Four Actionable Tips From Amazon’s Prime Day Success

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Prime Day proved to be a big hit for Amazon with sales increasing 3X for Amazon Devices in the US. The second annual Prime Day was the biggest Sale day ever for Amazon. Amazon  announced in a press release customer orders surpassed Prime Day 2015 by more than 60 percent worldwide and more than 50 percent in the U.S.

With a pre-sale online deals announcement, Amazon created a Sales Hype for Prime Day. On the sale day, Amazon offered Lightning Deals that proved to be a major draw for existing and new customers. Amazon Fire TV Stick was Amazon’s best-selling device globally on Prime Day saw a price cut of nearly 50 percent as a Lightning deal.

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According to the press release, Small businesses and sellers on Amazon offering deals to Prime members saw orders nearly triple year-over-year on Prime Day – both worldwide and in the U.S. For Alexa Exclusive deals, including non-prime members a USD 10 discount was offered on a purchase over USD 20 made through an Echo, Dot, or Tap device.  Amazon saw one deal purchase being made every second by the Prime members. With better prices, Amazon Prime customers saved almost double the amount of savings in Prime Day in 2015.

Prime Day 2016 highlights from the U.S.
  • Amazon devices were up over 3x compared to Prime Day last year.
  • Biggest day ever for Amazon Echo – up over 2.5x compared to previous record day.
  • The most popular Amazon Dash Button brands purchased on Prime Day were Cascade, Charmin, and Tide.
  • Members purchased over 14,000 Lenovo laptops.
  • Members purchased on average one Alexa-exclusive deal per second during Prime Day using their voice.
  • Prime members had exclusive access to deals on top rated TV series and blockbuster movies to rent or purchase and instantly stream on the Amazon Video app on TVs, mobile devices, Amazon Fire TV, Fire TV Stick, and Fire tablets, or online – the top three Prime Day deal titles purchased or rented were: Deadpool, Kung Fu Panda 3 and 13 Hours: The Secret Soldiers of Benghazi.
  • Customers saved over $1 million on Kindle Unlimited memberships on Prime Day and the Prime Day Lead-up Deal on July 5.
  • The most selected Audible audio-book on Prime Day was A Game of Thrones: A Song of Ice and Fire, Book 1.

Among other notable facts, the more important trends are the use of mobile app among existing users where the orders on the app exceeded last year’s orders by 2X. As many as a million customers used Amazon Mobile App to check deals. Amazon’s Prime Day Sweepstakes received 2 Million entries for Prime Photo Sweepstakes.

  • Prime member orders on the Amazon app surpassed Prime Day 2015 mobile app orders by more than 2x.
  • More than a million customers used the Amazon app for the first time on Prime Day to shop and to watch-a-deal.
  • The Prime Photos sweepstakes had two million submissions worldwide during the lead-up to Prime Day.
Actionable Tips From Amazon’s Prime Day Success
Promote Your Subscription Service with a Free Trial For Increased Sign-ups

A subscription service brings more loyal customers. Amazon’s Prime Membership subscription grew to 63 Million from 44 Million Subscribers. What makes retailers win with a subscription service is that the subscription service customers on average spend higher than the nonmembers. Amazon Prime Members on an average spend USD 1500 annually in comparison with USD 625 spent by Nonmembers. Promoting the subscription service with a sale day events brings in a better rate of conversion and increased purchases.

Encourage App Opens and Site Visits with Exclusive Offers

Offer New products and services. Amazon’s Video Streaming added newer releases that Prime Members could stream exclusively that brought in Prime users to access the content on Prime Day and encourage App opens. With unlimited Video Streaming, users are encouraged to open apps. Exclusive offers that are promoted with special Prices such as Lightning Deals on a sale day  get a higher take-up rate. The deals announcement prior to the sales event and as Lightning deals proved to be a big draw.

Create a Win-win with Deals

Amazon’s Prime Day provided better savings in comparison with the last year’s sale. Prime Day was a great savings day too – members globally saved more than double on deals over Prime Day 2015. Offering value to customers with  sign-up deals brings in value seekers. Promoting your offers and products and up-selling can bring in increased revenues. Sale Day events are targeted at increasing the subscription service base, however to increase revenue from the subscribers, retailers need to look at revenue generation post the sale day event.

Include Deals and Offers On Staple products

New offers, game-changing products, Free Trials and Prizes and contest prizes can bring in new sign-ups and increase the engagement with  your existing customers to participate in sale day events however, including deals and offers on products that are the staple of your business can increase the sales and revenue. As seen for Amazon Prime Day the biggest increase came from staple household products.

  • Members purchased over 215,000 Instant Pot 7-in-1 Multi-Functional Pressure Cookers.
  • Members purchased over 200,000 headphones.
  • Members purchased over 24,000 Double Hammocks by Vivere.
  • Members purchased over 23,000 iRobot Roomba 614 Vacuum Cleaning Robots.
  • Members purchased over 14,000 Lenovo laptops.

