Notwithstanding warehouse workers’ protests and renewed calls for consumers to cancel their Amazon Prime memberships, Amazon once again topped previous record-setting Prime Days with what it’s calling the “largest shopping event” in Amazon’s 25-year history.
As reported by Lauren Thomas of CNBC, Amazon said it sold more than 175 million items during this year’s Prime Day shopping event, more than its sales for the past Black Friday and Cyber Monday combined (watch the video >>).
The online retailer, which didn’t disclose an actual sales figure in the press release (read below), called the two-day sale across 18 countries and ran for 2 days the “largest shopping event in Amazon history.”
It also said that on Monday and Tuesday it sold more Amazon devices - like the Echo Dot, the Fire TV Stick, and Alexa Voice Remote - over a two-day period than it ever has before.
Thomas further stated that Prime Day 2019 also delivered a boost to sales for Amazon’s rivals, many of which have been touting their own deals all week to compete with Amazon Prime Day.
The 48-hour shopping extravaganza gave large retailers a boost in online sales of 68%, on average, according to Adobe Analytics, which measures the transactions of 80 of the top 100 internet retailers in the U.S. Adobe classifies large retailers as companies that have more than $1 billion in annual revenue.
Niche retailers, which Adobe classifies as those that bring in less than $5 million in annual sales, saw a 28% lift in digital sales, according to the firm. Last year, niche retailers saw a decrease in sales, Adobe said.
Walmart, Target, eBay, Macy’s and Best Buy have all been running deals this week. Target pushed discounts for its in-house home goods brands. Walmart is expected to run deals, on everything from Google Home smart speakers to Instant Pots, through Wednesday. Breaking News: Walmart Deepens Store-Digital Integration as Web Unit Struggles.
Read: Could Amazon Be Worried About The “Walmart Effect”?
Jason Woosley, vice president of Adobe’s commerce product division, stated;
“Prime Day has become an indisputable summer shopping holiday, greatly benefiting online retailers that can attract consumers to their site through compelling email campaigns or offering value-add services like buy online, pick up in-store.”
Amazon’s website also experienced a major glitch during Prime Day 2018, which only ran for 36 hours, potentially giving rivals an even bigger boost when shoppers couldn’t order through Amazon. But that wasn’t the case this year.
Catchpoint, which monitors websites’ performance rates, said Amazon “did an amazing job staying technically available and loading fast under heavy traffic during Prime Days.”
Logistics Management's Group News Editor Jeff Berman wrote, while Prime Day does materially bump up demand and subsequently network volume levels, it also has a trickle-down effect, of sorts, on other major supply chain stakeholders, too, like UPS and the United States Postal Service, among others.
Since Amazon initially introduced Prime Two-Day shipping in 2005, domestic margins for UPS fell from 15.7% in 2005 to 8.9% in 2018, noted Robert W. Baird and Co. analyst Ben Hartford in a research note earlier this year.
“Amazon has been increasingly developing its own logistics capabilities since the early 2000s, leading some investors to believe that insourcing from Amazon's logistics efforts has led to margin erosion at UPS (and FDX),” he wrote.
“We think the impact has been less direct but nonetheless still very consequential: Amazon's creation of customer demand and expectations for B2C led to e-commerce's rapid development over the past 10-15 years. As a result, we recognize the risk a similar headwind being presented to parcel providers if the migration to free ‘One-Day’ becomes adopted and expected in customer preferences.”
And there is also clearly a subsequent post-Prime Day impact on the USPS, too, according to Carson Krieg, co-founder, and director of Carrier Operations at Austin, Texas-based Convey Inc., a software company focused on improving the delivery experience for retailers.
“Last year, the week after Amazon Prime Day, USPS shipping volume across Convey retail customers dropped dramatically - from a typical 20-30K/week down to 2.1K/week (or approximately 92%), said Krieg.
“This raises important questions about whether retailers chose to purposely avoid USPS that week, if the glut of orders created too many logistical issues for the carrier, or if retailers lost that much in business after consumers spent their hearts out on Prime Day. One thing is clear: for parcels that did go through the USPS system, average transit times spiked from 3.3 days to 4.4 days (33%), and negative customer feedback increased by 10%. It’s an important warning sign for USPS and the retailers who rely on it this year: Amazon is not only expanding its own delivery footprint but also increasingly biting into sales and shipping capacity for others during this period - requiring them to find new ways to create positive customer experiences and uphold brand promises through actionable insights and collaboration.”
Convey’s Krieg added that the two-day Prime Day spike, in a sense, serves as a third major shopping holiday, with Black Friday and Christmas, with the common theme being the Prime Day impact on parcel carrier capacity.
