Amazon Prime Day 2020: Big Changes, Even Bigger Results

By EXCLUSIVE Insights Team
TOPICSAmazon, Featured

Not immune to the disruption brought about by this year’s pandemic (though certainly profiting from it), Amazon hosted its annual Prime Day outside of the usual July window.

First offered in 2015 and often touted as Christmas in July because of the shopping volume rivaling only that of the winter gift-giving holidays, Prime Day has been the key to a profitable Q3 for millions of online retailers.

Unprecedented, Even for Amazon 

This year, however, Prime Day was delayed from mid-July to mid-October to give shoppers and all parts of the supply chain a chance to establish a new normal in the face of COVID-19. As if sales projections hadn’t already been skewed enough by the pandemic, the change of Prime Day from early Q3 to early Q4 forced brands and marketplace sellers to rethink their strategies with regard to meeting their financial goals for 2020, even those plans already adjusted for COVID.

We believe Amazon moved Prime Day back to October to stretch the holiday shopping period. There were a lot of noticeable issues with delivery speeds in Q2 during the peak of quarantine. As one way to combat these issues resurfacing during the holiday season, we see Amazon trying to shift consumer behavior to thinking of Prime Day  not Cyber5 [the weekend of Black Friday through Cyber Monday]  as the start of the holiday season. If successful, Amazon will turn a gift-shopping period that normally lasts 20-30 days into one that lasts approximately 60 daysIn doing so, this will free up shipping bandwidth and, ideally, significantly cut down the chances of shipments delayed to postholiday. It will also give consumers more choices about spending given the uncertainty of the moment.  

—Mike Frekey, Director of Applied Data at EXCLUSIVE Concepts 

How Did Amazon Prime Day 2020 Shake Down Across the Board? 

eMarketer predicted that Amazon would generate $9.91 billion in Prime Day worldwide sales, up 43% from the the previous year’s event. Although Amazon doesn’t announce its exact sales publicly, trusted sources like Digital Commerce 360 estimate shows that Prime Day 2020 exceeded eMarketer’s prediction, closing out at $10.4 billion — up 45.2% from the previous year’s event.

Driving Amazon Prime Day 2020 Success: SMB Marketplace Sellers and Pandemic-Related Consumer Behavior 

The key driver of this year’s Prime Day success was marketplace sellersAccording to Amazon, “Third-party sellers — most of which are small and medium-sized businesses — surpassed $3.5 billion in sales on Prime Day — a nearly 60% year-over-year increase, growing even more than Amazon’s retail business.”  

Amazon cited some of the best-selling categories during Prime Day 2020 as: 

  • Home 
  • Electronics (particularly Amazon’s deeply discounted private-label products such as the Echo Dot and the Fire TV Stick 4K) 
  • Nutrition & Wellness 
  • Arts, Crafts & Sewing 

Prime Day 2020’s top-performing categories should be little surprise given this year’s pandemic-driven emphasis on health, home, and hobbies. Our in-house trendspotting team found results to be in keeping with Amazon’s. Here are some additional winners identified by the EXCLUSIVE team: 

  • Apparel and Accessories 
  • Healthcare and Medical 
  • Sporting Goods and Outdoor 
  • Hardware 
  • Jewelry and Accessories 
  • Automotive and Parts 
  • Bedding 
  • Wireless Accessories 

How Did EXCLUSIVE-Managed Brands and eCommerce Businesses Fare This Prime Day? 

Businesses using EXCLUSIVE for their digital marketing experienced gains above and beyond the averages. According to Mike Frekey, “EXCLUSIVE has seen explosive average growth of 98% across our portfolio in October. For our clients, Prime Day 2020 revenue was up 121% relative to Prime Day 2019. 

Additional successes for EXCLUSIVE clients: 

  • 83% had a positive Buy Box conversion change this Prime Day compared to last. 
  • 64% of saw a revenue lift this Prime Day compared to last. 

What Now for the Rest of Q4 2020? 

Prime Day has marked an unofficial kick-off to the holiday season, but our thoughts and questions are more so focused on the weeks ahead.  

  • Will the Cyber5 long weekend come too late to deliver on customer expectations?  
  • Will consumers be celebrating the December holidays in-person or will they have to limit visits and rely even more heavily than usual on shipping?  
  • And will gift-wrapping become an expected service, putting increased demand on sellers?  

The answer to all these questions is (very likely) YES. 

A key input to that yes is informed by data and research – something that we, at EXCLUSIVE, always deploy when recommending and developing strategies for our clients 

Based on a September 2020 Digital Commerce 360 and Bizrate Insights survey, here’s the data that we think you need to know in order to make the best decisions for your business this holiday season. 

  • 77% of online shoppers intend to purchase more than half of their holiday gifts online. 
  • 66% of online shoppers don’t anticipate any change in their holiday spending despite varied sentiments around current events.  
  • 42% will shop earlier knowing that delivery times may be longer. 
  • 70% of consumers will start their holiday shopping before Black Friday18% have started already. 
  • 22% of online shoppers are consolidating their purchases among fewer retailers.

What does this mean for your business and what can you still do to make this holiday season a success? 

  1. Be bold but not reckless. You’ll have to take some chances and you should be doing that ASAP. Develop a strategy and test campaigns. Listen to the data. 
  2. Understand that you will have to spend money to make money. Expect to compete harder than ever this holiday seasonCPC rises during the holidays, which means that you will need to add budget and adjust your ad spends frequently. Concentrate on winners and put extra funds there. 
  3. Participate across channels. The best marketers know that one channel simply won’t cut it. You need to get the attention of viewers in more passive channels like YouTube. Meet shoppers where they are. Right now, theres no better way to do that than with display ads and video marketing 
  4. Optimize your website but don’t make drastic changes. You need to have a site that’s healthy, easy to use, SEO strong, and converts well.  
  5. Remarket to website visitors. The majority of your traffic will NOT likely convert on their first visits. Remarketing is a powerful tool but one that is not always understood or well utilizedGet your free eCommerce analysis so you can see opportunities for remarketing (and more). 
  6. Understand the economy and that consumers are expecting deals. Don’t wait to start offering promotions and coupons. Customers will appreciate your offers and their early purchases will serve to build your organic sales and rankings. 
  7. Monitor your performance extra closely. Do you have the visibility you need to monitor changes in traffic, which channels are driving success, and when your performance changesTools like our free Google Ads Scorecard make it crystal clear where you need to improve and how to do so. 
  8. Be careful with automation. Because 2020 has been so unpredictable, even the best automation tools can deliver costly errorsThere’s simply too much fluctuation and not enough known variables to be successful with software aloneWe’ve seen time and again cases where automating campaigns, especially in Google, can cause massive overspend or the opposite – underspend and a loss in visibility and ultimately new customer acquisition. Make sure you have a human expert on your side. 

Projections and Next Steps 

Deloitte’s annual holiday projections show that eCommerce sales will grow by 25%-35% this year with sales increasing by 14.7% compared to 2019. To benefit from the potential success that eCommerce will see this holiday season, you must be bold, have a solid plan in place, meet your buyers where they are, and be able to track daily progress so that you can pivot and adjust quickly.

Do you have the right plan for Q4? We’d be happy to help you create one!