After getting rainchecked in July due to concerns about the COVID-19 pandemic, Amazon Prime Day is finally here! The two-day event, which starts on Tuesday October 13th, is looking like it may be the biggest sales event in Amazon’s history,
Here’s what we know about this year’s Prime Day and what we’re predicting will be the shopping event’s biggest hits and biggest flops.
Amazon’s fifth annual Prime Day will run from October 13th to October 14th (Tuesday and Wednesday) and will be held in 19 countries with a focus on supporting small businesses in many markets. Early deals have already gone live ahead of the event. For example, members in the USA and UK received an offer of £10 or $10 credit to spend on Prime Day as an early treat.
This year’s Prime Day event has big footsteps to follow. Last year, over 100 million paid Prime members participated in Prime Day, and over 175 million products were sold in 48 hours, making Prime Day a larger shopping event for Amazon than Black Friday and Cyber Monday combined. Tony Morales, Director of Advertising at Pattern, said Amazon is prepping itself for an event of similar scale this year.
“Amazon’s warehouses are packed to the gills,” Morales said. “Amazon is putting inventory restrictions on a number of sellers. They are positioning themselves to only hold the best, most desirable inventory, and happen to have the most of that.”
Morales anticipates this year’s Prime Day will be the biggest event Amazon’s ever had.
“The fact that Amazon is able to target their inventory to make sure that they’re only keeping in stock the things that they know are going to sell the best means that they’re going to have record sales, record profitability,” Morales said.
There are two main factors that make this year’s Prime Day different but also may help it hit record numbers. The first is that it’s happening at a time of accelerated demand in the ecommerce space, demand that you’ll recall caught Amazon off guard back in April and May and led to massive delays in shipping and product shortages.
“Amazon was expecting growth, but was not expecting growth at the pace that we have it because of all of the retail shutdowns,” Morales said.
More consumers than ever are purchasing products online and from the comforts of home due to the pandemic. They’re also spending more money and expanding the item set that they would regularly buy online, purchasing groceries and merchandise in the same basket, for example. This bodes really well for Prime Day sales and for prepared brands taking advantage of the amount of people who will be shopping online to push their own sales during the two-day event.
The second factor that gives Amazon a unique advantage over its competitors in all markets this year is the fact that the event has been pushed so close to Black Friday and Cyber Monday sales events. They’re six weeks apart.
According to Morales, Prime Day has had consistent but varying degrees of success for Amazon—in 2015, it was the biggest event Amazon had ever had, but in 2016, it was outpaced by Black Friday. Morales predicts that because these two events are so close this year, many consumers may begin their holiday shopping during Prime Day rather than waiting until next month.
“Because they’re close, we may see a more even matchup or maybe Black Friday doesn’t do as well as Prime Day, but we’ll know when we get there,” Morales said. “Given that these things are so close together, my guess is we’re going to have amplified traffic from mid-October through Christmas.”
Amazon is offering added incentive for consumers to do their holiday shopping during Prime Day with its extended returns window. Typically, Amazon’s holiday returns period runs from November 1st until after Christmas to give customers time to return products bought as gifts. This year, that returns period began on October 1st, making the idea of snagging a great deal on an early Christmas present extra appealing to shoppers.
Torsten Schaefer, Pattern’s new Country Manager for Germany, says that while competing retailers and marketplaces may try to match Prime offers, they will have a limited opportunity unless they are prepared to go out of stock on products just before peak. That puts Amazon in a unique position to pull big numbers.
The products expected to do especially well this Prime Day are big ticket items that customers are saving up for and waiting for a deal on. Apple watches, for example, are anticipated to be one of the biggest winners on Prime Day. TVs, iPads, Alexas, and Kindles will also do really well.
The consumer electronics, home and kitchen, and computer categories are expected to make the biggest wins on the platform, and when it comes to brands, Amazon’s private label brands, (like AmazonBasics), Apple, Samsung, and Under Armour are also anticipated to do really well.
Morales said he thinks PPE is another category that, due to the unique circumstances of COVID-19, will do really well this Prime Day, as consumers are still stocking up on masks and protective products during lockdown.
“I wouldn’t be surprised if people were putting wipes and hand sanitizers as stocking stuffers this year,” Morales said.
The categories expected to do the worst this Prime Day are movies and TV, with shows and movies doing especially poorly. Apps & games and automotive products are also showing low numbers.
Consumers have less discretionary and luxury income to work with due to the effects of the pandemic, and it’s expected that luxury goods will continue to hit lower numbers during Prime Day. Consumer search behavior has experienced major changes since COVID; read more on that here.
Examples of other subcategories that aren’t expected to do well this Prime Day are:
Prime Day 2020 is expected to do really well on a global scale. Schaefer, like Morales, believes Prime Day will be a success this year because customers have been waiting with anticipation for its announcement.
