Dive Brief:
- Amazon has been promoting deals and savings for its Prime members ahead of Prime Day, an annual event used to promote Amazon's Prime membership program, on Tuesday, July 12.
- Last year's Prime Day was the biggest online shopping day of the summer, according to Market Track and Qualtrics, with about 30% of US internet users participating in the sale.
- eMarketer expects this year's Prime Day to beat out last year's, with UBS estimating that membership in Amazon Prime will grow from 50.8 million in 2015 to 67.7 million in 2016.
Dive Insight:
Prime Day is clear illustration of the power and value of e-commerce, and the Amazon brand. Prime Day, which runs tomorrow, is Amazon's way of promoting its service and bringing new members into its Prime program. Amazon loves Prime customers, who have now become nearly half of its U.S. customer base, because they spend $1,200 on the e-commerce site each year on average, while non-Prime customers spend $700.
While Amazon is pretty secretive with exact Prime membership figures, Amazon gained "hundreds of thousands" of new members last year. Around 30% of internet users participated in last year’s Prime Day, but more importantly for Amazon, 10% of that group signed up for the premium Amazon Prime service that day in order to take advantage of those deals. Those new members should help Amazon boost its Prime Day numbers from last year, when it set a single-day record for online shopping during the summer.
Amazon says it will be offering twice as many deals as last year, with some 100,000 deals across nearly all product categories. It’s not clear whether that will mitigate or exacerbate complaints from last year that Prime Day is pretty much a big rummage sale, with “blockbuster” deals on run-of-the-mill items like socks and phone cords that in reality were only a dollar or two off the original price.
But with truly blockbuster discounts (like a recent $200 discount on a hoverboard) that are more akin to Black Friday deals, Amazon may be able to persuade people that its now-annual summertime event really is something to celebrate, while demonstrating its huge merchandise assortment to newer Prime members, especially those on a trial.
“I see a lot of reports have come out saying that people haven’t got the deals they expected,” marketing expert Shmuli Goldberg told our sister site Retail Dive last year. “But look at the amount of deals on Prime Day, in every single category. This wasn’t just Black Friday, with deals at the high end — televisions, mobile phones. The deals were spread through the whole range. And I believe that the reason Prime Day was what it was is that once Amazon gets a customer in, they’re a customer for life.”