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Amazon Prime Day and the Value of “Sales” for eCommerce Businesses

To celebrate its 20th anniversary, Amazon introduced Prime Day – 24 hours of extraordinary sales, available only to members of Amazon Prime.
The anticipation of this sale was so great that Walmart decided to jump on the train and compete head-on with a huge “Rollback” sale of their own. All of this went on as Target promoted their annual “Black Friday in July” sale as well.

The question for eCommerce website owners and marketers alike is, “what can we learn from Amazon’s Prime Day Sale?”

Create an Excuse for a Sale

There are no holidays during the period from July 4th until Labor Day. Amazon, simply “created” a new holiday as an “excuse” to mark down their prices and generate what they aimed to be the highest grossing day of the year. They built a sense of anticipation for this day through their intense marketing efforts and the result was that everyone associated the day as “Amazon Day.”

Sales Not Only Increase Revenue, They Increase Average Order Value

A common misconception about sales is that the overall purchase or checkout cart value will be lower than if there had been no sale and that you need to bring a lot more transactions in order for the sale to be a success. The fact is, in most cases people will actually end up with an even higher average order value. The sale puts them in a “buy now” mode and they allow themselves to buy more items, at a higher original value.

We recently ran a 20% Off Site Wide Sale for a client of ours in celebration on Father’s Day.  When we compared the final numbers of the sale period to the previous period which did not have a sale, we found that not only were there more transactions, revenue and higher conversion rate, but there was even a significant increase in the average order value

Prime Day Sale

Not only did revenue increase but average checkout cart increased as well

Why is that?

When a user shops in a physical store, they are doing so after having already exerted both time and energy to make the trip. As a result, the chance that they will leave the store with an “abandoned cart” is extremely unlikely. With e-Commerce, however, this is just the opposite. The user can be sitting in the confines of his comfortable home or in the middle of a family vacation. Plus, they have the ability to price-compare with just a single click.

Successful eCommerce businesses understand this point and are able to drum up the right balance between hosting sales, without looking desperate or over-aggressive.


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