It’s that time of year again. The days are getting warmer and longer, summer is just around the corner, and, for Amazon sellers, it’s time to start getting ready for Prime day. And with the event being pushed back to October, sellers have an additional month to prepare.
(Listing optimization. Split testing. PPC campaigns. Think of how much you can do to improve your organic ranking with that extra time!)
However, with 2020’s unpredictability, is it really necessary to prepare for something that might not even happen? Based on what we’ve discovered* — like the fact that more than 70% of U.S. consumers have shopped on Amazon during the COVID-19 pandemic — the answer is a resounding YES!
For that reason, Amazon sellers should definitely take stock of their business to determine what needs to be done in advance of Prime Day, should it go ahead as planned.
What is Amazon Prime Day?
In 2015, Amazon introduced Prime Day — a day of deals and sales across Amazon.com — as a way to celebrate their Prime members (which launched in 2005) on Amazon’s 20th birthday. The first iteration of Prime Day happened on July 15, and ran for 24 hours.
Initially, Prime Day deals were only available in nine countries, but the list expanded each year, with the number of participating countries reaching 18 in 2019. They included:
- the Netherlands
- United Arab Emirates
- the UK
- the U.S.
And the sales event was a massive success.
Despite experiencing their biggest Black Friday sales numbers ever in 2014, Amazon shoppers purchased even more during Prime Day 2015 than they did on that previous Black Friday. Additionally, in its first year, Amazon’s Fulfillment by Amazon (FBA) sellers worldwide saw a 300% increase in sales, with 34.4 million goods sold.
Prime Day success over the years
The following year, in 2016, Prime Day grew.
Belgium participated (bringing the total number of countries taking part to 10), sales worldwide were 60% higher than those in 2015, and third-party sellers offering deals nearly tripled their orders (year-over-year).
Prime Day 2017 saw even greater growth, not only in terms of products sold (50% more than 2016) and participating countries (up from 10 to 12), but in the length of time the deal day lasted as well — from 24 hours to 30.
Then, in 2018 and due to the success of the extended hours, Amazon took it a step further and ran Prime Day for 36 hours. And once again it paid off.
Prime members worldwide bought over 100 million products, SMEs (small and medium-sized enterprises) earned over $1.5 billion in revenue, and it was Amazon’s largest day-and-a-half of sales globally.
Finally, Prime Day 2019 ran for 48 hours, and sales eclipsed 2018’s Black Friday and Cyber Monday sales combined.
During that two-day time frame, shoppers bought more than 175 million items, generating over $2 billion in revenue for third-party sellers. In fact, some sellers reported experiencing an increase in sales anywhere from 23% to 200%.
Amazon Prime Day’s halo effect
Prime Day has become so prominent that other e-commerce sites are benefiting from its popularity. This halo effect boosted online sales of SMEs by 28% during 2019’s 48-hour Prime Day. And large businesses fared even better, averaging a 68% increase in sales during that period.
For example, Target’s CPG sales (consumer packaged goods) more than tripled during Prime Day, compared to its sales during an average two-day time frame in 2018.
When is Amazon Prime Day 2020?
While Amazon always keeps a tight lid on the exact date of Prime Day until a month or so before the actual event (usually in July), sources say Prime Day 2020 is being pushed back until sometime in October. However, with the uncertainty of COVID-19’s future course, there is a chance that Prime Day 2020 may not happen at all.
Why Prime Day 2020 might be cancelled altogether
With COVID-19’s unpredictability (as well as Amazon’s own; they’ve pushed the event back twice so far), Prime Day 2020 could be called off due to:
Potential reduced consumer spending:
Many consumers have lost income or tightened their spending during the COVID-19 pandemic, and have minimal disposable income for non-essential goods. This may continue to be the case, or even worsen if there is a resurgence of the virus:
- 56% of consumers are concerned with their current financial situation*
- 61% of consumers planning on reducing their spending for non-essential items
Amazon’s primary focus on providing essential goods:
Amazon has made it clear from the beginning of the COVID-19 pandemic that it would prioritize essential products, even temporarily freezing new FBA shipments of non-essential goods. Prime Day products span just about every category — they’re certainly not limited to essential goods.
