It’s quite an accomplishment to take a fictional shopping “vacation” from zero to $ 11 billion in six years.
But that’s exactly what Amazon did this week in a two-day online shopping frenzy that generated more sales than record-breaking Black Friday in 2020 ($ 9 billion) or Cyber Monday ($ 10.8 billion) .
Launched in 2015 to mark the company’s 20th anniversary, Amazon Prime Day currently offers its 200 million Prime subscribers insider deals that pay $ 119 per year for memberships that include one-day shipping, access to streaming content Discounts on Prime Video and Amazon’s own include Whole Foods grocery stores and other perks.
Widespread home isolation under COVID-19 restrictions has helped bring 50 million new Prime subscribers to Jeff Bezos, founded in 1994 from its Seattle garage, since last January. And while not all of Amazon’s $ 11 billion in online shopping revenue (and the company is notoriously reluctant to post its own sales figures), analysts on the Adobe Digital Economy Index team reported that the 5, $ 6 billion spent on Monday along with $ 5.4 billion on Tuesday, Prime Day 2021 growth for all retailers exceeded $ 10.4 billion last year .
Within this year’s Prime Day sales volume, some Amazon competitors saw big leaps from last year, with Adobe seeing large retailers (over $ 1 billion in annual online sales) up 29% from 2020 and small retailers (less than $ 10 million). Dollars in annual online sales). get a 21% increase.
This “halo effect,” with other retailers working to siphon off some of the millions of shoppers Prime Day draws to the Amazon site, continues to pick up pace in a year that industry watchers said it will characterized by less dramatic sales prices and tactics than previous iterations.
“US retailers continued to benefit from the strong buying momentum on Prime Day two, catapulting total online spending to $ 11 billion on both days,” said Taylor Schreiner, director of Adobe Digital Insights, in a statement. “This is despite relatively small discounts in most categories, suggesting that demand for online shopping has pent up as consumers look forward to a return to normal.”
Himanshu Mishra, researcher and professor of marketing at the University of Utah’s David Eccles School of Business, said Amazon’s success in developing a sense of mild panic among shoppers helped the e-commerce giant get Prime Day back to its current level bring to.
“One of the main reasons Amazon’s success on Prime Day is its ability to create a sense of scarcity,” Mishra said. “Offers may or may not be outstanding, but they invariably disappear quickly. So use the fear of missing out on something. “
Mishra also believes that while Prime Day’s halo effect may be a short-term boon for some retailers, the biggest winner is Amazon.
“It will increase sales for retailers working with Amazon, but it is unlikely to translate into big profits for Amazon’s competitor,” Mishra said. “As in the past few years, it will only result in a bigger market share for Amazon.”
Data from marketing analytics website eMarketer shows that Amazon is on track to grow its share of total U.S. online retail business from 39.8% in 2020 to 40.4% in 2021. And while that 0.6% may seem tiny, it represents billions in new revenue and is projected to be the biggest profit for any retailer in the year ahead.
BYU’s marketing professor Jeff Larson said he wasn’t surprised by Amazon’s success in building a fake shopping vacation, pointing out the company’s high focus on three key tenets: building a large group of repeat customers, making transactions as easy and painless as possible possible and effective sharing knowledge about products and discounts with this target group.
“Amazon has clearly amassed tremendous power,” said Larson. “And that’s because whoever controls the end user, the consumer, controls the market.”
The methods and strategies Amazon has used to build that dominance are increasingly being scrutinized as federal lawsuits and several federal legislative proposals aimed at limiting the power of the big U.S. tech companies continue to advance.
But while Democratic and Republican officials have found some bipartisan moments in their joint criticism of alleged anti-competitive practices by US big tech companies, the behavior in question has not diminished consumer interest in their products.
In an opinion piece for The Hill, Joshua Brown, industry commentator and CEO of Ritholtz Wealth Management, wrote that lawmakers linked the behavior of companies like Amazon, Apple, Facebook and Google to the abuse of market power by industrial robber barons of the early 20s such as Andrew Carnegie and John D. Rockefellers are just wrong.
“The monopolies of bygone eras in American history drew the ire of antitrust advocates because, once they reached a certain size in their industries, they became abusive towards everyday consumers faced with limited choices,” Brown wrote .
“The difficult thing about the supposed monopolists of today is that they have actually used their size to do the opposite. Consumers have not hurt with Amazon’s dominance in e-commerce, they actually love it. “
