Prime Day 2021 was back to its regular summer schedule this year, but in spite of a slight return to normal, the event was anything but–at least if recent history has anything to say about it.
While Prime Day continues to grow year over year and remains a large and highly anticipated event for Amazon, the market has seen its share of tumult and uncertainty over the past year. That tumult and uncertainty was reflected in this year’s June 21st and 22nd event.
How successful was Prime Day 2021? What were the biggest wins and notable losses? Let’s take a look at the trends.
Prime Day’s growth stalled in 2021
While Prime Day typically pulls big numbers—it’s seen a consistent growth rate of 50% or more year over year—this year’s event was just okay. In fact, Prime Day 2021’s growth actually decelerated substantially.
Prime Day 2021 grew a mere 5-10% over last year’s event, with Amazon reportedly hitting $11.9 billion in sales. That number is a relatively small step up from the $10.39 billion Amazon made on Prime Day 2020, which was pushed to October 13th and 14th due to challenges associated with Covid-19.
Last year’s sales numbers give a good idea of just how muted this year’s growth was: Prime Day 2020 saw a more than 45% sales gain from $7.16 billion in 2019. That equates to about a 35% drop in 2021.
Overall, reports indicate a very moderate year for the event, though Amazon reports that Prime members purchased over 250 million items during this year’s event and some categories saw noticeable lift.
Manufacturing remained an issue
One of the biggest challenges Amazon faced as a company last year was meeting consumer demand and supplying enough inventory throughout the initial stages of the Covid-19 pandemic. Global manufacturers have continued to struggle to meet demand in 2021, and not only has that impacted the market as a whole, but it’s a primary reason why Prime Day was less successful than in previous years.
Many brands have struggled to retain enough inventory to put in the hands of customers due to global manufacturing constraints. Currently, it’s very difficult to get inventory out of international ports, which has also contributed to fewer sales. And while some brands got lucky during Prime Day, lack of inventory led to lackluster sales offerings overall.
Timing impacted sales
In spite of last year being a wild and, yes, unprecedented year for manufacturing and ecommerce, Prime Day 2020 was uniquely positioned to capture sales because of its proximity to Black Friday and Cyber Monday. In a twist of events, these sales holidays saw lighter traffic than expected because brands pushed their promotion periods up to compete for holiday shoppers during Prime Week in October. Returning the sales period to the summertime naturally meant distancing it from that holiday traffic, which may have also contributed to lower sales growth.
Even though Prime Day 2021 was mild overall, there were isolated categories that did really well. Baby products and home products had a successful Prime Day, largely because brands had plenty of inventory, as did nutrition, tools, Amazon devices, apparel and housewares, and electronics.
Categories that struggled
In spite of having a decent Prime Day, the tech category in particular had challenges that contributed to lower sales across the entire event.
Tech products have been some of the hardest to get ahold of in 2021 due to manufacturing delays. As a result, many third-party sellers used this year’s Prime Day to discount and clear out older generation product they had available in their warehouses. Older tech products are of little interest to Prime Day shoppers, who have come to expect screaming deals on the latest and greatest during the event. Lacking that opportunity, the event was less successful than it may have been otherwise.
Amazon is prioritizing marketplace sellers
In spite of having a lower than normal growth, Prime Day 2021 marks the second Prime Day event in a row when marketplace sales grew faster than sales of Amazon’s own products. The company has been pushing more small and medium-sized businesses to the front of its Prime Day event, and the proof of its success is in the numbers.
Marketplace sales grew 12% in 2021, while sales of Amazon’s products, including its private label goods, grew only 5.3%. Marketplace Prime Day sales had been on the decline before 2020, as Amazon has historically heavily promoted its own products during the event, but the share of marketplace sales has been growing.
The future of Amazon Prime
The past two Prime Day events have not quite been par for the course for Amazon, and there is still uncertainty about what global manufacturing will look like in 2022, if it will have improved significantly by then, for example, or if it will remain just as constrained as it has been in 2020 and 2021.
The lead up to the holidays will be a good indicator of what next year’s Prime Day may look like, and while this year’s event wasn’t overwhelmingly successful, there is hope that Prime Day will return to more normalcy next year and that there may be more competition on the horizon.
Other brands are looking to compete with Amazon
We’ve known this for awhile, but Prime Day isn’t going anywhere anytime soon. The event has become a massive promotion for Amazon and it’s garnered enough attention to become an established sales holiday akin to Black Friday or Cyber Monday. No longer can brands ignore Prime Day, and no longer are they.
Ecommerce brands like Walmart and Target have already adapted to capture the attention of shoppers during Prime Day, running their own promotions and adding excitement to their online shopping experience to stay competitive. Wise third party sellers are also taking advantage of Prime Day traffic to either drive conversion on their listings or run retargeted ad campaigns to capture sales in the coming months leading up to the holidays. What we may see in the years to come are big brands offering “Prime Day” like promotions at a scale to really give Amazon a run for their money.
The reality is the entire ecommerce ecosystem is a hot place to be during Prime Week, and just like most brands offer sales and excitement during Black Friday to attract customers, most brands are having to do the same during Prime Day to stay competitive and keep up. As the event continues to grow (and hopefully return to normal), the opportunities for brands to expand in this space will grow as well.
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