Amazon Prime Day furthers New Retail Ecosystem

We are no longer strangers to Amazon's disruptive growth, in 2015 alone, according to Forrester Research, Amazon accounted for 60% of total U.S. online sales growth. 

Amazon Prime day, held for the second time, is showing how this new retail culture is taking over mainstream sales creating even more ripples in the retail landscape. 

Amazon Prime Day this year was 60% bigger than last year's sale catering to prime members even greater one-day discounts. 

SMALL BUSINESSES GET A BOOST

The new tradition of a Tuesday in July, also showed a 30% increase over last year for items sold by small businesses and sellers on Prime Day. For many small retailers Amazon Prime day felt like Black Friday.

BREAKING RECORDS AGAIN 

• Amazon just had it's biggest one day sale ever. 
• 2x as many deals as last year
• Selling nearly triple the 14 million products of the 2015 inaugural event. 

To give a bit of context here, in 2015, 1 in 10 US internet users joined Amazon prime on Amazon Prime Day last year. Since shoppers must join the $99 annual Prime program to access Prime Day deals, the layers of deals and profits here is very strategic as Amazon continues to grow as the go-to ecosystem for online shopping in North America. 

AMAZON GETS CUSTOMER RETENTION 

That these events draw millions of new customers to Amazon is not surprising, what is, is how valuable and addictive consumers find it. With 91% of first-year paid subscribers renew for a second year, and 96% of second-year paid subscribers renew for a third year, Amazon has consumers wrapped around its disruptive little fingers. 

However more context is required here: 

• Amazon Prime members are highly lucrative
• The annual spending of Prime members accounts for close to 60% of the company’s gross merchandise value, according to a recent Deutsche Bank note.
• The average prime subscriber spends $1,200 per year, versus the $500 of non-Prime members. 

This is why Amazon Prime Day is such a huge key in Amazon's strategy to grow ever faster and even bigger. 

70% of U.S households with annual incomes over $112,000 have a Prime membership. 

• 75% of Prime members convert when visiting Amazon's website, compared to the baseline of just 13% of non-Prime members. To say that Amazon prime membership is valuable to consumers, would be an understatement! 
• Amazon Prime is connecting sellers and shoppers more seamlessly than ever. With third-party sellers account for 9-12% of Amazon's total annual revenue.

“We want Prime to be such a good value, you’d be irresponsible not to be a member,” Amazon founder and CEO Jeff Bezos

• Prime Now [free two-hour delivery] is currently available in 37 cities, and Same-Day Delivery is now is 28 cities.
• Amazon Prime isn't just about deals but about speed of delivery. 

Since 40% of consumers prefer same day delivery, how much is speed part of the convenience factor? Amazon is gambling on it being a lot. The reasons to be a Prime member are becoming persuasive. Amazon is taking value-based loyalty to the next level of integration with home and video services. 

VOICE SEARCH AND PUSH CONSUMABLES DIFFERENTIATE BRAND

Amazon's Echo, Echo Dot and Amazon Tap devices are becoming synonymous with the brand. These technologies are pioneering a new way of relating to shopping, with Amazon additionally capitalizing on the Prime Day frenzy to promote its Dash buttons. The Wi-Fi-enabled devices allow customers to replenish common household and office goods with a simple button push.

• Asking Alexa or pushing a button for consumables is a new level of convenience right from the comfort of our homes. 

Amazon Prime Day was a great success, despite ordering issues, Amazon's shares over the last year highlights its strength. 

Did you participate in Amazon Prime Day and do you find Alexa or dash buttons useful?