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Customer Retention. Automated

Lessons from Amazon Prime Day

Posted by Polly Flinch on Jul 16, 2015 10:52:00 AM
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Amazon_Prime_DayIn celebration of its 20th Anniversary, Amazon created Prime Day - a one day event exclusively for Amazon Prime customers that was dreamt up as a way to boost and replicate sales seen during Black Friday and Cyber Monday during the summer months. Amazon is not the first retailer to create their own "holiday" - Ben & Jerry's Free Cone Day, Krispy Kreme's Free Donut Day, Chick-fil-A's Dress Like A Cow Day - but they are the first eCommerce store to try this. Met by high consumer demand from Prime members, Prime Day disappointed many, but the numbers tell a different story. 

As of noon, yesterday, Amazon's daily sales in the US were up around 80% when compared to last year's figures and sales were up 40% in Europe. Amazon also claimed earlier in the day that its peak order rates on Prime Day had already passed that of 2014's Black Friday.1

Important Note: Amazon has somewhere around 40-50 million Prime members2 (it's thought), so while the backlash from disappointing sales may have sent many consumers to social media to complain, Amazon was still making a killing from this large consumer base. 

While I'm not suggesting every retailer should go out and create their own Prime Day, there's no reason why retailers can't ride the coat tails of what Amazon created and make their own events to draw in new and existing customers with flash sales, large deals, and more. Based on the results and consumer backlash from Amazon's Prime Day, here are a few key things to remember: 

Make Your Customers Feel Like A VIP

It's great to reward your best customers. It's also great to show other customers what they could have access to if they became a member of your loyalty program. As anyone who went on Amazon before Prime Day knows, you couldn't move around the site without seeing promotions for Prime Day - the Call To Action: sign up for Amazon Prime to take part in these monstrous sales. This is pure genius. Amazon made sure their Prime members were excited and ready to take part in Prime Day and also dangled enough bait in-front of non-Prime members to make them want to sign up.

The goal of Prime Day, according to Amazon spokesperson, Julie Law, was to increase shopping among existing Prime members and attract new members with free trials.

Bottom Line: Make sure you're ready to take a hit on things like free shipping and product margins to keep your customers happy and excited about your offerings.

Offer Promotions People Want

One of the biggest complaints from Prime Day was that all of the deals were on things that people didn't want or considered every day necessities, like cups. Many customers turned to social media to vent their frustration, even creating a new hashtag, #PrimeDayFail.

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And other companies and competitors jumped on the bandwagon as well: 

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This is not exactly the publicity you want. Sure people are talking about your company, but not in a good way. 

Bottom Line: Know your customers. Make sure customers are seeing promotions and deals they want. 

Deliver On What You Promise 

Prior to Prime Day, the Amazon advertised "Black Friday-esque" deals and slashed prices, but the general feeling was that Amazon was showing the same products from their daily "Lightning Deals" as bigger deals became unavailable. Amazon also promised that deals would be rolled out throughout the day; however, by 3pm EDT deals on electronics had almost been wiped out. Similarly, customers on the West Coast woke up to find all of the big items completely sold out and were re-directed to a waitlist. 

For people who were able to nab the big electronics, Amazon gave them exactly what they were hoping for; however, other customers were left disappointed with a bad taste in their mouths from the whole experience. 

Bottom Line: Deliver on promises to your customers. 

Overall, Amazon Prime Day was an interesting step for eCommerce retailers. As this was the first ever Prime Day, there is definitely room from improvement. The good news? Other retailers can learn from their mistakes and work to create their own engaging, exciting, and competitive events.


 

Sources: 

  1. Perez, Sarah. "Despite Consumer Complaints, Amazon Prime Day Sales Soar." TechCrunch. TechCrunch, 15 July 2015. Web. 16 July 2015.
  2. Flank, Blair Hanley. "Analyst: Amazon May Have 50 Million Prime Members - GeekWire." GeekWire. GeekWire, 18 Sept. 2014. Web. 16 July 2015.
  3. Mac, Ryan. "On Prime Day, A Closer Look At The Numbers Behind Amazon's Membership Program." Forbes. Forbes Magazine, 15 July 2015. Web. 16 July 2015.

 

Topics: Customer Retention, Holiday Marketing