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2019 Prime Day PredictionsLook back, look ahead2PRIME DAY PREDICTIONSNow in its 5th year, Prime Day is one of the most successful “manufactured” shopping holidays in history, perfectly situated in the halfway spot of the year ahead of Black Friday. With each passing year, the anticipation and hype surrounding Prime Day gets bigger and bigger. Prime Day 2018 was Amazons biggest yet. The eCommerce giant welcomed more new Prime members on July 16, 2018 than any previous day in its history. Worldwide, Prime members purchased more than 100 million products.To get a read on this years Prime Day, Profitero surveyed 1,000 Prime members each in the U.S. and U.K. in May 2019 to get insight into this years event. Couple this with our 2018 analysis, and we reveal 7 predictions for Prime Day 2019.Introduction1. Shoppers will spend more than ever this Prime Day2. Retail competitors will try to steal the thunder (again) 3. Prime Day will be a bonanza for every category, from gadgets to grocery4. Brands will not have to break the bank to see big returns5. Staying in stock will make or break brands6. Small brands will come up on top7. Brands that invest in Prime Day will see long-lasting benefits3PRIME DAY PREDICTIONS1. Shoppers will spend more than ever this Prime DayAfter five years of hype, one might expect interest in Prime Day to be waning, but rather it seems to be having a snowball effect, pulling in more shoppers every year. The reason? Prime members believe that Prime Day deals are good value. Our survey reveals that 62% of U.S. and half of U.K. Prime members agree that Prime Day deals live up to the hype.76% of U.S. Prime members appear ready to grab a Prime Day bargain this year, up from 63% who shopped last year. The global appeal of Prime Day seems to be expanding too. The percentage of U.K. Prime members shopping on Amazon during Prime Day is set to jump from 52% in 2018 to 67% this year.Shoppers are set to fork out more money too. More than half of Prime members who bought something on Amazon last Prime Day (56% U.S., 53% U.K.) expect to spend more this year.% of Prime members shopping Amazon on Prime DaySource: Profitero consumer survey of Prime members, May 2019; n = 1,000 for each marketQ: As a Prime member, did you shop on Amazon during its Prime Day promotion in 2018? Q: Do you plan on shopping on Amazon during Prime Day this year? (In July 2019)2018 2019U.S.U.K.52%63%67%76%4PRIME DAY PREDICTIONS1. Shoppers will spend more than ever this Prime Day (continued)For brands taking part in Prime Day promotions, this is great news as their investments should yield higher returns from the increased anticipation and shopper traffic. For context, heres the average sales lift brands that participated in last years event saw. One can only expect higher sales lifts this year. Even brands not officially participating in promotions should see a nice traffic and sales bump especially those leveraging services, like Amazon Advertising, to get products to the top of page 1 search results for high-traffic keywords, or brands that have captured Amazon Choice or Best Seller badges for their products. (See more on the halo effect of Prime Day later.)Brands that participated in Prime Day 2018 saw an average 3-4X sales liftSource: Profitero; 2018 Prime Day sales lift vs average daily sales, Amazon; Time period: July 9 - July 24, 2018; Number of products: 1,628-50%0%50%100%150%200%250%350%300%7/9 7/157/137/117/10 7/16 7/18 7/20 7/21 7/23 7/247/227/197/147/12 7/17Sales change (%)Prime Day sneak peek week-27%-22%-17%-21% -23%-29%24%210%321%56%40%10%4%7%-3%2%vs all products U.S. sales lift = 143%vs all products U.S. sales lift = 182%5PRIME DAY PREDICTIONS2. Retail competitors will try to steal the thunder (again)Last year, a host of competitors got a big payday piggy-backing off Amazons Prime Day with their own sales and promotions. According to Adobe Analytics, large U.S. retailers ( $1B in annual revenue) saw sales jump +54% on Prime Day last year compared with an average Tuesday. This year, expect retailers to vie for an ever-growing piece of the Prime Day pie. Of Prime members planning to shop on Prime Day, nearly all intend to shop on Amazon (98% U.S., 93% U.K.), while more than a third (34% U.S., 38% U.K.) intend to shop for deals at other online retailers as well, according to our survey. Dont count out brick and mortar either: 17% of U.S. and 12% of U.K. Prime members planning to shop on Prime Day will look for deals in physical stores.As a brand, you have to anticipate “shop around behavior” in two ways: a) Its possible your competitors may forsake promoting on Amazon and make a strategic bet on Walmart, or some other retailer. Watch this activity closely and see if you can learn from it, or counteract it through strategically sponsored advertising; b) For any products you are building buzz around or promoting during Prime Day, expect that shoppers will research other retailers to see if theres a better deal. Prime Day 2018: A boon to retailers beyond AmazonMore than half of Prime Day members (58% U.S., 59% U.K.) compare prices on other sites first before buying a Prime Day deal on Amazon, according to our survey. This underscores the value of having consistent content and strong reviews for your hero products across all retailer sites, not just Amazon, as well as the importance of making sure inventory levels are set to handle