It’s that time again. The biggest online shopping day of the year – yes, even bigger than Black Friday.
Amazon will be hosting its third annual Prime Day on Tuesday, a sales event exclusively for Amazon Prime subscribers. For thirty hours, you can find deals and deep discounts on a wide array of items -- everything from televisions to crock pots, Alexa devices to chess boards. The online retail juggernaut is looking to ape its previous success: on Prime Day 2016, U.S. sales orders surged 50%.
Thanks to Amazon, July has rivaled that of November as one of the largest shopping months of the year. And the promotions are seeping into other parts of the market as consumers are finding savings elsewhere. In other words, you will notice the likes of Dell and Target get in on the fun this week.
With Prime Day generating substantial buzz, rival retailers are attempting to steal some of that glory. Instead of sitting on the sidelines as they have done over the last two years, businesses are trying to capitalize on the spike in online shopping traffic, says PwC's Consumer Markets lead Steve Barr:
We are seeing other big box retailers use Prime Day as an opportunity to capture shoppers' appetite for deals and as way to compete against Amazon for share of wallet and mindset.
But the only way they will draw attention away from Amazon is through great deals. July is becoming equivalent to November with month-long discounts to entice shoppers.
Consumer research firm Bazaarvoice noted that 76% of Prime Day customers also pay a visit to other major online stores, whether it’s to compare prices, peruse reviews or find out product ratings. The research organization discovered that Wal-Mart, Best Buy, Target, Home Depot and Lowe’s generate the most clicks for online shoppers next to Amazon on this day.
This is their chance to nab those customers at the same time with lower prices, and they’re going to take advantage of the additional hits.
CNBC reported that Target will feature back-to-school sales in-store and online for the next week. Dell will launch “Black Friday in July” doorbusters during the week of Prime Day. J.C. Penney is hosting its “Penney Palooza” online again this year after experiencing a 13% jump in visitors in 2016. Toys R Us is offering its customers a 20% discount on website purchases. Ditto for Kohls. Surprisingly, Wal-Mart is refraining from establishing a July online sales bonanza.
Ostensibly, retailers are being frightened into extending discounts to shoppers as research from EDITED has found that the average discount is 39.9%.
Neil Saunders, a retail analyst for the business data firm GlobalData, told USA Today that eventually all of the major retailers will no longer hold back in July because consumers now expect summer savings.
Some people have chosen to get in on the action because they fear missing out on market share. For others, (Amazon Prime Day) is less of a threat because they tend to be flexible with deals and discounts anyway.
Although Amazon is the entity being attributed as the leading pioneer in one-day sales, Chinese e-commerce behemoth Alibaba is the one to introduce the pre-Black Friday concept. Alibaba has held its annual $18 billion Singles Day on Nov. 11 for the last six years, offering customers tremendous savings. It has even produced the same pattern: JD.com, Zara, and Neiman Marcus held massive sales that same day.
In recent years, the public has been inundated with doom and gloom prognostications that the e-commerce goliaths known as Amazon and Alibaba will destroy their competitors, leaving everyone worse off because of monopolistic tendencies (there is never a monopoly in an actual free market system). However, this is simply untrue – every party involved, particularly the consumer, is benefiting from good old-fashioned marketplace competition.
Amazon has seen a massive increase in sales and Prime memberships because it satisfies the customer with deals. To get a slice of that pie, other retailers are embracing Prime Day by presenting their own customers with savings on power tools, skirts, and mobile phone stands.
Joseph Schumpeter, an Austrian economist and Finance Minister of Austria in 1919, coined the phrase “creative destruction.” Later, the term evolved into “market disruption.” The expression is archaic as Amazon Prime Day proves that we’re living in an era of “better market coordination.”
No matter what you think of Jeff Bezos, he is an entrepreneur who can satisfy the desires of the consumer. Now if he would stop being a tech crony then we’d all be a bit better off.
