Hallmark will never admit it, but let’s be real, they created Valentine’s Day so they could sell more cards. However, it wasn’t just Hallmark who benefited from Valentine’s Day. Flower shops, candy companies, and restaurants were all beneficiaries of this new “holiday.”
Amazon Prime Day is what I call a “digital hallmark holiday.”
Black Friday and Cyber Monday are events created out of thin air, but at least they are tied to a real holiday: Thanksgiving. Amazon Prime Day is in the middle of the summer, this year falling on July 15th, with no other corresponding holiday in sight.
Most interesting about Prime Day is that it didn’t just work for Amazon, it worked for other retailers who piggy backed on Prime Day to launch their own sales.
The good news for Amazon: Their hallmark holiday is working in their favor. Sales from its two-day shopping event surpassed its sales for last year's Black Friday and Cyber Monday events combined.
I was also surprised to see this headline pop up in my feed a day after their day one sales.
Basically, everyone is getting in on Prime Day. Target, Walmart, and Best Buy all launched their own sales on the same day as Prime Day, and they are all seeing positive results because of it.
Retailers that make more than $1 billion in annual revenues saw a 64% increase in their digital sales compared with an average Monday, according to Adobe Analytics.
This got me thinking. Is the common trope of “Amazon is destroying all retailers” true? Yes, some companies will be completely destroyed by Amazon, but I’m starting to change my viewpoint a bit.
It’s not a winner take all strategy as we all thought. Retailers that combine offline footprint with strong digital experience win.
Amazon wants you to use the app so you can spend more time shopping digitally, and not in retail stores. That’s obvious.
With the Whole Foods acquisition, they are now combining both online and offline worlds. Amazon created a new incentive last year in 2018 to get Whole Foods more foot traffic with a hard-to-refuse offer: any customer who spends a minimum of $10 at Whole Foods is entitled to $10 in online credit for Prime Day.
It worked. Whole Foods foot traffic on the Saturday before Prime Day was 22% higher than the average day between June and September of last year, making it the best Saturday of the summer.
What about some of the larger retailers? They are actually surviving and, in some cases, thriving. Here are some examples of how they are using digital and offline footprint.
“And why might Kohl's want to partner with its online competitors? Foot traffic and new customers. If Amazon shoppers go to Kohl's to make a return, perhaps they'll pick up a few items while they're at it.”
“Best Buy’s big turnaround isn’t spontaneous good fortune. It is the result of a smart strategy — Renew Blue – launched five years ago, which helped the company capitalize on its two competitive advantages, scale and location, to fend off competition from Amazon.”
“The bulk retailer has been adding lockers to its stores, with plans to add them to 100 more stores over the next four to five months to make buy online, pickup in-store more efficient, after rolling out the ability to order online from a Costco store to all of its stores last year.”
Stores fulfilled three of every four digital orders in Q4, which is “effectively doing the work of 14 fulfillment centers,” CEO Brian Cornell said.
Some of the larger retailers have started flexing a bit on their strengths, and it’s working. And if they happen to accomplish this by leveraging a completely made up digital hallmark holiday, then so be it.
So, while Amazon continues to amass Prime subscribers and look for new ways to destroy their competition, Prime Day is beneficial to everyone, not just them.
Amazon is changing consumer behavior with Prime Day and this is transforming how other companies use digital.
I’m pretty sure we’re at the stage of retail where retailers have no choice but to follow Amazon’s lead while utilizing their offline strengths. Amazon has single handedly reduced how many people leave their house (or sometimes even their couch) to go shopping at brick-and-mortar establishments.
This has several implications that I can think of:
- The mobile experience retailers give their customers becomes even more important than ever previously imagined.
- Designing experiences for new technologies should be first priority. For example, how are they using voice to interact with their brand? Is it a priority or does it exist on someone’s checklist to get done, and that’s it.
- Retailers need to re-think how digital plays a role in their offline experience. The retail location IS a valuable strength that they should utilize. Just like Kohl’s is using their space to return Amazon items, and Best Buy is using their space to feature technology items that need to be played with before customers purchase them.
In the end, retailers must be agile and open to new ways to use their digital footprint to enhance the overall customer experience.