus, 45% consumers identify as primarily budget oriented, and will be browsing other sites to price match during the sale, according to a Gartner consumer survey.

To take advantage of these extra shoppers, marketers should make a strategic decision on whether they can offer compelling discounts to compete with Prime Day, Jashinsky said. Brands should focus on having a deal on a product that has a history of leading to repeat sales and increased customer lifetime value, he said.

“The key is starting messaging before Prime Day while also capturing shoppers that are comparing deals during Prime Day,” Jashinsky said. “Searches for shopping related terms increase on search engines during Prime Day and are a channel that marketers can reach lower-funnel shoppers who are comparing deals.”

Amazon Prime Day competing sales

Not the least of these competing sales are from large mass merchants Target and Walmart. While their marketing message during Prime Day has historically focused on how their deals are available for all shoppers, not just paid members, both retailers have recently launched paid tiers of their loyalty programs, Target Circle and Walmart+.

Walmart had a members-only sale at the end of June and plans to have another sales event just before Prime Day July 8-11 for all shoppers, no membership required. Similarly, Target announced a week of sales for its free loyalty program members July 7-13, and it will offer a discount on the paid tier of its membership program during this week.

Again, sales are an effective marketing tool and Target and Walmart are wise to take advantage of shopper attention to promote themselves, Rosenblum said.

Despite competition, Jashinksy expects Prime Day 2024 will be another strong sales event if Amazon and its sellers can provide compelling discounts.

“Amazon has continued to see sales growth despite facing tough competition from Shein, Temu and Walmart,” he said.