"Extra spending is possible as there have not been many deal events, and sales in offline channels are limited due to COVID-19. People have been told that Prime Day would not be cancelled, and there is also a three percentage point reduction in VAT until the end of the year in Germany," he said.
Pattern's General Manager for Australia, Merline McGregor, likewise believes that, although it’s been announced on such short notice, Amazon Prime Day 2020 is a welcome event for Australia's retail calendar: "With the state of Victoria still in lockdown, retailers and brands are seeking alternative channels to market."
Prime Day is happening right before Australia’s second Click Frenzy sales event of the year (the first was held in May), and it’s expected to sate pent up consumer demand for a sales holiday in that market as well.
Need help with your Amazon strategy or increasing your sales on online channels? Contact us using the form below to learn how Pattern helps brands accelerate ecommerce growth and control on online marketplaces!
If you’re interested in expanding your brand internationally, you’re probably familiar with Tmall. Tmall is Asia-Pacific’s (APAC) largest marketplace, and indisputably the biggest ecommerce powerhouse in the world. It represents a huge opportunity for many brands, but entering the space is also a big challenge to take on.
At Pattern, we recommend brands looking to enter international markets should first focus on dialing in their domestic presence. Once you’re satisfied that your brand is well-represented and optimized locally, you’re ready to think about tackling new regions, like APAC, and launching on marketplaces like Tmall. Our top advice for entering Tmall is to understand and strategize around its three most important metrics: service, delivery, and content.
Service, delivery, and content ratings are the three elements that make up Tmall’s Detailed Seller Rating (DSR) score. Each component is scored on a scale of 1-5 that is displayed publicly on your brand’s Tmall flagship store page. This is meant to help consumers decide whether or not to purchase your products.
DSR scores are important because they’re highly influential in driving conversions—customers see DSRs as a way to quickly understand if a brand is trustworthy and worth buying from. They also matter quite a bit to Tmall itself—they monitor these scores and will take action to close flagship stores with low scores.
Let’s go over each element of the DSR score and some steps you’ll need to take to achieve high ratings.
Service is a huge ecommerce component in APAC marketplaces. In most other regions, product listings are static, and consumers use content and reviews to make a decision about what to purchase. On Tmall, consumers want to interact with your brand and test its validity before buying—each transaction takes at least one human interaction to convert.
So, to get a great service rating, you’ll need to have a large, established customer service team dedicated to Tmall sales that can offer real, human touchpoints and very fast response times. To get an idea of the speed your agents should be capable of producing, in our Tmall benchmarking exercise, 92.5% of brands’ customer service agents replied to queries via live chat within 30 seconds, 5% replied within one minute and the remaining 2.5% of brands took longer than a minute. So, look for a Trade Partner (TP) that has enough resources to compete with those numbers, support your sales, and maintain a good DSR score.
Another thing you’ll really want to focus on is a high-quality delivery experience for consumers. As in other regions around the world, Tmall consumers have high expectations for their delivery experience. In our Chinese consumer polling report that targeted consumers buying from Tmall Global, we found that 6% expected same-day delivery, 15% expected next-day delivery, and 46% expected 2-5 day delivery.They want to receive their products fast and they want the products to be undamaged and pristine upon arrival.
So, to achieve a high score for your delivery capabilities, we highly recommend partnering with a TP or ecommerce accelerator like Pattern (which serves as a TP) who has the ability to facilitate your distribution. Make sure your TP has the right infrastructure in place to support high-quality logistics experiences for all of your consumers—they should have an established, well-oiled delivery process in place and the capability to fluidly add you to their current fulfillment system.
As in every digital marketplace, content is a huge component of the decision-making process for consumers on Tmall—they can’t touch your product with their hands or see it in person before buying, so it’s important they’re empowered to make a good decision on whether or not to purchase based on the videos, images, and copy.
The goal is to make all of the content and relevant information on your flagship site easily-accessible—consumers should be able to visit your page and make a decision about whether or not to buy without navigating to a new site/page and taking their conversions with them. Images with text and extensive product details are a great way to do this, as well as making sure your service team can speak to all aspects of your product with any consumers (via text or chat).
As the world’s foremost brand partner for ecommerce acceleration, Pattern truly understands the significance of international expansion. With regional offices around the world, Pattern knows how to successfully launch and grow brands on Tmall and other marketplaces, with the data, insights, and marketplace intelligence to build the metrics that matter.
It’s important to have a fantastic brand presence, a knowledgeable guide, and a clear go-forward strategy for your best chance at success. With our in-country resources, expert teams, and extensive experience in growing brands around the globe, Pattern can help you get there.
Set up a call to get your international expansion strategy in motion.