Wednesday, July 13, 2016

3 marketing lessons from Amazon’s ‘Prime Day’

For consumers looking to avoid a trip to brick-and-mortar stores, Amazon’s “Prime Day” is an anticipated shopping event.

In the days leading up to the event, Amazon teases deals and discounts on products from slow cookers to Kindle devices. On the big day, consumers can buy any of thousands of items on the site, so long as they have paid for a prime membership ($99/year).

As more and more consumers shop online, some retailers have dubbed the day “Black Friday in July.”

Here’s what marketers can take from Amazon’s yearly deals bonanza:

1. Anticipate problems.

Though Amazon avoided the debacle that ensued after its inaugural Prime Day last year, the company again ran into problems early on.

Fortune explained:

On Tuesday morning at 7:40 Eastern time, the retailer said on Twitter that some customers were having problems with the website. At 11:18 a.m., or two and half hours later, the company told Fortune by email that the problem had been resolved.

Amazon’s social media team also let shoppers know that it was working to fix the problem:

However, frustrated consumers took to Twitter to express their disappointment, and early into the event, #PrimeDayFail trended on the platform:

Marketers should anticipate problems, especially when they launch a big event or campaign. Preparing for potential glitches can help you handle them faster, stay on top of complaints and, ultimately, appease annoyed consumers.

Though #PrimeDayFail trended early in the day, media-monitoring platform Visibrain reported only 2,495 tweets under the hashtag—a significant drop from the more than 30,000 such tweets in 2015.

“People seem to be happier overall,” said Becky Tasker, manager at Adobe Digital Insights, told Bloomberg.

2. Shoot for the long-term goal.

Though Amazon told the Chicago Tribune that 18 percent more orders were placed during Prime Day than during Black Friday last year, the company received an influx of something much more valuable—Prime signups.

USA Today reported:

The end result was little drama and also little buzz, but estimates of brisk sales for the Seattle online retail giant.

"I haven’t heard much reaction from people this year and I think that in itself is telling. Going through Facebook, nobody’s bragging about the deals they’ve gotten," said Marlene Morris Towns, a professor of marketing at Georgetown’s McDonough School of Business.

Still, the end result was likely a just what Amazon hoped for — a marketing splash that encouraged more people to try its Prime membership.

Amazon told the Chicago Tribune that it got hundreds of new Prime members yesterday, which can translate into more loyal customers and increased sales throughout the year.

CNBC reported:

Enrolling more shoppers in its $99 annual Prime subscription service is essential for Amazon's revenue growth, as these shoppers spend significantly more than nonmembers. CIRP estimates that Prime members spend some $1,200 a year on Amazon, compared with $500 for people who don't pay for the service.

Once they sign up for Prime, they tend to stick around. Roughly 73 percent of shoppers who sign up for Amazon's 30-day trial convert into paid members, according to CIRP's data. And 91 percent of first-year enrollees renew for a second year.

A sale right now is good, but gaining a loyal customer and increasing sales over time are greater objectives for marketers. In your campaign messages and efforts, remember the long-term goal as well.

3. Ride coattails—if you can.

Amazon told Bloomberg that small businesses and sellers saw a more than 30 percent sales increase over last year—but it wasn’t the only company to grab consumers’ dollars yesterday.

“A selection of retail sites including Target, Best Buy, Macy's and Walmart saw three times more traffic, on average, than a typical Tuesday, according to tracking company HookLogic,” Advertising Age reported.

Many retailers offered deals of their own, AdAge continued:

Such retailers have been running a series of discounts and promotions in recent days, hoping to capitalize on some of the ecommerce mania surrounding Amazon. Macy's offered Black Friday in July specials with an assortment of over 31,000 items on sale, while Lord & Taylor and JC Penney doled out 25% discounts. Walmart has been offering free trials for its new Shipping Pass membership, which competes directly with Prime.

USA Today reported:

Toys "R" Us is offering shoppers 15% off regular-priced items, plus a sale on over 50,000 toys and baby products. The toy maker said since retail is a highly competitive environment, it wants to make sure that everyone has the opportunity to save with no membership required.

The Limited, Sears, Bealls, Banana Republic, Express, the Gap and Old Navy are all offering big discounts in the week before Prime day, says Offers.com.

Banana Republic is offering an extra 40% off sale through July 11, the store confirmed to Offers.com. The Limited also confirmed to Offers.com it is offering 60% off sale items through July 11. The Gap is holding "The Great Gap Sale" July 11 only, offering 60% off sale items, according to dealnews.com.

Offering similar sales or features (such as free shipping) at the same time as an event with great fanfare can enable marketers to ride the coattails of a bigger campaign—saving them money, yet still attracting customers.

Just make sure the trend or event you’d like to hook onto fits your organization. As consumers were “primed” for deals yesterday, retail marketers had many opportunities to entice them to visit their websites. Nonprofits seeking donations or a political outfit seeking signatures wouldn’t have evoked the same response.

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