Prime day 2018 – Can Prime Day thrive without a fresh hit?

With Amazon’s fourth annual Prime Day upon us, we wanted to take a look back at what we’ve seen in years past and speculate on what Prime Day 2018 might hold in store for us. Prime Day, which first launched in 2015 celebrating the 20th anniversary of the founding of Amazon.com, has become a key sales day for Amazon, goosing sales in an otherwise slow part of the year, allowing Amazon to stress-test its fulfillment system five months ahead of the holiday season, and as a draw to bring in more Prime members. By all measures, Prime Day has been an overwhelming success. 

Prime Day was the biggest sales day for Amazon in 2016, with sales in a dead heat with Cyber Monday of that year. In 2017, Prime Day was 38 percent larger than Cyber Monday of that year, and 32 percent higher than Prime Day in 2016. This is no ordinary sleepy summer day.

The trick with sale events, though, is that they can potentially cannibalize sales before and after the sale, as consumers’ finite dollars have been spent. Anyone that bought an Echo device last week, for example, made a big mistake because we all knew that they were going to be aggressively priced on Prime Day. When we dive into the data, though, we don’t see evidence that Prime Day sucked any of the oxygen from the rest of Amazon’s summer. 

Amazon.com’s share bounces around between 30 and 40 percent of e-commerce, interrupted by the Prime Day sales spike, where Amazon.com enjoyed 69 percent market share. In fact, Amazon’s share averaged 32 percent between September 2016 and May 2017, compared with 33 percent share between June and August 2017, excluding Prime Day and the days immediately before and after. In short, we do not see evidence that Prime Day is hurting sales before and after Prime Day. Our own anecdotal datapoints aside, the sales seem to be additive, not cannibalistic.

There is a wrinkle, though, for Prime Day 2018. In years past, Amazon benefitted significantly from a surge in demand for new Echo devices. But this year, there isn’t a new, or even new-ish Echo device available, which means that sales volume will need to be driven by older Echo devices, Kindles (nothing notably new there, either) and sales from products not manufactured by Amazon. In 2017, three of the top five selling Prime Day items were Echo devices. 

For Amazon to drive as much growth on Prime Day 2018, it will need to see continued interest in its own older products as well as growth from products not manufactured by Amazon. Odds are that other brands will pick up the slack for Amazon given the proven success that Amazon Prime Day has demonstrated in years’ past. But we’re eager to see how things shake out. 

Stay tuned.

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