Why Amazon’s second Prime Day is unlikely to make or break brands’ holiday sales
Amazon’s fall Prime Day sale is just around the corner, but sellers are doubtful the second annual sales bonanza will put a dent in their holiday sales goals.
In August, Amazon announced its fall Prime-like sale dubbed “Prime Big Deal Days” would return this October, though the exact dates have not yet been announced. Last year, the sale was held Oct. 10 and Oct. 11. While Amazon’s summer Prime Day has been around since 2015, the company introduced an October Prime Day in 2022, ostensibly to kickstart the holiday season earlier than before. With consumers spreading out their holiday shopping earlier than ever, it’s no surprise that Amazon’s fall sales event has returned for the third year in a row.
However, it’s unlikely this event will compete with the sales Amazon saw during its July Prime Day. Earlier this year, Amazon saw its “biggest Prime Day shopping event ever,” with shoppers buying more items over the course of the two-day period compared to last year when customers bought more than 375 million items worldwide. By comparison, shoppers scooped up more than 150 million items from third-party sellers during the fall Prime Day event held last year. For sellers, the best days of the holiday season are still ahead.
After nearly three years, brands are finally coalescing on a Fall Prime Day strategy. While many admit it won’t move the needle in terms of revenues, they see it as a way to optimize operations, such as offloading excess inventory or begin preparing for Black Friday and Cyber Monday. Where the July Prime Day sale is a two-day event meant to drive home profits in the second quarter, the fall promotion is becoming a more complementary part of the overall holiday season and a way for sellers to strategize their fourth quarter.
“It’s not a big profit driver, but it is a strategic business decision that benefits the business as a whole,” said Jon Elder, CEO and founder at Black Label Advisor.
Amazon’s fall Prime Day doesn’t rack up the sales that its summer counterpart normally does, but that doesn’t mean the event is a total wash. For example, Amazon’s October Prime event is an opportunity to offload stale inventory gathering dust in Amazon’s warehouses, according to Elder. The sale in October may not drive major profits for sellers, but they should still see a sales boost due to increased traffic that takes place during the period.
“Anything you can do to mature listing leading up to December 1 — from a review count, from a sales velocity perspective, even just learning more data about your customer on what they like and don’t like — is valuable,” said Elder. “Not a lot of opportunities exist to do that year-round, so sellers always jump on it.”
To Selom Agbitor , co-founder and chief revenue officer of tattoo care brand Mad Rabbit, part of the October sale’s softness stems from the fact that many shoppers are biding their time until Black Friday and Cyber Monday. Still, he said, “Our goal is to try to get to what we did during the summer Prime Day.” To galvanize their customer base, who may not even be aware of Prime Day in October, the brand sends out reminder messages ahead of the two-day event.
Ronak Shah, CEO and co-founder of the collagen brand Ovi, is taking a new approach to the October Prime Day event this year. That’s because he’s worried about cannibalizing sales when holiday spending shifts into high gear during the months of November and December when Obvi earns as much as 40% of its annual revenue. Last year, Shah aggressively pushed advertising and reminders to his customer base to drive traffic to Amazon during the October Prime sale. This year, however, he won’t publicize the event as heavily.
That said, Shah still plans to offer discounts of around 15% during the sales event, slightly lower than the discounts he offered during the summer Prime Day when customers could buy the collagen brand’s products for as much as 25% off.
However, brands shouldn’t be concerned that Prime Big Deal Days will cannibalize holiday sales, according to Jared Mason, vp of e-commerce at e-commerce accelerator Pattern. “We have actually found the opposite to be true,” said Mason. Brands last year that ran deals during both promotional periods — that is, during the Prime Big Deal Days and post-Thanksgiving — saw a similar lift in sales during the post-Thanksgiving period as brands that only ran deals after Thanksgiving.
Just having your listings optimized and ready to go ahead of Prime Big Deal Days can provide a lift of its own. “Brands we work with saw a 113% lift in revenue on PBDD last year if they ran a promo and a 39% lift if they didn’t,” said Mason. “So, while brands that ran a promo saw nearly triple improvement in sales over those that didn’t, those that didn’t run a promo still saw a lift in sales.”
Mad Rabbit’s Agbitor said the key to maximizing sales during the October Prime Day, without cannibalizing revenues during Black Friday and Cyber Monday is to mix up the brand’s offerings to keep customers coming back. For example, the brand plans to offer certain products sets through its direct-to-consumer website that aren’t available on Amazon during the peak holiday season. The brand is also releasing a new product in December.
For Judah Bergman, the CEO of Jool Baby, which sells baby products, including swings and changing pads, the October sales event is a lackluster affair. Last year, the brand’s sales lift during the two-day period was only between 10% to 20%. “I remember it was inconsequential,” said Bergman, citing considerably lower traffic compared to Amazon’s summer sales event. This year, the brand’s participation will be minimal. “We’ll maybe run an extra couple of coupons on things, but nothing that will make anybody running towards us so excited,” said Bergman.
Scott McIntosh, who sells a phone-slash-cup holder device known as Cell Phone Seat through Amazon, speculated that the reason the October Prime Day is relatively muted is because it’s still quite new. He’s optimistic sales will improve during the period as more customers become aware of Amazon’s fall Prime Day promotion. In the meantime, McIntosh is more focused on preparing for the peak holiday shopping period after Thanksgiving.
“Any time Amazon is going to push people to shop on Amazon, it’s going to be good for sellers,” said McIntosh. “But it’s so new, I don’t think a lot of people are going to be there.”
For most of the brands that Elder works with, Amazon’s October Prime Day sale only generates profits of around 5%, on average. “Sellers are expecting the 2023 record to be broken next month,” said Elder. “But they’re not expecting to make a lot of money.”