With Alexa Buying Products Is As Easy As Saying “Yes”

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Alexa-swear-930x477Amazon’s Alexa, a virtual assistant that allows users to add voice commands by speaking into the Echo speakers, can now order over a Million products on Amazon. According to The Verge, ” if you say, “Alexa, enable NBC News,” or “Alexa, enable Fitbit” or “Alexa, enable Dad-Bot”  to an Echo speaker, the smart software will add those third-party skill sets to your set up, so you can issue more voice commands for those apps”.

With Amazon Echo, Echo Dot, Amazon Tap, or Amazon Fire TV, you can order over a Million products available on Amazon. The Voice Command has been activated for Amazon Prime subscribers. The Virtual Assistant cannot order apparel, shoes, jewelry, watches, Amazon Fresh, Prime Pantry, Prime Now, or Add-On items.

Virtual assistant Ordering brings a new challenge to the Virtual assistant space where brands were vying for conversational commands and adding skills such as making a shopping list or checking the flight status. Amazon Alexa’s Skills Kit was recently upgraded with 1400 Skills that allow users to enable Skills from Third Party Apps by simply speaking into the speakers with the command “Alexa Enable”.  “Now people who own devices like the $180 Echo and the $130 Amazon Tap can enable new skills, or capabilities, simply by saying, “Alexa, enable” and then saying the name of the desired skill. Until now, you had to retrieve your phone or tablet, find the skill, and turn it on.”. according to Venture Beat. Some of the updates on Amazon’s Alexa are:

  • There are now over 1,400 Alexa skills and the catalog has grown by 50 percent in just over one month
  • Customers have made over 3 million requests using the top 10 most popular Alexa skills
  • Since January 2016, selection of Alexa smart home API skills has grown by more than 5x

A comparison of Google Home scheduled for launch later in the year and Amazon’s Alexa shows Amazon is far ahead in the game, though Google Home has unique features such as the synced audio playback to multiple devices.

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With a  Virtual Assistant Interface, the buyer journey is now redefined as users can now buy products with voice commands. The Path To Purchase is redefined to  “No Click Ordering” with the Virtual Assistants.

 

Optimizing Rewards Strategy For Omnichannel

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According to an ecommerce study  among 3000 customers, Omnichannel retail is defining all stages of the buyer journey. The key findings of the study indicate:

Consumers are loyal to a brand that offers them a preferred way of fulfillment. Building your rewards strategy with offers for different shipping and fulfillment options can help brands retain and acquire customers. Walgreens has designed offers such as free in-store pick up within an hour to boost loyalty. One in Ten consumers also expect to pick up their purchases within an hour. Rewarding customers for different shipping and fulfillment options can bring newer customers. If your brand delivers or ships direct to customers, you can offer freebies such as Annual shipping waiver above a certain order size.

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Consumers also look forward to flexible payment options, in addition to in-store pick up.Building a rewards strategy that gives customers options to pay on flexible terms as well as in-store pick up will help build a loyal customer base. Customizing your rewards for Order ahead and pay later or Reserve and Pick Up in-store will help retailers capture the interest of consumers who like to shop with the reassurance of easy repayments and in-store pick up.
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Though as high as 33 percent consumers buy from retailers that offer in-store pick up, they like to buy online and have goods shipped to their address, making it important for retailers to build in shipping costs in the order value. Aeropastle offers coupons for free shipping on an Order Value of more than USD 100.

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As most consumers research online, prior to any purchase, promoting rewards for options such as mobile app, can boost online discovery. Create offers that audiences are likely to respond to such as accelerated reward points on sign-up or purchases made for a limited time.

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Existing rewards programs can be customized for promoting a certain shopping behavior for Omnichannel retail. Amazon offers Free 30 Day trial for Amazon Prime members with 2 day Free shipping on over 20 Million Items and access to Prime Video.

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Mobile Makes For 18 Percent Of Holiday Season Online Sales

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comScore has reported an increase of 13 percent with total online sales for the holiday season, reaching USD 69.1 billion, compared to USD 61.3 billion spent online during 2014 holiday season. USD 56.4 billion was spent online on desktop computers, marking a 6-percent increase versus the corresponding days last year, while online sales from mobile devices increased to USD 12.6 billion, marking an increase of 59 percent. According to comScore report, the Online Sales were highest for the Week starting December 6, the sixth week of Holiday Season.

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Cyber Monday was the leading Sales day, sixth year in a row, with more than USD 2.2 Billion spent on Desktop Computers alone.  Mobile commerce is estimated to have accounted for 18 percent of total digital commerce in November-December 2015, an increase from 13 percent in the previous season. Sales for the week of Thanksgiving, on average from Thanksgiving Day through Cyber Monday grew at 10 percent.

