While Christmas in July has been a well-recognized concept, there is now a semi-official holiday to back it up – Amazon Prime Day.
Prime Day (this year a day and a half) was chock full of discounts for Amazon Prime Members, a subscription service that offers free two-day shipping and other amenities and now has more than 100 million members, covering more than half of American households.
Despite technical glitches because of heavy site traffic at the beginning (one of the hazards of our modern world), Amazon has reported that Prime members purchased more than 100 million products during the event and sales have topped those of previous Cyber Mondays, Black Fridays and Prime Days, making this the most successful shopping event in Amazon’s history.
Through its marketplace, small and medium-sized businesses around the globe achieved more than $1 billion in sales. While Amazon does not typically report sales revenue for the event, Coresight Research has estimated that sales would reach $3.4 billion for the 36-hour period.
The sales revenue from Prime Day is large, but not earth shattering.
For perspective, the estimated $3.4 billion would only be about 2 percent of Amazon’s annual retail revenue.
The real benefit to Amazon is through the promotion of its brands and membership program. Amazon reported that it had more sign-ups for the annual program than any previous day in its history. These new memberships give Amazon greater access to further sales, as members typically spend more on the site than non-members.
In the growing battle between the online retail giant and traditional brick and mortar retail centers, Prime Day was a huge victory, especially as membership sign-ups were lagging earlier in the year.
But competitors have predictably responded with their own special deals for Prime Day.
Target launched a similar one-day sale and has reported its highest single day of online traffic and sales on July 17. Walmart also touted lower prices and advertised free two-day shipping without a membership.
The success of Amazon will continue to shape the retail space, especially as brick and mortar stores expand their online presence and, like other online retailers, seek to respond in other innovative ways.
This process of change is difficult for many businesses, but represents capitalism at its finest – broadening choices, lowering prices, and sparking new ideas, all to the benefit of consumers.
Not to be forgotten, it is also a way to check some things off the list without braving the scorching heat!!
M. Ray Perryman is president and CEO of The Perryman Group (perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.