Daily Dose of iQ: Amazon's Wins and Losses on Prime Day

Jul 17, 2015 — Allan Pulga
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Wednesday (July 15) was Amazon Prime Day, which the company was hyping up as offering better deals than Black Friday -- deals offered exclusively to Amazon Prime members.

Unfortunately for Amazon, the event was a flop for most shoppers. "Based on social media postings, a number of shoppers were disappointed with Amazon’s Prime Day sales, which they felt lacked significant savings, or simply weren’t the high-quality deals they expected," wrote TechCrunch's Sarah Perez.

Amazon faced a significant social media backlash on Prime Day.

"Many, too, were disappointed that some of the better deals on the site on Wednesday were for Amazon’s own hardware, but the company didn’t have enough stock to meet demand."

By Amazon's account, however, Prime Day was a resounding success. In a press release yesterday (July 16), the company announced it sold more units "than the biggest Black Friday ever," and had more new members try Prime worldwide than any single day in Amazon history.

Customers ordered 34.4 million items across Prime-eligible countries, breaking all Black Friday records with 398 items ordered per second," Amazon said in the release.

Prime Day's success: Raising awareness of Amazon Prime and getting new members in the habit of seeking out deals and making purchases.

Quartz's Shelly Banjo was quick to identify Amazon's real motivations behind Prime Day. She wrote (July 15) of three factors:

  1. Amazon Prime members buy almost twice as much as non-members, according to Consumer Intelligence Research Partners. ($1,200 per year in the U.S. versus non-members, who spend $700.)
  2. Amazon Prime members also shop almost twice as often as non-members. (81.7% of Prime members bought something on Amazon in May; 45.4% of non-members did, according to a Cowen Proprietary Consumer Tracking Survey.
  3. Amazon Prime membership has stalled. "Even though Amazon boasted 10 million new Amazon Prime members during last year’s holiday season, only about 70% of customers purchase a $99 full-year membership after the 30-day free trial, according to CIRP," Banjo wrote. "By the 13th month, the drop-off rate goes up to 41%, CIRP data show."

So, as long as Amazon values revenue and brand awareness over social media sentiment, Prime Day was a success. In fact, it was deemed such a success, that the company announced it was not a one-time thing, but rather will be held again next year.

And a bad day in social media might not be that bad. After all, they say there's no such thing as bad publicity.

Topics: Wireless Trends, e-Commerce

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