One of the biggest shopping days of the year is just around the corner, Amazon Prime Day. Promoting exclusive offers to Prime members, Prime Day was started only three short years ago, but it is widely considered a brilliant coup by Amazon. Last year, the event generated an estimated $1 billion in sales, according to Cowen & Co. and JPMorgan Chase, and Amazon said it added “tens of millions” of Prime members to the platform overnight. What’s more, other brands and retailers experienced sales gains during the Prime Day, especially those that have learned to time their promotional activity to coincide with the event.
While it’s likely Prime Day will generate even greater results this year, Prime Day is more than just a huge sale. It also serves as an indicator of the state of the retail industry today and a predictor of retail developments to come.
Retailers invent sales holidays. The huge success of Prime Day has inspired other retailers to create their own “holidays.” For example, Wayfair, the homegoods e-tailer, launched Way Day on April 25th of this year, and Alibaba, the Chinese conglomerate, has transformed Singles’ Day from a cheeky national holiday in China for those who want to celebrate being single into a tent pole event to promote retailer discounts on its e-commerce platforms.
Retail has always been dependent upon promotional days, but retailers are no longer relying only on established industry-wide sale days like Black Friday. Following Amazon’s lead, retailers have found that taking a proactive, exclusive approach and hosting a sales promotion day is an effective way not only to drive more traffic but also to differentiate their brands. In fact, Alibaba has made Singles’ Day a brand spectacle, hosting a televised gala in Shanghai featuring stars including Nicole Kidman and Pharrell Williams to kick it off, introducing augmented reality games that promote usage of the company’s Taobao mobile app, and highlighting Alibaba’s new retail technologies in “smart stores” and online-offline integrations.
Given that such events have the potential to lift sales and raise brand awareness in traditionally slow retail seasons, we’ll likely see even more retailers jump on the invent-your-own holiday bandwagon.
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