By: Kavita Cariapa, SVP, Head of Commerce Activation
Amazon Prime Day has once again raised the bar, achieving unprecedented sales and a surge in Prime memberships. This year's event marked the highest sales volume to date, with a significant increase in Prime subscriptions as countless shoppers joined in anticipation. The event featured substantial discounts across a broad spectrum of more than 35 categories, demonstrating that Prime Day's allure extends beyond electronics and gadgets to encompass a variety of product categories.
We’ve seen an ongoing trend in recent tentpole events of customers navigating towards essentials vs luxury expenses and this Prime Day was no different. dentsu brands fared well with featured deals across grocery and household products, throughout both event days (and across all retailers), creating opportunities for increased new-to-brand acquisition and customer loyalty.
While overall sales volume and return on ad spend (ROAS) continue to be priority metrics monitored through Prime Day, our clients are increasingly monitoring Share of Shelf (SoS) and Share of Voice (SOV) metrics. Amazon, Walmart, Target, and other retailers are all becoming increasingly competitive; not only from marketplace competition but also from retailers owned private label brands. To stay relevant and present during these peak traffic periods, marketers and agencies must monitor brand share, especially how it correlates to unit/revenue volume and advertised spend.
Amazon vs. TikTok
As the retail environment evolves, we’d be remiss to mention partners like TikTok, who are stepping up as emerging forces in the market. Many experts viewed TikTok’s 'Deals For You Days' as a direct challenge to Amazon, however, we see TikTok as an emerging platform, crafting a social-first tentpole approach to reach new audiences and engage customers through shoppable video creatives. Although TikTok’s event started just a week prior to this year’s Prime Day, it didn’t stall Amazon’s stronghold in retail due to lack of consumer and retailer participation. Amazon, for its part, embraced social media for Prime Day promotions, leveraging its Inspire platform and partnering with micro-influencers across various channels, TikTok included.
The competition in discounting also had its part to play, with TikTok's average discount of 18% not quite matching Amazon's 22%, potentially affecting consumer engagement. TikTok, as it ventures into the commercial sphere, will continue to confront hurdles in growth, including some initial discounting slip ups and logistics issues as all retailers do. Yet the merging paths of retail and social media offer a fascinating view into the future of online shopping and customer interaction, with massive potential for brands to acquire net new audiences and leverage a strong, creative content strategy. At dentsu, we are eagerly waiting to see how TikTok continues to evolve its Commerce and Shops strategy for the upcoming holiday season.
Looking Ahead to the Holidays
As the dust settles on this year's Prime Day, Amazon's continuous innovation and market leadership set a new standard for upcoming retail events. Analyzing the insights gained from this year's Prime Day is essential for brands as they prepare for the wave of holiday shopping. A few key tips that will help maximize business outcomes through this upcoming holiday season:
- Maximize Lead-Up and Lead-Out event days: The holiday season sales dates are no longer limited to single-day sale events; significant revenue can be driven pre- and post-tentpole periods and it's important to stay present during these peak periods of customer traffic
- Use historical trends to enhance digital shelf: Analyze keyword trends, creative engagements, and ad performance to optimize retailer product detail pages (PDP) and brand stores. Customer responsiveness can easily influence the checkout experience and how a customer responds to a PDP that ultimately converts to a sale.
- Ensure adequate inventory coverage: Optimal inventory support is always challenging, especially as supply chain issues grow during the holiday season. It’s imperative that promoted or advertised SKUs have adequate unit support (ideally 8 weeks of cover) to minimize risk of out-of-stock experiences as customers look to purchase
- Understand pricing trends from Prime Day sales: Before October or Cyber 5 deals go live, brands and marketers should understand price sensitivity from the most recent Prime Day. What percentage of the portfolio sold was opening price point products? What unit volume was sold at discount tiers (i.e. 10% off, 20% off, etc.)? Learning how customers respond to price changes can be the best predictive strategy to maximize sales and profitability this holiday season.
Prime Day's growth has been astounding, from its inception a decade ago to selling over 375 million units today. I think back to my time at Amazon when it was first announced and how the team scrambled to engage brands for the event. Fast forward to 2024, when Prime Day is not only a key date in retail, but other retailers are mimicking the event for their own success. It's a testament to the ever-changing nature of retail. All that said, we wish you a successful upcoming holiday season! Our team would be happy to help you with your tentpole strategy. Get in touch with me and my team.