It’s official – Amazon Prime Day 2022 will take place in July. While the exact date has not been announced, Amazon revealed the month in its Q1 Earnings Report released on April 28. This important detail was overshadowed by the fact that sales increased only 7% for the retail giant, a 37% decline from the same period last year. Amazon CEO Andy Jassy framed the performance around supply chain challenges, inflation, and the war in Ukraine.
This begs the question: what can sellers expect during Prime Day 2022? Fortunately, all signs point to a lucrative event. Despite what some analysts have described as a disappointing first quarter, Amazon remains an ecommerce juggernaut. Here are a few important stats that highlight the purchasing power of Amazon’s marketplace:
- More than 2 billion shoppers visit Amazon.com every month (Statista)
- Amazon Prime has 200 million subscribers (Amazon)
- 74% of shoppers begin their online search on Amazon (Jungle Scout)
- Amazon accounts for 41% of the U.S. ecommerce market (Statista)
- Prime members spend almost $2,000 each year (Bank of America)
What Previous Prime Days Can Tell Us About Prime Day 2022
The best way to predict what will happen on Prime Day 2022 is to examine the performance of previous events. Last year, shoppers spent a whopping $11.2 billion during the 48-hour mega sale. In a post-event statement, Amazon announced that Prime Day 2021 delivered the two biggest days ever for small and medium-sized businesses in Amazon’s stores worldwide. While the company shied away from boasting about sales records as it has in previous years, Amazon did confirm the following highlights:
- Customers spent over $1.9 billion on more than 70 million small business products during the promotional period, more than a 100% year-over-year increase in sales compared to the Prime Day October 2020 promotion.
- Best-selling categories worldwide for Prime Day 2021 included tools, beauty, nutrition, baby care, electronics including Amazon Devices, apparel, and household products.
- Tens of millions of customers viewed Prime Day product demonstrations and try-on hauls, heard directly from creators, and more during Amazon Live live streams throughout Prime Day.
- Prime members worldwide saved while gearing up for back to school, purchasing more than 600,000 backpacks, 1 million laptops, 1 million. headphones, 240,000 notebooks, 40,000 calculators, and 220,000 Crayola products.
Channel Key can confirm that our clients in the School Supplies category enjoyed strong sales during Prime Day 2021. As you can see in the table below, one of our brand partners in this category generated nearly $30,000 in sales against an ad spend of $5,341. By comparison, this same brand spent $4,159 on advertising during Prime Day 2020 to generate $16,911 in sales. We have compiled the following data from brands in five popular Amazon categories for a more comprehensive look into how our clients performed during Prime Day 2021.
Perhaps even more revealing is the overall trajectory of Prime Day’s growth since its launch in 2015. There have been seven Prime Days to date, each one more lucrative than the previous event. This is not to imply that YoY growth has been consistent. Prime Day 2021 sales grew just 10%, a sharp decline from the 45% YoY growth the prior year. However, it’s important to keep in mind that the past two years were far from normal. It is impossible to know what the 2020 to 2021 Prime Day growth would have been had the pandemic not accelerated the shift to ecommerce, resulting in a major spike that was bound to correct itself at some point.
This much is certain: Prime Day has set a new sales record each year. If the pattern continues as it has over the past six years, Prime Day could reach the $12 billion mark. This is an aggressive target, especially considering factors like inflation and supply chain logistics. But even if Prime Day falls short of this figure, it will still be the most important ecommerce shopping event of the summer.
Ensuring Your Brand’s Success on Prime Day 2022
While all signs point to a busy Prime Day 2022 in terms of customer shopping, brands need to work hard to ensure their own individual success. With approximately 2.5 million active sellers, the competition on Amazon is fierce – especially during Prime Day. Therefore, the first step to a successful event is to determine if a Prime Day promotion is right for your brand.
Remember, this is the biggest 2-day shopping event on the largest ecommerce marketplace in the U.S. It takes time and resources to stand out from other sellers. Even then, there is no guarantee you will hit a home run. It is prudent to examine previous Prime Days to understand what items sold well and what items did not. The most sought-after products typically fall under three main categories: 1) high-search items like electronics and devices, 2) mass-volume products that consumers need regularly, and 3) hot-ticket items.
Unfortunately, the latter is difficult to predict. In 2021, the top-selling products were the iRobot Roomba 692 Robot Vacuum, the Keurig K-Slim Coffee Maker, Apple Cider Vinegar Gummy Vitamins by Goli Nutrition, and Crest 3D White Professional Effects Whitestrips.
