Now that all the Prime Day excitement has died down, it’s time for a reality check. Did the much talked about summer shopping holiday live up to expectations? And are Prime Day deals a worthwhile investment for marketplace sellers?
If you go purely by Amazon’s recent statements in the press, Prime Day 2016 was a success. Amazon cited a 60% year-on-year (YoY) spike in order volume worldwide this Prime Day compared to last year and called the event its “biggest sale day ever.” Amazon did not reveal its actual sales for Prime Day 2016, but estimates range from $525 million according to FBIC analysts to $2.5 billion as per Internet Retailer.
First-party sales on Amazon (products directly sold by Amazon) like the Kindle, Fire sticks, Echo et al saw tremendous growth on Prime Day, CommerceHub’s “Prime Day Impact Report 2016,” which draws on third-party seller data, demonstrates that retailers and brands on the Amazon marketplace had a more measured story to tell.
Prime Day 2016 Was an Amazon Party All the Way
The first ever Prime Day last year was an experiment. Its success prompted Amazon to pull out all stops and promote Prime Day aggressively with both shoppers and sellers again in 2016.
However, Amazon’s own products got prime placement in all their Prime Day promotions. Deals like the $1 Amazon Dash buttons and $50 off on the Amazon Echo made Prime Day a huge win for first-party sales. Prime Day growth centered on Amazon’s own products as well as products Sold-and-Shipped-by-Amazon, especially in the “Electronics & Computers” categories.
Additionally, this year, the requirements for third-party seller deals to be eligible for Prime Day were much tougher than before. They also strongly favored sellers eligible for FBA and/or Seller Fulfilled Prime.
Third-Party Seller Performance on Prime Day 2016
Third-party sellers on the Amazon marketplace saw a 9% YoY gross merchandise sales growth and a 16% YoY order volume growth according to CommerceHub data.
While these figures may seem modest at first look, it is important to note that Prime Day last year set a record in terms of sales for Amazon’s marketplace sellers. On Prime Day 2015, CommerceHub sellers grew revenues by a whopping 142% YoY compared to the business-as-usual, non-Prime Day revenues on July 15, 2014. When you look at last year’s already high sales numbers, any growth on the previous year’s success definitely gives this new shopping holiday credibility as a growth opportunity.
This year, Amazon also introduced promotions leading up to the event itself, billed as the “Countdown to Prime Day.” Third-party sellers cashed in on the longer sale window before Prime Day, with CommerceHub seeing a 38% YoY growth in Same Store Sales (SSS) the day before Prime Day 2016 (i.e. 7/11/2016).
Trends to Watch
The top performing categories on Prime Day for third-party sellers were:
Besides departments like “Electronics & Computers” and “Toys, Kids & Baby”, which were heavily promoted on the custom homepage takeover on Amazon, other departments too enjoyed a halo effect from the aggressive Prime Day promotions.
Prime Day was a “holiday” created last year by Amazon in the middle of the typically slow summer season to. drive shopper excitement and increase revenue volume at a time of the year when consumers are typically not in the shopping mood. It’s not a new concept, much like “Christmas in July” attempts by many other retailers, but clearly Amazon is experimenting their way to a winning format.
The Prime Day Impact Report 2016 will dig deeper and look at questions like
- Were this year’s Prime Day sales impacted as Prime Day moved closer to the 4th of July holiday?
- How deep was the impact of the “Prime Day Countdown”?
- Which product categories performed best for third-party sellers this Prime Day?
Note: Click here for the methodology used for aggregating and calculating Same Store Sales [SSS] and order volume data