Disruption to the global supply chain:
The COVID-19 virus has affected nearly the entire world, and China — where most of Amazon’s third-party sellers source their products — has been affected in a big way. While suppliers in China and elsewhere have continued or restarted operations to produce and ship products, some supply chains are still recovering.
Overall, however, despite initial impact and concerns regarding Amazon sales and business performance, plenty of data indicates that the retail giant has recovered just fine.
Why we think Prime Day will occur in 2020
But, the loss of income experienced by many Americans could lead many to look for Prime Day deals that will help them save money. Not to mention, despite COVID-19, consumer spending is still high — especially on Amazon.
Based on a May 2020 survey of more than 1,000 U.S. consumers*, we found that:
More people are shopping on Amazon:
Because of the lockdowns caused by COVID-19, shoppers are limited in where they can source much-needed items. Therefore, they’ve had to find alternate sources from which to purchase much-needed household items. Consumer spending indicates that shoppers are looking to Amazon more than any other retailer during this time:
- 71% of consumers reported shopping on Amazon during the pandemic
- 48% of consumers say they are shopping more frequently on Amazon since the COVID-19 pandemic than they did previously
People are spending more money on Amazon:
Though more than half (52%) of U.S. consumers have reduced their overall spending due to a decrease in discretionary funds, many have increased the amount they spend online. And with Amazon positioning itself as THE place to find essential items shoppers have trouble finding elsewhere, the majority have increased the amount they spend on the platform since the pandemic began:
- Nearly two-thirds (63%) of U.S. consumers have increased or maintained their online spending (32% decreased)
- 61% have increased or maintained their Amazon spending (29% decreased)
- 28% said they are spending more on Amazon than they were before COVID-19
Consumers are committed to shopping on Prime Day 2020:
With many households living on a very tight budget since the lockdowns started, shoppers are trying to find ways to save money. And with millions of deals available during Prime Day, it’s not surprising that consumers are already saying that they WILL buy on Prime Day 2020 — even with the uncertainty surrounding this year’s Prime Day due to COVID-19:
- 39% of U.S. consumers said they will participate in Prime Day 2020, while 33% said they might take part
- 73% of consumers said they’re looking for products with the lowest price while shopping on Amazon, which is in line with Prime Day’s purpose
Prime Day 2020 offers Amazon an opportunity to solidify their brand loyalty:
At a time when other major brands are on shaky ground with their customers, Amazon has been continuing to provide their customer-base with the service their buyers have come to expect. And with more than 150 million Prime members who value Amazon’s desire to meet their every need, going ahead with Prime Day 2020 will only act to increase their attachment to the brand:
- 70% of consumers value being able to shop on Amazon, with 73% thinking it’s a good company for shoppers
- 52% of respondents reported having a greater appreciation of Amazon since the emergence of COVID-19
Why you should prepare to sell on Amazon this summer anyway
Regardless of what happens with Prime Day 2020 and COVID-19, as a third-party seller it’s in your best interest to prepare your listing(s) for a potential increase in summer spending.
According to our survey, here’s why:
- 38% of respondents said shopping on Amazon is a necessity, due either to location, disability, or other limitations.
- 65% of survey respondents said they shop on Amazon at least once a month, and 34% said they shop on the site at least once per week.
- As for life post-COVID-19, 69% think the majority of shopping will take place online in the future.
- And 39% are fine with never shopping in a physical retail store again.
- In fact, even after retail stores reopen, 16% of consumers said they will increase their Amazon spending.
Amazon is dependent on third-party sellers
Amazon needs its third-party sellers to make Prime Day (and the retail-side of their business in general) successful, driving big sales and revenue.
In addition to the $2 billion in revenue generated by third-party sellers during 2019’s Prime Day, SMEs made up 52% of Amazon’s retail sales in 2020’s first quarter (down slightly from 2019’s high of 54% during Q2).
