Amazon Prime Day Series (Part 1 of 4) – The History of Prime Day

In Amazon Insights, Ecommerce by Corey Thomas

Baseball is back, vacations are planned, gas prices are going up and spring is transitioning into summer, so it’s time to start thinking about everyone’s new favorite holiday, Amazon Prime Day. As both shoppers and sellers, we all know Summer is Coming and Prime Day is almost upon us. Over the next four posts, we’ll take a deep dive into Prime Day with everything from a look back at previous performances, to predictions and strategies for maximizing the event.

First a look at the history of Prime Day and why it isn’t just about total sales for Amazon.

Amazon’s first Prime Day was on July 6th, 2015. For Amazon, like many retailers before them, the middle of summer was one of the slowest times of year for sales. Amazon faced the dreaded Summer Vacations that have historically been a major hurdle to growing sales in most categories. If a significant percentage of your customer base is traveling and away from their homes, it presents fundamental challenges to growing eCommerce sales.

Amazon had to figure out how to call the great American consumer to action in one of the slowest times of year. Fortunately for Amazon, they had an example to follow – Alibaba’s Singles Day.

If you haven’t heard of Single’s Day, a brief summary is that the unofficial Chinese Holiday was started in 1993 by some college students at Nanjing University. These students were looking for something to celebrate, even though they were single. They chose November 11th for the four 1’s in the calendar date (11/11) and found joy in celebrating their singleness. The festivities spread over the years but came to international prominence when Alibaba created a sales event out of the holiday. Since their first Singles Day event on November 11th, 2009, Alibaba has grown sales to over $30.8 billion in the 24-hour event last year, more than seven times Amazon’s global Prime Day sales in 2018. In 2015 alone, the year of the first Prime Day event, Alibaba sold $14.32 billion worth of products in 24-hours.

Bottom-line, the blueprint was in place and Amazon wanted a day of their own and they decided to use discounts and deals to achieve their goals.

But what were Amazon’s goals?

While juicing sales during a slow time of year was obvious, there was a more subtle benefit to running this program and that was more Prime Members. A pillar to Amazon’s ongoing success is their Prime Membership program, and what better way to grow the base of members in a traditionally slow time of year, than incentivize people with an exclusive “Prime Members Only” event. Add in a batch of FOMO, some big discounts, and little in the way of competition for headlines, and the opportunity was ripe for the picking.

Amazon had their iceberg, drive sales and get mountains of free publicity over record-breaking sales figures, but quietly amass more Prime Members that would pay off in the long-run. It was, and still is, a classic Bezos-ian chess move – win the headlines with a splash, but more importantly, reinforce the strength and scale of the core business. And as with many Amazon experiments, the event has been wildly successful. Consider the four-year growth below:

Source: Internet Retailer

So, what’s next? If Amazon has achieved over 440% growth in total sales over the past four years, amassed millions of new Prime Members, and added a holiday to everyone’s calendar, what should we expect this year. Check back in for our next post where we’ll predict just how big Prime Day 2019 could be and consider some less obvious chess moves that may be in the works.

Run AMZ is a full-service Amazon sales agency specializing in management on both Vendor Central and Seller Central platforms. If you need help sorting out the latest moves by Amazon and what it means for your brand, contact us and we would be happy to help.