increased demand for products on all top retailers.6PRIME DAY PREDICTIONS3. Prime Day will be a bonanza for every category, from gadgets to groceryNot surprisingly, electronics was the clear winner during Prime Day 2018: in the U.K., Amazon sales spiked 298% compared with an “average” sales day; U.S. sales were up 215%. We anticipate electronics will again be a best-seller, with almost three-quarters of those intending to shop on Prime Day (71% U.S., 72% U.K.) planning to shop for gadgets.But watch for other categories increasingly benefiting from the Prime Day effect. We predict grocery sales will be bigger this year than last, as almost 1 in 4 Prime members in the U.S. (24%) and 1 in 5 in the U.K. (18%) shopping during Prime Day look to make a grocery purchase on Amazon. Expect Amazon to extend more Prime Day deals inside Whole Foods stores too like it did last year. Our survey reveals that half of Prime members (56% U.S., 50% U.K.) are likely to try a product they dont normally buy if offered a Prime Day discount. So, for food and beverage brands in particular, Prime Day is a great time to introduce new products not only because of the extra awareness and traffic, but because its a great way to ramp up trial, and ultimately increase your number of reviews, which are heavily weighted in Amazons search algorithm.Types of products Prime members are most likely to shop during Prime Day 2019Source: Profitero consumer survey of Prime members, May 2019; n = 1,000 for each marketNote: Base = those planning to shop on Amazon on Prime DayElectronicsToys 2018 Prime Day sales lift vs average daily sales, Amazon; Time period: July 9 - July 24, 2018; Number of products: 1,628No need to break the bank or margins to playBig deals can have a huge payday8PRIME DAY PREDICTIONS5. Staying in stock will make or break brandsRegardless of whether or not you plan to run a Prime Day promotion, inventory planning and product availability on Amazon will be critical. About half of Prime members (55% U.S., 46% U.K.) surveyed by Profitero agree they usually make an unplanned purchase on Prime Day, so anticipate some unexpected demand spikes. Its smart to get your stock levels in order now, or plan an inventory backstop, because out of stock means out of luck for both shoppers and brands.Take this example of infant formula Similac Alimentum. The product wasnt promoted or reduced in price during Prime Day 2018, however it got swept up in the Prime Day hype and benefited from an increase in sales on Amazon. This unplanned demand resulted in the product going out of stock on July 17 and was unavailable for three days. Based on Similacs average daily sales for Alimentum, we estimate that the product lost $20,000 in sales just by being out of stock during this period.Source: Profitero; Time period: July 8 - July 24, 2018Date AvailabilityJuly 8, 2018July 9, 2018July 10, 2018July 11, 2018July 12, 2018July 13, 2018July 14, 2018July 15, 2018July 16, 2018July 17, 2018July 18, 2018July 19, 2018July 20, 2018July 21, 2018July 22, 2018July 23, 2018July 24, 2018In stockIn stockIn stockIn stockIn stockIn stockIn stockIn stockIn stockOut of stockOut of stockOut of stockIn stockIn stockIn stockIn stockIn stockEstimated sales loss due to OOS:$20,0009PRIME DAY PREDICTIONS6. Small brands will come up on topPrime Day is an opportunity for small brands to shine (and even outperform larger competitors) on Amazon. Last year, Amazon announced that small and medium-sized businesses worldwide exceeded more than $1 billion in sales during Prime Day. This year, we predict more of the same for small brands.Look at some examples from Prime Day 2018. These challenger brands in the grocery category saw sales lifts of up to 9X on Amazon during last years event. This is a clear indication that smaller brands can, and frequently do outperform on Amazon and not just on Prime Day.Prime Day 2018 Amazon ($) sales lift for select challenger brands* GrocerySource: Profitero; 2018 Prime Day sales lift on Amazon vs average daily sales of previous week; Time period: July 9 - July 17, 2018; *Amazon weekly sales $1k - $250kHey Girl Tea Truwomen Isofrut Halfpops Once Upon a Farm+998% +866% +713% +633% +633%10PRIME DAY PREDICTIONS7. Brands that invest in Prime Day will see long-lasting benefitsPrime Day may be just a day (actually two days of promotions). But based on our analysis and experience of working with hundreds of brands, those participating in Prime Day typically benefit from a massive traffic and sales spike that can last weeks beyond the actual event. Profitero analysis reveals that 66% of products that saw a lift in traffic during Prime Day 2018 benefited from the Prime Day “halo effect” that lasted at least two weeks after the event.Here are two examples to illustrate just how big this halo effect can be in sales terms: Delta aggressively promoted its Delta Faucet 2-in-1 Dual Hand Held Shower Head at a 51% discount, taking the list price of $235 down to $115.99 during Prime Day 2018. The promotion paid off big: sales spiked (+4,165%) on Prime Day. But then Delta continued to benefit beyond the event, with average daily sales the following week registering 3.5X the average daily sales in the week running up to Prime Day.The halo effect of a Prime Day promotionSource: Profitero; Time period: July 9 July 24, 20187/9 7/16 7/17 7/24Average daily sales:$1,650Average daily sales:$5,940
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