In the United States, Black Friday and Cyber Monday are among the most anticipated shopping days of the year. Retailers are known to pull out all the stops, delivering bargains that are hard to match, while shoppers are typically out in force -- either physically or digitally -- looking for the best deals around.
E-commerce leader Amazon.com (NASDAQ:AMZN) debuted its Prime Day in July 2015 as a way to celebrate its 20th anniversary. The online retailer offered members a host of deeply discounted products and flash sales, billing the event as "Black Friday in July."
Each subsequent event has been bigger and more successful than the last. Amazon recently announced its fourth annual Prime Day shopping event, which will begin at 3 p.m. ET on July 16 and run for 36 hours. Here's everything we know about Prime Day 2018 so far.
Bigger than ever
Amazon is promising that Prime Day (and a half) will be "bigger than ever," expanding the event from 30 hours last year to 36 hours this year, and boasting "more than one million deals exclusively for Prime members around the world." The deals will be available in 17 countries this year, up from 13 last year.
The company also says that this year, "Prime Day will feature double the deals on Amazon devices -- and the biggest deals yet on Alexa-enabled products like Echo, Fire TV and Fire tablets, in addition to new categories from home security to Echo devices with screens." It's not surprising that Echo devices would be highlighted, as Echo owners tend to be some of Amazon's best customers.
An addition this year is the inclusion of Whole Foods, which Amazon acquired in August 2017. Prime members will get an extra 10% discount "off hundreds of sale items throughout Whole Foods Market stores, and deep discounts on select popular products." For customers with the Amazon Prime Rewards Visa, the company is increasing the usual 5% cash back, doubling it to 10% for purchases made at Whole Foods between July 14 and 17, for up to $400 in purchases.
Expanding the promotion
New to this year's event, "hundreds of well-known and emerging brands around the world will unbox exclusive new items, content and special-edition products available just for Prime members for a limited time." Customers will be able to view these live events online.
In the days leading up to Prime Day, Amazon will also unveil exclusive deals and offers that will be available immediately. These include $100 savings on the Echo Show, deep discounts on Amazon exclusives, 50% off movies and TV shows on Blu-Ray, DVD, and digital, as well as special offers on a variety of Amazon services including Music, Twitch, Kindle Unlimited, eBooks, and Audible.
Investors should take note
Investors looking to understand the sheer magnitude of this event need only to review Amazon's results. The company said that sales on its 2017 Prime Day "surpassed" Black Friday and Cyber Monday, making it the single biggest shopping day in the company's history. Amazon then posted blowout results for the third quarter of 2017, growing sales 29% year over year and topping its own forecast. When asked during the conference call to explain the better-than-expected results, CFO Brian Olsavsky said, "I wouldn't point to anything other than the Prime Day pickup ... it was stronger than probably I anticipated."
Prime Day is not only about sales and member appreciation, but about member acquisition. Because only Prime members can partake in the specials, Amazon offers a free 30-day trial membership in order to encourage new members to sign up and take advantage of the Prime Day deals. In the aftermath of last year's event, the company said, "More new members joined Prime on July 11 than on any single day in Amazon history."
Amazon doesn't typically disclose the contribution Prime has on its business, but it's widely assumed that Prime members spend more than nonmembers. Consumer Intelligence Research Partners estimates that Prime customers in the U.S. spend $1,300 annually, compared to $700 for nonmember customers. If that estimate is even close to correct, Amazon has a vested interest in adding as many members to its Prime program as possible, and Prime Day is the perfect catalyst.
It will be a wild day (and a half)
Amazon has taken an otherwise ordinary day and turned it into a global shopping event, and in doing so, has created a winning recipe for the company and its shareholders. Offering a day of members-only deals is the carrot that convinces many new subscribers to join -- and once on board, they become some of the company's most profitable customers.
Expect an update soon after the event is completed, but I think this will be another record-breaking shopping day for Amazon.