As for Amazon Prime Day itself, he said, he said it swamps the abilities of the USPS, adding that the impact of the rest of the e-commerce retail group for those few days is also pretty significant.
“Having a multicarrier ecosystem [during Amazon Prime Days] means retailers are not relying on a single point of failure,” he said.
“If you are going to leverage the USPS by itself, what we saw last year was a spike in FedEx volume, which speaks to the need for a backup, or contingency plan, for things like origins, when an order is processed and inventory planning, and exception management,” he said.
“What we see in our data is that 70% of our exceptions can happen in the first [part] of delivery and not the final mile, which is kind of counterintuitive to what people think of the last mile being the hardest, due to things like incorrect deliveries and addresses. With Prime Days, the exception issues relate more to the carrier or customer load times, origin source problems, unreadable bar codes, and other things that can go awry when a ton of volume disrupts the status quo.”
While Amazon Prime Day is well known as an annual event, that does not mean it is not overhyped, noted Jerry Hempstead, president of parcel consultancy Hempstead Consulting.
“Today is the premier example of hype, excess, and impulse buying,” he said. “Does any prime day buyer really need their purchases tomorrow? My birthday is two months away and Christmas is five months away. Amazon is promoting next day delivery because they can do it (much of the time) but in the end what is lost if the item is delivered in two days or five? One of the big items hyped today is the Echo Dot for $22. The world will not cease turning if you don’t get it tomorrow…or the Firestick for your TV.”
Hempstead also observed that unfortunately all this excess will put a strain on UPS and the USPS the remainder of this week, noting that the possibility exists that really urgent deliveries might get delayed as Amazon (and other retailers piggybacking on the sales hype) flood the networks with items that may not truly need this level of next day delivery. FedEx and DHL also benefit from Amazon Prime Day, he said.
Whether you are keen on online shopping or not, it goes without saying that Amazon Prime Day has become more than a big deal in supply chain and logistics circles.
There are many spokes on the wheel it creates over a two-day period that goes on and on, and it will only continue to spin as e-commerce continues to take a bigger piece of the action going forward.
Amazon Press Release
July 17, 2019, at 9:21 AM EDT
SEATTLE - (BUSINESS WIRE) - Jul. 17, 2019 - (NASDAQ:AMZN) | This year, Prime Day was once again the largest shopping event in Amazon history with more than one million deals exclusively for Prime members. Over the two days of Prime Day, on July 15 and 16, sales surpassed the previous Black Friday and Cyber Monday combined. Prime members purchased more than 175 million items throughout the event. Prime Day was also the biggest event ever for Amazon devices when comparing two-day periods – top-selling deals worldwide were Echo Dot, Fire TV Stick with Alexa Voice Remote, and Fire TV Stick 4K with Alexa Voice Remote.
“We want to thank Prime members all around the world,” said Jeff Bezos, Amazon founder and CEO. “Members purchased millions of Alexa-enabled devices, received tens of millions of dollars in savings by shopping from Whole Foods Market and bought more than $2 billion of products from independent small and medium-sized businesses. Huge thank you to Amazonians everywhere who made this day possible for customers.”
Millions of people around the world streamed Prime Day events – including the Twitch Prime Crown Cup featuring FIFA 19 and Apex Legends and the Prime Day Concert presented by Amazon Music and headlined by 10-time GRAMMY Award-winning artist Taylor Swift.
Highlights from the Prime Day Concert include Taylor Swift performing “You Need to Calm Down” live for the first time ever; SZA performing a rendition of the iconic ‘90s pop classic “Kiss Me” by Sixpence None The Richer; Dua Lipa’s rousing performance of her hit, “Blow Your Mind (Mwah);” and Becky G’s world debut of her fiery new track entitled “Dollar.” Prime members in 200 countries can still exclusively watch select songs from each performance from the Prime Day Concert on Prime Video. For more details on the show and to add it to your watchlist, head to primevideo.com/primedayconcert.
Members shopped across nearly the entire catalog of products including electronics, beauty, fashion, grocery, toys, furniture, everyday essentials, school supplies, and more. Some of the top-selling deals from around the world, excluding devices, included:
Prime Day 2019 was another record-breaking success for independent third-party sellers - mostly small and medium-sized businesses. These innovators, artisans, and entrepreneurs are an invaluable part of the Amazon family. Products from these unique businesses increase variety and contribute to the ever-expanding selection available to Prime members worldwide.
Globally, these businesses far exceeded $2 billion in sales this Prime Day, making it the biggest Amazon shopping event ever for third-party sellers when comparing two-day periods.
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