Amazon’s Prime Day Proves Everything Old Is New Again

It’s Crazy Eddie 2.0

Prime Day is back again, but retail analysts say it's nothing new. Amazon
Headshot of Lisa Lacy

Details are starting to emerge about Amazon’s fifth Prime Day, which will kick off July 15 at the stroke of midnight PT and, over the following 48 hours, become the longest-running Prime Day.

Each year it gets a little bigger, a little longer and a little more star power. Yet even though Prime Day is a retail event consumers can find during an otherwise slow sales period, the widespread markdowns and unfocused messaging seem a better fit for bygone eras than one defined by consumer experience and connection. Analysts, however, say lack of innovation isn’t a problem here. Although the midsummer flash sale is not a new concept, it continues to work.

As previously reported, the National Retail Federation said it has seen midsummer sales like Prime Day for 40 years as retailers try to offload inventory or spur consumers to start their back-to-school shopping.

Allen Adamson, co-founder of marketing services firm Metaforce and adjunct associate professor at the NYU Stern School of Business, pointed to consumer electronics store Crazy Eddie, which was at one point the largest chain in New York and had Christmas in July (and August) sales, as an example of a pioneer of summertime discounts long before Amazon.

“It’s this idea of … instead of laying on the beach, to go shopping in the dead season,” Adamson said. “It’s been a retailer’s dream for a long time. And with Amazon, you can still be on the beach and still shop.”

And shop they do, despite social media posts every year about how disappointing the selection is, said Sucharita Kodali, vice president and principal analyst at market-research firm Forrester. According to previous reports, Forrester estimates Amazon sold $400 billion worth of product on Prime Day 2018, which is triple a typical day for Amazon.

“Consumers still look and buy and it ends up being one of the biggest days of the year for Amazon,” Kodali added.

Amazon has remained characteristically coy when it comes to sales figures, preferring general statements, like, “Prime members worldwide purchased more than 100 million products [on Prime Day 2018]” and “sales this Prime Day surpassed Cyber Monday, Black Friday and the previous Prime Day … making this once again the biggest shopping event in Amazon history.”

Amazon did not respond to a request for comment.

And, really, it may boil down to a simple truth about human nature: Consumers love a good deal.

“Consumers love getting things presumably cheaper than what they may be perceived to be,” Kodali said. “Keep in mind, even when T.J.Maxx has a price—it’s the comparable price, so there’s the perception you’re getting a discount, not that you’re actually getting a discount. That’s all it is—a Black Friday sale in the middle of the summer.”

In fact, Amazon teased an early deal on a 43-inch smart TV four times in its Prime Day announcement, along with Lightning Deals, which it warned “have limited quantities and could sell out fast, so Prime members should come back frequently to view new deals launching throughout the 48-hour event.”

“It’s the oldest marketing trick in retail,” Kodali added. “There are a limited number of items; you tell people when they’re available and step back and let the crowds go wild.”

According to Adamson, Amazon needs just “a few ridiculously priced loss leaders” like that TV to use as a trigger for consumers to start thinking “If they’re selling [40]-inch flatscreens for $200, there must be good deals on toothbrushes!”

And the sense they might miss the deal of a lifetime—and the ability to tell family, friends and acquaintances about their triumph—is a big motivator.

“Finding great deals is still something people want to share,” he added.

What’s more, scrolling for a good deal increases the odds customers will find something new.

“It probably gets people to buy cross-category that they wouldn’t have considered otherwise,” Kodali said. “It’s the treasure hunt. You’re at Target or Costco and seeing things and thinking, ‘Oh, I could use that,’ or ‘Maybe I could use that and the price is good.’ Amazon is not a source of discovery, but this is one day of the year when it can actually be a source.”

And, of course, it encourages consumers to sign up for Prime. Last year, Amazon said it “welcomed more new Prime members … than any previous day,” although it did not disclose how many—only that it has more than 100 million globally.

@lisalacy Lisa Lacy is a senior writer at Adweek, where she focuses on retail and the growing reach of Amazon.
Publish date: June 26, 2019 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT