Jul 17, 2019 6 min read
Prime Day 2019: Initial Insights
Updated: July 20
Though described by Amazon as a "two-day parade of epic deals," it's clear that the retail and tech giant wanted to position Prime Day 2019 as not just a sale but a party – one that you wouldn't want to miss, complete with a live concert headlined by Taylor Swift, an exclusive brand launch from Lady Gaga, and a new level of interactivity from both Amazon and brands.
Prime Day 2019 began at 12am July 15th and, as predicted, lasted a full 48 hours for the first time (although not without kinks – for a second year in a row, customers reported a glitch on Monday, unable to add items to their cart for two hours). Now that the party is over, we're pulling and analyzing all of our data to identify how trends have evolved compared to previous years, with the goal of creating the ultimate Prime Day report for agencies and brands selling on Amazon. In the meantime, we'd like to share some initial insights and impressions based on what we saw go down during Prime Day 2019 and our insider perspective on what this means for Amazon advertisers, vendors and sellers.
By selecting Amazon to launch her global cosmetic brand Haus, Lady Gaga is capitalizing on the huge amount of traffic generated by Prime Day to boost awareness and drive presales for the brand, which will be released in mid-September. It's a big statement for Lady Gaga to choose Amazon over traditional cosmetics channels, but it's also a big statement from Amazon. The retailer has struggled to get traditional luxury beauty brands on the platform, but this has opened the vault to emerging and new brands to take the lead (prestige beauty brands not selling direct on Amazon may regret this later). And it was a huge success: Haus snatched up six bestseller slots, including #1, for products that won't be shipped until September, and with no promotional offer!
There is every indication that Lady Gaga made the right choice by partnering with Amazon. The fact that the presale will enable Haus and Amazon to accurately project demand ahead of the official release and build out detail pages with Q&As and reviews means that Haus will be able to launch with a pre-built flywheel, a huge advantage for maintaining long-term organic traffic.
This was far from the only example of Amazon leveraging celebrities this Prime Day to drive more traffic and awareness. The second annual Prime Day Concert was headlined by Taylor Swift, complete with exclusive tie-in products (the Taylor Swift Lover Bundles). Exclusive products from JoJo Siwa were also made available during the event. These partnerships help to position Prime Day as more than just a sale but an event that people wouldn't want to miss out on.
Several striking characteristics of Prime Day 2019 have one thing in common: they limit price matching. The focus on exclusive celebrity tie-in products is part of this strategy since they are, by definition, not available at any other retailer and therefore cannot be price matched. But Amazon exclusives extend far beyond just celebrities, including bestsellers from major brands like Crayola and 3M.
To that end, Amazon also reduced their pricing visibility in 2019. Rather than listing the deal price outright, Amazon listed some products at full produce with a label that reads "Prime Day deal - You save an additional x% on this item at checkout," only applying the coupon during the checkout process. This not only stops competitive price matching algorithms from identifying the correct price, but also makes it more difficult for shoppers to compare prices on the fly.
Competitive retailers also tried to reduce price matching to combat Prime Day. For example, the same product that listed for $17.99 on Target was listed for $20.69 on Amazon, but Target's ultimate price was actually $23.98 after shipping, which was not transparent until after you added to cart. On top of that, Target offered a $10 gift card with same day order services – so how do you decide which retailer is offering the better deal?
Price transparency is crucial to providing a positive customer experience and the relative lack of transparency during Prime Day 2019 was a major inspiration for this critical piece from CNET's Scott Stein: I'm pretty frustrated with Prime Day. Have Amazon and Target become so focused on competing with each other that they have let the customer experience suffer just to combat price matching?
Alternatively, instead of focusing on competition some retailers took the 'if you can't beat them, join them' approach. Chico's made their house apparel line available on Amazon with an "Up to 50% off" Prime Day deal, while other major retailers like Lowe's and Safeway benefitted from Prime Day traffic by selling gift cards for their own stores.
Despite some confusing pricing tactics, Amazon is still focused on improving the customer experience. In the past, Prime Day has received criticism for how hard it was to sort through so many deals, so this year Amazon focused on improving the experience by encouraging deeper discounts on hero SKUs and reducing the number of '% off of a broad assortment' deals.
We are still collecting data on promotions and paid search, but our initial insights are that brands spent more on branded and competitor keywords in 2019, but with mixed results. Big brands like P&G again invested in expensive home page advertising to drive shoppers, with a focus on bundles to increase the average selling price and basket size.
This year, several CPG brands moved away from one-time coupons and focused instead on driving Subscribe & Save, offering a discount on the customer’s first order. This strategy allows them to offer a deeper discount on the first subscription order, offsetting the initial loss with the great customer lifetime value (CLV) of a subscriber. The wisdom of this strategy is yet to be determined, however, since search data suggests that more people than ever are taking advantage of Prime's 30-day free trial to cash in on the deals and then cancel their membership before ever having to pay. There's nothing stopping shoppers from using the same tactic for Subscribe & Save deals, so the efficacy of the deal will depend on the retention rate.
Amazon brought back “Amazon Live” this year with force. A QVC-like experience used live video product demonstrations to tout product benefits and feature deals with prominent placement. Amazon has effectively built up Prime Day's reputation for being 'fun' and brands that took this to heart by leveraging the interactivity of live videos saw their top performers on the Today's Deals page gain a lot of ground in organic search placement for category keywords. New to the videos this year were product bubbles denoting purchases, similar to Facebook live animation reactions, but many found these confusing and distracting.
The first Prime Day was held in 2015 to celebrate the 20th anniversary of Amazon.com. Since then, the event has been a major part of the cult success of several now ubiquitous products, including the Instant Pot, iRobot Roomba, LifeStraw and FitBit. This year these products are still going strong, along with other 'classics' like vacuums, noise-cancelling headphones and video game consoles. However the biggest winner was, unsurprisingly, Amazon itself.
Even more than previous years, when the Amazon Echo consistently topped the list as Prime Day's bestselling product, Amazon's own devices were front and center. Not only were their historical products – Kindle, Fire Stick, Smart Plug – performing very well with attractive discounts and strong advertising, but Amazon also really pushed their newer acquisitions – Ring video doorbell, Eero home wifi system, Blink security cameras, etc. Amazon also used one of its busiest events to encourage more repeat shoppers by offering a $5 credit on a $25 Amazon gift card, a sure sign that the retailer sees Prime Day as an opportunity to keep driving revenue well beyond the event itself.
We are gathering more data on Prime Day 2019 every hour and will be pulling more insights throughout the week. Bookmark this link so that you can be the first to see the latest updates and proprietary data that can help agencies and brands position themselves for success on Amazon.