Amazon Prime Day is the fastest sales period (yes, it’s more than one day) in the slowest month of the year. While Amazon has not yet announced the date for its 2019 Prime Day, we can expect it to happen in July.
Just remember that Amazon is the 800-ton gorilla of online retail. On Prime Day, the gorilla is on steroids. So what do other online retailers do? Run? Hide?
We spoke with a number of analysts and executives about Prime Day, and the consensus is that one can plan to make the best of Prime Day, given enough lead time and knowledge of one’s own business. Retailers selling through Amazon will find themselves in a shopper-rich environment, so they have to craft the right enticements to notch sales. There are many ways to make an 800-ton gorilla work for you, and none of them involve bananas.
So when should one prepare for Prime Day?
Certainly not at the last minute, but opinions vary. Tanya Zadoorian, senior marketplace channel analyst at performance marketing specialists CPC Strategy, recommended crafting the campaign at minimum two weeks before Prime Day.
“You need to be locked and loaded in early June,” said Gary Burtka, VP of U.S. operations for AI-powered retargeting solution RTB House, which can be a whole month before Prime Day.
“Plan around Amazon as you would Black Friday,” added Rob Holland, chief operating officer at retail marketing platform Bluecore. You may need to begin planning in March or April how much inventory you are going to stock for July.
“Do not enter Prime Day without a goal, strategy or plan. Prime Day should be approached as an integrated team effort across inventory management, merchandising, and advertising.” stressed Kerry Curran, managing partner of marketing integration at agency Catalyst Digital.
Gauging when to push the campaign is easy. What to sell, how much to sell, and at what price, are answers that only data can yield.
Amazon’s sheer mass alone exerts a gravitational pull on shoppers, which Prime Day only amplifies. “Understand the reality that Amazon is a behemoth. The millions shopping on Prime Day are driving billions in transactional value,” noted Mike Perlman, CRO at marketing analytics platform Jumpshot. “People are in the market with a desire to buy.”
Each extra online shopper Amazon pulls into the market is an extra opportunity to sell them something, too. Perlman observed that Prime Day exerts a 200-300 percent increase in online demand, so retailers had better lay in sufficient inventory to cover peak sales.
“Obviously, get to understand what products have the highest demand,” Perlman continued. You can leverage third party data to do this, or better yet, turn to first party data to understand how to position and price your product for the Prime Day rush.
“If a retailer is in apparel or electronics, you know what products and categories they shop,” Holland added. Once you know that, “curate the package coming out of that and look for the windows of opportunity to drive your merchandise.” Prime Day will bring in a lot of people, so use your knowledge of your customers to create the programs and packages that will attract their dollars. “Get in and get ahead,” Perlman said.
Prime the engine
To exploit Prime Day, retailers must plan to spend more on their ad campaign before, during, and maybe even after the event.
Amazon does offer an ad platform that can augment the Prime Day sales push for goods sold via Amazon. Be prepared to adjust the ad spend or you will miss an opportunity, noted Marcel Hollerbach, chief marketing officer of Productsup, a product data feed vendor. An ad spend of $10,000 a day is realistic. “Keep an eye on limits and increase budget to leverage traffic coming in on the day,” Hollerbach said. What you are getting is “the ability to buy traffic and acquire shoppers.” he said. On Prime Day, “go all in and open all thresholds.”
“Publish ads a week or days before Prime Day starts,” Hollerbach continued. A brand can run ads outside of Amazon through other social media sites, say Instagram or Twitter, he added. And push items you want to sell out.
“Amazon will recommend multiple approaches to advertising so make sure you set up, test, and run all ad types before you enter the Prime Day period.” Curran said. “Paid media budgets should be set to 4x typical spend during this time period and spend should be very closely monitored to ensure that you’re not under-spending or over-spending towards your business goals and KPIs for the day.” Curran added, “You want to maximize your potential and pace throughout the day without going out of the gate too quickly or blowing through your budget for the year.”
Online retailers cannot hope to win going up against Amazon in a head-to-head sales fight. One must resort to a form of marketing jiu jitsu. You want to “leverage from Amazon to your site,” said Burtka. “It can be an ancillary thing you give to the client, falling within the terms and conditions of an Amazon seller.”
The purpose is to get around Amazon’s possession of user data — not shared, of course, with participating online retailers. To snare that data, retailers must craft ways to lure Prime Day shoppers off of Amazon and on to their sites. It can be anything from a free key chain to a warranty program; or even a call-to-action that may involve inputting an e-mail address to get a discount on another deal. Or, as Burtka put it, take advantage of Prime Day pricing and visit my store. “Brands have an opportunity to create brand loyalty and…drive people to their side,” Perlman added. People are cross-shopping, doing research at the brand site, then buying on Amazon. The opportunity exists for a savvy marketer to differentiate the brand and create a story at the brand’s site that would help loop the shopper back from Amazon, he explained.
Prime Day is more like Prime Week, Zadoorian noted. There are sales opportunities to be had after the event, if you know your market. For example, take high-end beauty products. “It doesn’t make sense to play during Prime Week,” she said. So instead of surrendering to a 40-50 percent discount, wait until later to offer a 10-15 percent discount instead, she explained. Shoppers will still be primed for discounts after Prime Day. It’s about “understanding your category,” she said.
Also think of remarketing and retargeting. You have a window of 2-4 days after Prime Day ends to retarget and connect to shoppers, Burtka pointed out. And don’t ignore niches. “A lot of sellers found niches where Amazon is not exactly active,” Hollerbach said. Looking at keyword volumes on Google and Amazon may illuminate these shadows where Amazon does not play, he explained.
Amazon is good at moving its own branded products and anything else that is high-volume, high discount. But when it comes to parts for jet skis or motorcycles, “Amazon is weak here,” Burtka said. These plays produce good margins and high conversions, and you can brand them, he noted.
“If you are a focused retailer, you are much more in tune with your category,” Holland said. Here the retailer must fight as the proverbial David to Amazon’s Goliath. “The specialty will be destroyed by Goliath if you don’t get it right.”