Maybe it's time retailers start jumping on Amazon.com 's (NASDAQ:AMZN) coattails and start running Prime Day sales of their own -- not just having a big sales event and hoping consumers notice, but actually calling it a "Prime Day Sales Event" and cashing in on their rival's success.
A prime example of success
By all accounts, the e-commerce king's third annual one-day sale event was a blowout. Analysts estimate it generated about $1 billion in revenue for Amazon, which Bloomberg News says is about triple the average daily revenue it typically takes in.
Amazon, of course, is cagey with the details, noting only that "tens of millions" of Prime members shopped the site on July 10, without revealing how many items were sold. It did say "the best-selling product from any manufacturer in any category across Amazon globally" was its own Echo products, where seven times more of the voice-activated devices were sold this year than last year.
And not only did Amazon sell a boatload of Echos, Fire tablets, and Kindles, as well as Fire TVs, but third-party products such as the Instant Pot and Sony's PlayStation 4 were also big hits -- which is why retailers ought to start thinking about how they can tap in to the fervor.
Because Amazon.com is already eating away at their sales and siphoning off customers, they ought to try biting off a bit back. Retailers in China have done that by piggybacking onto the national sales event Alibaba (NYSE: BABA) has created for that country's Singles Day festival.
A singular event
Originally started as a way for Chinese college students to celebrate being single, the November 11 celebration began spreading beyond campuses and quickly became a cultural phenomenon. Alibaba saw it as an opportunity to boost sales and in 2009 launched its first Singles Day sales event, which was recognized as an overwhelming success that has only grown over time.
BusinessInsider says Alibaba generated $17 billion in sales last year, dwarfing the estimated $1 billion Amazon just achieved with Prime Day. In fact, Alibaba's haul was more than Amazon's total Black Friday, Cyber Monday, and Prime Day sales combined.
Other retailers have since joined in, posting their own Singles Day sales events. Alibaba's biggest competitor, JD.com (in which Wal-Mart (NYSE:WMT) own a better than 12% stake), didn't release specific figures but said it received more orders this past November 11 than it did in the past five Singles Days put together, and that its gross merchandise volume grew 140% compared to the prior year.
Singles Day has now become "the biggest shopping day in the entire world."
A me-too event
Yet Wal-Mart just announced it and JD.com are going to try to duplicate the effort by creating their own unique "omnichannel shopping festival" on August 8 (8-8), a date ripe with portent in China because the words for "eight" in Mandarin and Cantonese sound very similar to the words for "prosperity." It's also a way for Wal-Mart to ripoff Alibaba's big day, which when written numerically -- 11-11 -- represents "bare branches," a way of saying single men and women.
Maybe a retailer as big as Wal-Mart can have some of the luck associated with its new sales day rub off on it, but others may do better to surf the existing coattails.
Precedence for piling on
There are obviously differences between Singles Day and Prime Day that U.S. retailers would need to account for if they wanted to glom onto Amazon's sales sensation. To start, the former is a generically named event while Prime Day is for members of Amazon.com's Prime customer-loyalty program for which they pay $99 a year to get guaranteed two-day free shipping and a host of other amenities, including movies, music, and more. There might be copyright issues retailers would have to consider.
Singles Day was also an experience already imprinted on the cultural subconscious before Alibaba weighed in with its commercialization of the Day, but these are not insurmountable hurdles.
EBay (NASDAQ:EBAY), for example, overcame potential trademark violations by obliquely referencing its competitor by asking consumers who thought they had a "prime deal" to check out its site first, which seems to have worked as Bloomberg reported eBay having its two best sales days ever for July during Amazon's Prime sale.
And retailers have already helped turn Cyber Monday from a marketing gimmick by the National Retail Federation to keep Black Friday spending momentum going into an actual thing. Last year retailers set a new record with $3.45 billion in sales. Not bad for something that only a few years ago was the figment of someone's imagination, and Prime Day is now becoming something a national phenomenon in its own right.
Stop reinventing the wheel
Digital advertising and analytics firm Criteo found that major e-commerce sites saw a 15% jump in visits on Prime Day last year and enjoyed a 45% increase in the number of transactions, so maybe linking themselves more closely to the event could do even more for them.
By making it a more commonplace activity, one less associated with a particular company and more broadly a cultural occurrence, the devastation Amazon wreaks on retail might not be so pronounced.
Amazon.com's "takeover" of the retail industry for one day is crushing its rivals. Maybe it's time they try to take back some of their own by taking on the e-tailer that's killing them by specifically using its best weapon against it.