Adobe Analytics predicts biggest Prime Day yet – not just for Amazon

Adobe Digital Insights - Prime Day Lift

In just five short years, Amazon’s Prime Day has become a retail extravaganza and Adobe Digital Insights (ADI) took at look at data collected by Adobe Analytics on what to expect for this year’s Amazon big shopping day in the summer.

This year’s event will happen in the 48-hour window of July 15 to 16, giving Amazon’s Prime subscribers in the US access to an unprecedented number of deals

READ MORE: Amazon Prime Day – July 15 & 16 will be a two-day event in 2019

“But what we are seeing is that Prime Day isn’t just an Amazon holiday anymore. Retailers have had a competitive response to the event over the past few years. In fact, research shows that more than 250 retailers are gearing up to convert Prime Day traffic this time around.”

Taylor Schreiner, principal analyst at Adobe Digital Insights (ADI)

The ADI team looked at tactics and strategies for this year. The team, led by Schreiner, conducted an analysis of aggregate and anonymous data via Adobe Experience Cloud, Adobe Analytics Cloud, and Adobe Advertising Cloud.

This data helped them to better understand how retailers can compete for ecommerce sales during this two-day event.

Based on the data analyzed, The ADI team provides five predictions for this year’s summer sales event:

1. Better at conversion, retailers will see their best Prime Day yet

Online retailers are seeing an increasingly strong “halo effect” on Prime Day. Revenue lift for the top retailers during Prime Day 2018 was close to 60%, and ADI predicts this year’s lift will be even higher, reaching an astonishing at 79%.

ADI also predicts Prime Day will be the third day ever outside of the holiday season to surpass $2 billion in ecommerce spending, after Labor Day 2018 and Memorial Day 2019.

“We attribute this growth in sales to the fact that the big ecommerce competitors have become better at reaping the benefits of this artificial holiday. After all, they’ve now had almost five years of practice in converting Prime Day traffic.”

Taylor Schreiner, principal analyst at Adobe Digital Insights (ADI)

Last year ADI says retailers saw a 54% lift in conversion on Prime Day and that number will probably increase for 2019.

Looking further into the numbers, 70% of the 54% lift last year was directly tied to conversion. Twenty-five percent of that lift was due to an increase in visits, and the remaining 5% of the lift was caused by the increase in basket size.

“All of this is from retailers that are already winning. We have found that successful retailers that are growing on par or faster than the industry showed a significant lift on Prime Day last year, while those that are growing below the industry benchmark saw almost no lift.”

Taylor Schreiner, principal analyst at Adobe Digital Insights (ADI)

2. Physical locations will give an edge on Prime Day

Buy-online/pickup-in-store (BOPIS) has become a major option for consumers, especially during key holiday shopping periods.

This is highlighted by the fact BOPIS saw a record 65% increase in usage during the 2018 holiday shopping season (Nov. 1 to Dec. 31).

According to Schreiner, consumers usually use BOPIS for less expensive items, which results in a smaller average order value. However, Prime Day brings BOPIS order values up closer to the online average of $146.

“Of course, there is a big opportunity for retailers to build loyalty. It’s imperative to ensure a fast, seamless pickup with staff that is ready to help consumers find and even suggest anything else shoppers might need while they are in the store.”

Taylor Schreiner, principal analyst at Adobe Digital Insights (ADI)

3. Email and video will be the key to a successful Prime Day

According to Schreiner, excellent email experiences give brands an edge on Prime Day. The data shows Prime Day lift in 2018 had a direct correlation to email campaign prowess among the top retailers.

Retailers that were very successful at using email campaigns to drive revenue saw a significant lift in Prime Day sales last year,” he said. “On the other hand, retailers with a poorly developed or completely undeveloped email channel saw zero lift on Prime Day.”

Taylor Schreiner, principal analyst at Adobe Digital Insights (ADI)

Overall, Schreiner added, email campaigns were responsible for an 8.8% increase in order share on Prime Day 2018. 

Also worth mentioning is how video advertising engagement heightens on Prime Day, with click-through rates up 55% and viewable completion rates up 20% in 2018.

Interestingly, this engagement lift is primarily driven through desktop, showing advertisers would be well-advised to focus their energy here rather than mobile.

4. The best Prime Day discounts are …

The ADI team suggests consumers will find the best deals on Prime Day on electronics, apparel, and home goods.

Discounts on home goods and electronics are on par with discounts found on Cyber Monday. Prime Day apparel and linen discounts outpace holiday discounts.

“Consumers, look for the steepest electronic discounts on smart items, specifically watches, TVs, and home accessories. And retailers remember: while everyone loves a deal, deeper discounts don’t always translate to more sales.”

Taylor Schreiner, principal analyst at Adobe Digital Insights (ADI)

According to the analysis, consumers are most discount-sensitive toward toys and home/garden goods. Steeper discounts on appliances, personal care products, and groceries doesn’t necessarily indicate more purchases.

Items in the $50 to $100 range see the strongest relationship between discount and units purchased.

5. Return rates increase for purchases made on Prime Day

Last year saw a 30% increase in returns for items purchased on Prime Day, indicating that consumers are quick to buy items they don’t ultimately want or need.

This is the one metric retailers will dislike, but it comes with the territory when offering quick and flash style sales. Buyer remorse increases as consumers may not spend as much time researching products.

Schreiner offers suggestions for retailers to decrease return rates, but for many small business sellers that may be out of reach at the moment unless they are selling on a marketplace that offers technology innovation in showcasing products.

“Experiences that use emerging technology, such as augmented reality, and others that aid consumers in choosing the right products could help retailers this year in decreasing returns. Think of what Ikea is doing with its Place app, which allows users to visualize a piece of furniture in their space. These types of innovations certainly help consumer make better purchase decisions.’

Taylor Schreiner, principal analyst at Adobe Digital Insights (ADI)

Conclusion

While much of the report focuses on larger retailers, there is good information here for any size online retailer.

Small business merchants can expect significant increases in sales on Amazon, but also other marketplaces and their own webstores if they planned for this mid-summer sales event.

The full report from Adobe Digital Insights is below

READ MORE: Amazon Prime Day is coming! – Are you ready?


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