And, with 52% of consumers saying they would choose Amazon if they were only able to buy products from a single store, it’s imperative that the platform continue courting sellers. It’s the best way for them to ensure that their customers have the variety of products they’ve come to expect.
What you can do to prepare for Prime Day 2020
In order to fully reap the rewards of Amazon’s Prime Day, it’s important to make sure your business is ready for the potential increase in sales. (Our seller calendar can help you keep track of important, upcoming dates like Prime Day.)
To do that, though, you need to act now — even if Prime Day runs in October, immediate action is still a must to make things happen! And how you prepare for the big event will depend on the business model you’re currently using.
For individual preparations based on your operating model, this is what we recommend.
When it comes to private label products, the most important thing to consider is your inventory level(s). Fortunately, there is still time to get the extra inventory you might need to meet the potential demand for your product during Prime Day. But, despite the extra month Prime Day 2020’s postponement has given sellers, it’s important to act quickly!
To help speed up the process of getting your stock to Amazon’s fulfillment centers and onto your shelves, you may want to look for a supplier closer to the U.S. than China. And using Jungle Scout’s Supplier Database can speed up the process even further by helping you find the right manufacturer quickly and easily.
For arbitrage sellers, because Prime Day experiences such high volume traffic and sales, it’s a great opportunity to offer products that don’t normally sell well. So, get ready for Prime Day 2020 by going through your house and sending any valuable one-offs, random items, and adds and ends you want to sell to Amazon.
This is also the perfect time to review your current inventory and price old stock to sell. You can also do some research and sourcing of new products now, to build up your inventory for the big event.
For any business model
All sellers — whether you’re selling private label, arbitrage, or dropshipping — need to focus on listing optimization in advance of Prime Day. A discounted product won’t be enough to drive conversions. Ensure your listing is as attractive to customers as possible to increase your chances of making those Prime Day sales.
Another way to improve your odds of Prime Day conversions (if you already have an email list) is to run a thoughtful email campaign prior to the big event. By providing your past customers with a positive email experience, you could see a significant lift in your Prime Day sales numbers.
In fact, according to Adobe Digital Insights (ADI), brands that interacted favorably with customers prior to Prime Day increased revenue by 52%, compared to the 23% increase for those sellers who did not.
Lastly, regardless of your chosen business model, all third-party sellers must apply for the right to offer lightning deals during Prime day. So, before you submit your application, make sure your product(s) meet Amazon’s deal requirements.
Other things to know about preparing for Amazon Prime Day
That’s not all you can (and perhaps should) focus on though. According to a couple of our in-house experts, it’s also a good idea to:
- Audit your listings: Check your title, bullet points, images, and descriptions to make sure they are up to date.
- Split test your A+ Content: If you are brand-registered, consider using Amazon’s split-testing feature to maximize your listing’s conversion potential.
- Use ‘Amazon Coupons’: Lightning deals are great, but coupons can also attract those buyers all sellers look for during Prime Day.
- Review your PPC (pay-per-click) campaigns: Consider bidding more aggressively for your product’s most important keywords — starting now — to increase your organic ranking by prime day.
- Take advantage of ‘Bulk Request Reviews’: Use this feature regularly (either through Jungle Scout’s Extension, or Amazon’s request button) to gain as many reviews as possible between now and Prime Day to give your organic ranking a boost.
- Adjust sales prices: Change your product price to generate more sales and get rid of inventory. That will save you being charged a long-term storage fee, and could boost your Best Sellers Ranking (BSR) organically.
So, now is the time to either get prepared for Prime Day if you’re already an Amazon seller, or to begin selling on the site.
And if you’re the latter, discover more about how to sell on Amazon:
In May, 2020, Jungle Scout conducted an anonymous survey of 1,006 U.S. consumers, asking them about their buying preferences and behaviors.
Respondents ranged in age from 18 to 75+, and represent every U.S. state, all genders and employment types, and various levels of income.
For more information about this article and Jungle Scout’s data, please contact [email protected].
*Disclaimer: This article was updated on July 2, 2020 to reflect Amazon’s latest announcement regarding the timing of Prime Day 2020.