Insights

PRIME DAY 2022

Emily Weisburg

The Super Bowl of ecommerce is here again. Amazon’s Prime Day 2022 is scheduled for July 12 and 13 across the United States, Canada, and dozens of other countries. Since its inception eight years ago, participation in Prime Week has become table stakes for brands both on and off Amazon.

Prime Day started as a one-day sales event in July 2015 to celebrate Amazon’s 20th anniversary. It was a clever way for Amazon to create a summer shopping occasion at a time of year when online sales had previously slumped. Prime Day has grown every year, including crashing the site in 2018 and featuring a Taylor Swift live stream performance exclusively for Prime members in 2019. Amazon experimented with holding Prime Day in October of 2020 and in June of 2021 but this year marks a return to its original July timeframe.

Our Amazon clients often see five to ten times their usual daily sales during Prime Day. Done right with a combination of promotions and strategic media spend, brands can have a successful Prime Day and accelerate the Amazon flywheel on their hero SKUs into Q3 and beyond.
Return on ad spend (ROAS) does tend to decline around Prime Day as the price of media cost increases due to heavier competition, while average order value (AOV) decreases as a result of promotional pricing.

2021 RECAP

Prime Day 2021 saw consumers purchase over 250 million items worldwide with total customer savings breaking all previous records. Best-selling categories worldwide for Prime Day 2021 included tools, beauty, nutrition, baby care, electronics including Amazon Devices, apparel, and household products. Top-selling products in the U.S. included wireless robot vacuums, protein powder, DNA test kits, and slow cookers.

Over the last several years, Amazon has used Prime Day to highlight their independent third-party sellers, most of which are small- and medium-sized businesses. This year is no exception as Amazon rolled out a small business badge on product detail pages and is running a sweepstakes for shoppers who shop small in the lead up to Prime Day.

AS AMAZON GOES, SO GOES E-RETAIL

Since Prime Day has entered the zeitgeist over the years, many non-Amazon e-tailers large and small participate in the hallmark event. Walmart runs an annual Deals for Days event and Target’s version is called Deal Days, all concurrent with Prime Day dates. Wayfair, Home Depot, eBay, Bed Bath & Beyond, Best Buy, and Chewy also run tentpole promotions during this time. Boutique direct-to-consumer brands are also known to join in. Brooklinen and MeUndies both ran deals on their own .coms last year during Prime Week.

We recommend that all brands participate in Prime Day. The investment in promotions and advertising doesn’t need to be aggressive. We’ve seen modest deals drive success stories over the years and even just promoting via owned media, including your website and social media channels, can produce a sales lift. Just like Cyber Monday, customers have been trained to shop during this time. We see even non-promoted SKUs sell well just as a result of increased website traffic.

Brands that sell across multiple retailers should be thoughtful about their pricing strategy. Amazon and other e-tailers have robust price-scraping technologies that drive competitor matches and brands can lose top buy box placement if they offer a better price on one retailer versus another. We see these channel conflicts often with Walmart and Target versus Amazon.

WHAT TO EXPECT FOR 2022

Concerns over the global economy and inflation are looming in the ramp up to Prime Day this year. The prices of everyday necessities are increasing, and many shoppers will have less disposable income this summer. We may see less impulse buying of big-ticket items like electronics and tools this year. Slightly steeper discounts on these categories are recommended this time around. Shoppers could however be looking to stock up on essentials at a discount including grocery, personal care, and household products. We expect brands offering subscribe- and-save business models to do well.

Supply chain challenges in certain product categories also continue to impact ecommerce. Brands in a good inventory position could have the advantage to inspire brand switching.

Prime Day is back for Canadians this year after a COVID-19-related hiatus in 2021. Amazon has added Prime Day for Poland and Sweden this year and a Prime Day event in India, Saudi Arabia, the United Arab Emirates, and Egypt later this summer.

In addition to their usual push for brands to double down on search and display advertising spend during the lead up and lead out to Prime Day, Amazon Advertising is auctioning off top advertising real estate including homepage takeovers.

Lastly, we’re hearing murmurs that a “Prime Day Part 2” could be happening in October this year to pull forward Black Friday and Cyber Monday shopping behavior. Amazon found success with this strategy in 2020 when Prime Day was delayed to October due to the pandemic and may be looking to test the logic again in Q4 2022.

Whether they’re dipping a toe into the water or diving headfirst into the deep end, we’re excited to support our clients through another Prime Day season and test and learn new strategies to help brands grow their businesses.