Prime Day is more than the biggest “holiday” sale in the soft summer season; it’s a chance for brands to collect information that will help supercharge their all-important Q4 strategy.
We’ve studied the numbers from our client accounts and from the greater eCommerce industry (thanks to an illuminating report from our Amazon partner Levanta), and synthesized some insights for brands to leverage over the next few months – which will likely include a Prime Day-esque October event from Amazon as well as the usual Q4 craziness.
by Sydney Garofolo
Our main takeaways:
- Customers crave deals.
While values like eco-friendliness and sustainability are important, the dominant factors for consumers this Prime Day was clear: deals. Whether that’s due to inflation or economic uncertainty or both, consumers – and for the record, 88% of Prime members participated in Prime Day sales – were far more likely to purchase products on sale. Given that neither inflation nor economic instability is bound to resolve in the next few months, we expect the propensity for consumers to jump on good deals to stay high through the end of the year.
- Day 1 is key.
Nearly every one of our clients participating in Prime Day got better performance on the first day of the two-day sale. Our data illustrates the importance of being prepared and ready to hit the ground running the minute Prime Day (or, say, a big holiday weekend sale) starts.
- Affiliate + Prime Day = bonanza.
There’s been a huge surge of interest across our client portfolio this year in combining affiliate outreach with Amazon listings. Prime Day was the perfect storm: we worked in tandem with Levanta to help our affiliate clients achieve a 677% increase in revenue compared to the prior weekend and a 680% revenue increase over a comparable period in June.
This didn’t happen solely because of smart discounts. Our brands were featured in dozens of placements spotlighting Prime Day’s best deals and products by the likes of top [1] [2] content partners including Vogue, E! Online, CNet, HuffPo, NBC Select, and Cosmo. Publishers love to leverage audience interest in the Prime Day phenomenon just as they do the Q4 shopping surge, and brands that introduce publishers to offers their readership will love can get tons of third-party referral traffic to their Amazon listings.
- Tricks won’t work.
Ever heard of the old retail practice of inflating MSRP and then offering “steeper” discounts to give the impression of a steal? So have savvy shoppers and influencers, and they’re starting to call out examples when they see them.
The reputation hit your brand might take for stunts like that isn’t worth an adrenaline rush of extra short-term revenue. If you’re looking for ways to compete on discounts, consider strategies to increase customer LTV beyond the Prime Day or Cyber Monday sale, which might make temporarily smaller margins easier to swallow.
- Competition is building.
Prime Day has established itself as enough of a shopping holiday that it’s producing a halo effect; though their conversion rates didn’t change during the sale, many of our DTC brands saw an increase in site traffic during Prime Day.
What we’re recommending those DTC brands do going forward is mimic some of Amazon’s competitors, including Walmart, Target, and Shein, who pushed their back-to-school category sales live ahead of Prime Day. As an industry, we’re already seeing that increased competition is forcing the holiday clock to start earlier every year, and you can expect this trend to continue in Q4 as well.
A bonus tip: SMS, email, and social media are already getting saturated as the election cycle heats up, which means competing for attention and real estate will be tougher and costlier than non-election Q4 seasons for brands relying on those channels. Amazon and its retail competitors won’t have that extra layer of saturation; Q4 of 2024 will carry the same conditions as non-election years. That’s not to say competition won’t be fierce, but brands looking to step away from the election fray may have reason to double down on their Amazon strategy.
One of the last things we learned from Prime Day: it’s better to start planning as early as possible. For one thing, affiliate outreach and relationship-building can take a while to bear fruit; for another, customers will often wait until Q4 discounts to jump on products they discovered earlier in the year, so awareness built now will keep your products top of mind for conversion season.
Sydney Garofolo is Associate Director of Client Growth & Development at DMi Partners. Before she joined DMi in 2019, Sydney held positions at Carat USA, Gen3 Marketing, CAVA, and Jessica Scott Marketing & Events. A proud Pennsylvanian, Sydney graduated from Temple University with a Bachelor of Arts in Strategic Communications.
Photo by BoliviaInteligente on Unsplash