The point is: not all promotions on Prime Day are successful. If your product portfolio does not include items like those that have performed well in past Prime Day events, it might be wiser to save your resources for the holiday season.
The Essential 3-Phase Prime Day Advertising Strategy
Once you know what products you want to promote, it is time to execute the three-step advertising strategy designed to maximize traffic and conversions during each phase of Prime Day:
- Phase One: Promote Your Deals & Brand to Customers Researching Products
The lead-up to Prime Day is the time to highlight the value of your promoted products and brand to customers who are actively researching products. This will help make your promoted products and deals even more discoverable and increase conversions on the day of the event. You can also use this time to optimize your campaign inputs, such as audiences and keyword strategies, so that your campaigns are running at maximum performance on Prime Day.
- Phase Two: Convert Brand-Aware Shoppers Who Are Ready to Purchase
Customers are ready to purchase on Prime Day because they know the event does not last long. This is the time to utilize additional marketing levers to help maximize conversions among audiences that have already seen your ads. For example, you can remarket to audiences that visited your product detail pages before Prime Day to stay top of mind on the day of the event.
- Phase Three: Re-Engage Your Audiences at Scale to Maximize Sales
Brands often enjoy a “halo effect” after Prime Day ends. According to Adobe Digital Insights, retailers experienced up to a 50% increase in sales in the days following previous Prime Day events. To maximize sales during this time, promote complementary products to your existing audiences or reach new audiences who did not purchase your products during Prime Day through retargeting.
Prime Day Marketing Levers that Generate the Most Sales
Distinguishing your brand on Amazon during Prime Day requires an aggressive marketing strategy. Amazon provides a robust suite of tools to drive customers to your listings, maximize conversions, and increase sales. Below are five of the most popular Amazon promotions for sellers during Prime Day, along with our recommendations for this year’s event.
Similar to the coupons you receive in the mail, Amazon coupons provide a discount on select items. Since shoppers want the best deals on Prime Day, using Coupons can be an effective way to distinguish your products by offering additional savings. For example, Channel Key ran a 20% Off Coupon for a client in the Toys & Games category during a previous Prime Day, which improved conversions by 22%. Coupons are also distinguished with Prime Day badging, making them a terrific way to boost sales on both slow-moving and top-selling items.
- Prime Exclusive Discount
A Prime Exclusive Discount is a price discount available only to Prime members. Product offers with a Prime Exclusive Discount will show a discounted price with the regular price crossed out. Buyers will also see a savings summary in search results and on product detail pages. Prices adjusted for discounts are displayed on the Featured Offer detail page for Prime members. Since Prime Day is Amazon’s largest sale event of the year for Prime members, this type of deal is a cost-effective way to promote products to shoppers who are ready to spend.
- Deal of the Day
A Deal of the Day is an item that is discounted for one day only. These are displayed all day on the on the Deals page (and receive the highest placement), which is one of the most popular pages on Prime Day. Unfortunately, it can be difficult to run a Deal of the Day – especially during Prime Day. To be eligible, you must be a Professional Seller with at least five Seller Feedback Ratings per month and an overall rating of at least 3.5 stars. More importantly, you will need support from Amazon to get approval for this type of promotion.
- Lightning Deals
A Lightning Deal is a promotion in which a limited number of discounts are offered on an item for a brief period (usually six hours). Lightning Deals display a countdown ticker (and special badging on Prime Day), which establishes a sense of urgency. Sellers can apply for these promotions via their Seller Central dashboard. While the competition is high on Prime Day, Lightning Deals typically provide a significant sales boost for popular and top-selling items. That said, Lightning Deals can also take a significant bite out of your margin. In 2021, Amazon charged sellers a $500 fee to submit a Lightning Deal. You also need to factor in the cost of the discount. If you run a Lightning Deal for 20% off a product that normally costs $50, and you sell 100 items via your deal, that is $1,000 in “lost” revenue. Since shoppers expect the biggest deals of the year on Prime Day, you will need to run a significant discount to stand out from the competition and attract the attention of shoppers. For these reasons, running Lightning Deals on Prime Day might not be the best way to generate profitable sales unless you are promoting a product in high demand.
- 7-Day Deals
Formerly called Best Deals, a 7-Day Deal is a time-bound, promotional offer where an item is featured for a limited number of days on the Amazon Deals page. These deals are often compared to Lighting Deals because of the short term duration of the promotion. While sellers were able to run these offers in previous Prime Days, Amazon has discontinued 7-Day Deals for Prime Day 2022.