Ten years of Prime Day: Can Amazon’s promotional event continue to thrive against new players?

Prime Day has been an integral part of Amazon since 2015, first introduced as a 24-hour event spanning nine countries.

It has since grown to a two-day affair with promotions running across 23 countries this year and sales often surpass those seen during Black Friday.

With day one of 2023’s Prime Day event becoming the single largest sales day in Amazon’s history, Retail Week explores what’s next for Prime Day and if it can maintain its popularity against a new breed of lean ecommerce competitors.

Spend, spend, spend

Who doesn’t love a bargain? Slashing the cost of high-priced items like electronics and kitchen appliances has made Prime Day a huge hit over the years. 

When split by categories, consumer electronics, home and kitchen, clothing and shoes, automotive, and lawn and garden were snapped up by shoppers the most last year, according to data from Rithum.

UK spending over the mammoth occasion is also increasing year on year, as data from Adobe Digital Insights shows spend grew 2.2% in 2022 to £1.23bn and 2.4% in 2023 to reach £1.15bn.

The event is such a success that KPMG UK head of consumer, retail and leisure Linda Ellett says we should view Prime as more of a loyalty scheme than a product. 

“Retailers look to appeal to the shopper across multiple aspects with a loyalty scheme,” she says.

“Loyalty schemes have to include some element of price benefit as 70% of consumers say value for money is still in their top three reasons for buying something. 

“But if you can tap into that consumer experience in some way, that’s going to be a winner. Prime has all the other aspects to it, including things like streaming services that tap into that experience.”

What to expect in 2024

Ten years on, it looks like this year’s Prime Days are still set to be huge. Based on spending levels and patterns during previous Prime Days, Adobe Digital Insights expects UK shoppers to spend £1.24bn over the promotional event this year, growing 7.5% from 2023.

Prime Day still garners huge attention from consumers, especially as it now offers deals across more countries than ever, but data from Similarweb shows a steady decline in UK traffic visits in recent years.

Day one of the event in 2020 saw 14.3% growth compared with day one of Prime in 2019, but UK visits to the site have dropped since.

Traffic across the two-day event fell from 35.4 million in 2020 to 33.1 million in 2021, with 2022 and 2023 decreasing to 29 million and 27.7 million respectively.

While the data doesn’t count visits to the Amazon app, the site traffic demonstrates that even though overall spend is up, fewer people are visiting each year.

“Amazon is planning to launch a new online marketplace with budget-friendly items shipped directly from China”

Sue Azari, Appsflyer

Similarweb senior insights analyst Daniel Reid says declining site engagement might show that Prime Day is “losing its appeal”.

He adds: “Amazon has recently begun pushing early Prime Day deals in a bid to drive up anticipation of the event, so some consumers who would have made purchases during the actual Prime Days have brought their purchases forward.”

Pushing early deals could be a new way for Amazon to keep its Prime Day event fresh and competitive after 10 years. Ecommerce lead at analytics platform Appsflyer Sue Azari believes added pressure from the likes of Shein and Temu is also forcing Amazon rethink its offering beyond Prime Day to grow customers.

“As a result [of competition], Amazon is planning to launch a new online marketplace with budget-friendly items shipped directly from China. 

“On the flip side of this, it’s also seeking to engage with a more affluent customer and has moved into the luxury resale market by partnering with Hardly Ever Worn It.”

The competition heats up

The rise of online shopping since the pandemic has not only benefited Amazon but exposed consumers to a wide array of ecommerce retailers.

Competitors are aware that Amazon is the top dog in the online retail sphere but Azari says this shouldn’t stop others from vying for consumer spend.

“Some retailers are pulling back entirely from promotions and instead focusing on loyalty programmes, to drive long-term retention and also to protect margins and increase profitability,” she says.

“Other retailers could benefit from planning their own version of Prime Day. In fact, a lot of ecommerce retailers plan the launch of their own promotions and sale events in line with Prime Day.”

Retailers including Wayfair, Best Buy, Target and Walmart are participating in a phenomenon called ‘Black Friday in July’, where retailers announce deals typically coinciding with Prime Day.

“Retailers used to tell us they would promote an item and would see an increase in full-price sales. Now, the shopper just goes from one promoted brand to another”

Linda Ellett, KPMG

Even TikTok Shop is jumping on the bandwagon with a summer sale in the US starting July 9 called ‘Deals For You Days’, offering discounts on clothing, beauty, books and decor. 

The likes of Shein and Temu however, don’t have to think about running special sales as both offer rock-bottom prices all year round. 

For Ellett, the retailers that often hold promotional events run the risk of the consumer never paying full price for anything.

“Retailers used to tell us they would promote an item and then would see an increase in full-price sales following that.

“Now, the shopper just goes from one promoted brand to another brand,and that is sticking.”

To combat this, she adds that retailers need to weigh up more than just price cuts and think about the event itself, especially Amazon if it wants Prime Days to stay relevevant for another decade.

“It has to be above trying to acquire customers through general promotion. If you can bring something new, then you’re going to appeal to the shopper rather than becoming noise in the background.”