The time has come. After months of delays and speculation, the most anticipated online shopping event of the year is finally upon us. Amazon Prime Day 2020 is set for October 13 and 14. Since its launch in 2015 to celebrate the 20th anniversary of Amazon, Prime Day has continued to set records. Despite a pandemic – or perhaps because of it – this trend is expected to continue. A new report by eMarketer estimates that this year’s Prime Day will generate nearly $10 billion in sales worldwide, a 43% jump from 2019. This is even better news for Amazon sellers in the U.S., who are expected to rake in $6.17 billion in revenue over a 48-hour period.
While these figures shed a light of optimism over an otherwise gloomy year, the true significance of Prime Day 2020 might not be measured by data from the actual event, but rather, by the shopping momentum it creates moving forward. Below Channel Key has outlined the key factors that make Prime Day 2020 different from the ones before it, and more importantly, how it may redefine the holiday shopping season as we know it.
Amazon Prime Day Kicks Off Holiday Shopping
Under normal circumstances, Black Friday is considered the beginning of the holiday shopping season. Of course, 2020 has been anything but normal. COVID-19 has thrown a wrench into everyday life, including consumer shopping habits. More on this in a bit. First, it’s important to understand how the timing of this year’s Prime Day will yield a different shopping trajectory than past years – namely, the holiday season.
Previously, Prime Day has always taken place in mid-summer. This was no accident. July has traditionally been one of the most sluggish shopping months of the year, making it the perfect time for a mega sale that is guaranteed to boost much-needed activity for retailers. This year Prime Day is in mid-October, which will effectively jumpstart the holiday shopping season more than a month ahead of schedule. On October 5th, Amazon released its annual gift guide, a holiday-themed storefront featuring a wide selection of curated gifts. The launch comes several weeks earlier than its 2019 release and, not coincidentally, is just in time for Prime Day.
Data is already supporting an early start to holiday shopping. In its annual holiday sales forecast, global consulting firm AlixPartners included October in its definition of the holiday-shopping season for the first time. The report argues that the “official” November-December definition is “meaningless” this year – and perhaps forever – due to COVID-19’s dramatic effects on shopping behaviors.
Meanwhile, a National Retail Federation survey in September found that 46% of consumers plan to start their holiday shopping in October, while a Digital Commerce 360 and Bizrate Insights survey found that more than 68% will have begun their holiday shopping by November.
Online Shopping Is at an All-Time High
Another important factor that impacts the significance of this year’s Prime Day is the rise in online shopping. Social distancing, stay-at-home mandates, in-store capacity restrictions, and fear of contagion have forced many people to shift their shopping routines to online platforms like Amazon. This surge in e-commerce, combined with the timing of Prime Day, could be the perfect catalyst for a record-breaking online holiday shopping season.
While analysts vary on exactly how much online holiday sales will grow this year, virtually all agree that the rise will be considerable. According to a Glassbox Digital/Google survey, 70% of consumers plan to do most of their holiday shopping online this year. Deloitte forecasts that e-commerce sales will grow by 25% to 35% YoY this holiday season, compared to 14.7% in 2019. Most recently, an October Salesforce report estimates online sales to hit all-time highs over the next three months with the following holiday shopping forecasts:
- Online sales will reach $5.1 trillion globally and $730 billion in U.S.
- Online sales will grow 34% YoY (up 12% YoY from 2019)
- Online sales will account for 30% of total retail sales in the U.S.
The Amazon Prime Day Halo Effect
Prime Day 2020 technically will last only 48 hours, but its effects likely will span the entire holiday shopping season. As with past years’ events, businesses often enjoy a halo effect after Prime Day is over. According to Adobe Digital Insights, large retailers experienced up to 50% increases in sales in the days following past Prime Day events. This year, the Prime Day halo effect will coincide with the largest shopping season of the year, which could mean even bigger business for online retailers leading up to the holidays.
Above all, Prime Day will provide key insights into consumer shopping interests and habits that brands can use to maximize the halo effect throughout the holiday shopping season. Channel Key advises businesses that participate in Prime Day promotions to pay close attention to campaign performance metrics; not only sales figures and marketing costs, but what worked and what didn’t. For example, your promotions may increase organic searches and sales for certain non-promoted products, which might be amplified with Black Friday or Cyber Monday campaigns. Your Prime Day promotions data will also help you understand what type of campaigns, ad formats, keywords, and other targeting parameters resonated most with shoppers. All this important data will give you valuable insight that you can use to better harness the purchasing power of Prime Day throughout November and December.
CHANNEL KEY TAKEAWAY
Prime Day 2020 is unlike any of the ones that came before it. We’re in the middle of a pandemic, it’s set in October instead of July, consumers are shopping differently, and the holidays are right around the corner. These are major factors that, together, could make this year’s Prime Day one of the most influential events in the brief history of online shopping. At the very least, digital sales over the two-day event will most likely break records. Beyond that, Prime Day could set in motion a new pattern of holiday shopping that starts well before the traditional Black Friday kickoff. One thing is certain: online shopping is at an all-time high and platforms like Amazon will continue to play an important role in the way businesses reach consumers. For brands with strong digital marketplace strategies, the holiday shopping season will truly be the most wonderful time of the year.
About Channel Key
Channel Key is a full-service channel management marketplace consulting agency that has helped generate $250M in Amazon sales for retail brands around the world. Complete 360-degree services include marketplace strategies, content development, marketing and advertising, catalog management, marketplace and fulfillment setup, ongoing consulting, and much more. To learn about how Channel Key can help increase sales for your business, contact us today for a free consultation.