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Mobile and Desktop Share of Online Sales

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According to comScore chairman emeritus Gian Fulgoni. “Fairly early on it became clear that desktop e-commerce would likely underperform our expectations while mobile commerce was  poised to over perform, but for the most part signs continued to point to hitting that 14-percent overall growth estimate. Where the season ultimately fell short was in the last two weeks of the year, and in particular the week before Christmas. We had anticipated heavy desktop spending through Free Shipping Day on December 18th that unfortunately did not materialize, and spending began to soften more than expected by the Wednesday of that week.”

The shortfall of projected Sales Growth for Free Shipping Day could be on account of launch of services like Click and Collect, as reported by The Washington Post, Forrester Research has found this year that some 42 percent of online shoppers have used click-and-collect. Retailers need to prepare themselves for challenges of Click and Collect services, by adequately staffing for key sales events and opening convenience stores or pick-up locations and increasing distribution points. According to Slice Intelligence, Click and carry has accounted for 6.7 percent of online sales for 12 retailers.

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Equally important is the role of services like Amazon Prime that offer convenience of shopping and faster and free shipping. To combat Amazon’s success with Amazon Prime, Walmart unveiled a shipping pilot called ShippingPass in May. According to  Millward Brown Digital, Amazon Prime Members  bring in big revenue, with 63 percent of Amazon Prime members converting on the site in the same shopping session, almost five times the conversion rate of non-Prime members.

According to a report, Amazon was seen as the retailer of choice early-on, with a majority of online shoppers -51 percent, planning to shop at Amazon: 

  • The pure-play e-retail giant captured 39.3 percent of e-commerce sales from Nov. 1 through Dec. 6, up from 37.9 percent year over year, according to data from e-mail receipts of 3.5 million shoppers Slice evaluated.
  • Meanwhile, sales on Amazon’s marketplace rose 19.5 percent in the second week of December, beating the e-commerce growth overall of 15 percent, according to ChannelAdvisor, which helps sellers on Amazon’s marketplace.

More than 3 million people joined Amazon Prime in the third week of December alone, 200 million items were shipped for free to Prime subscribers, and more than two times as many Amazon devices were sold than last year during 2015 holiday season, according to The Verge and Amazon’s Press Release.

comScore’s holiday season forecast had expected desktop e-commerce to grow 9 percent to USD 58.3 billion and mobile commerce to grow 47 percent to USD 11.7 billion. While desktop spending fell short by 3 percentage points and USD 1.9 billion, preliminary mobile estimates suggest it exceeded forecast by 12 percentage points and nearly USD 1 billion, making for the shortfall on desktop.

According to Marketing Land “Much has been made of online retail surging and traditional retail suffering. But that “either/or” analysis is simplistic. Among online-only players, it’s really only Amazon and a couple of others that saw significant sales growth. The rest of online shopping gains came largely from traditional retailers’ online divisions.

In other words, traditional retailers’ e-commerce operations (and Amazon) are cannibalizing in-store sales. Yet traditional retail brands and stores support e-commerce by giving consumers the confidence to buy online with the expectation that they can return items locally if they don’t work out.”

Though the Desktop Online Sales fell short of the estimate, the Mobile sales exceeded the Forecast by USD 1 billion, suggesting that the mobile shopping may be more popular for online purchases than expected. According to a report by Fierce Retail “Click-and-collect also proved popular with shoppers as nearly one-third opted for the service and a whopping 69 percent made additional purchases at the time of collection”.

Macy’s CEO Terry Lundgren said in a statement that the department store broke its own record by filling 17 million online orders during November and December. Amazon, by contrast, filled 23 million on Cyber Monday (Nov. 30) alone. The unique visitors to retail sites shows that Amazon has a lion’s share of Online retail site visits.

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Although the retail online sales are on the rise, the store visits are still key to holiday shopping with 91 percent holiday shoppers visiting physical stores. According to Fierce Retail, “Online and mobile commerce may have experienced big spikes this holiday season, but 91 percent of shoppers still chose to visit physical stores.The vast majority of shoppers—198 million—visited a brick and mortar location between Nov. 1 and Dec. 25, according to the International Council of Shopping Centers (ICSC). The traffic is largely buoyed by retailers’ omnichannel efforts, including those to make stores more personal.”

Omnichannel retail efforts can be boosted for online customers by providing easy interface at a physical location and faster shipping options. Amazon recently announced Amazon@Penn, a new staffed package pickup point to be opened on the University of Pennsylvania campus. The first such facility at an Ivy League university, Amazon@Penn offers the Penn campus community a convenient location for members of the Penn Community to pick up and return their Amazon orders.

Eight Ways  To Win At Omnichannel Retail.