Written by Matthew Robertson, co-CEO, NetDespatch
Last week the retail industry witnessed the record Amazon Prime Day 2019. This two-day event has grown longer and more lucrative over the past four years, with global sales quadrupling between 2015 and 2018. This year, for the first time ever, it ran for 48 hours and the first 24 hours of Prime Day was the biggest day of the year for Amazon so far in the UK. In fact the event drew a record number of Prime members, who bought more than 175 million items, beating Amazon’s combined Black Friday and Cyber Monday business.
Last year’s global sales event was celebrated in 17 countries and, according to Amazon, was its ‘biggest in history’ yet, with more than 100 million products purchased, so this year’s sales have eclipsed that. To this point a new research report from Periscope by McKinsey entitled: “The Amazon Prime Day Effect: Consumer Anticipation and Excitement Grows in 2019” found that among 2,587 consumers there was an overwhelmingly positive feeling towards Prime Day, with 66% of respondents being either excited or eager to get engaged and 70% or more of consumers expecting to participate in this year’s shopping bonanza.
Over the two days, Amazon teamed up with brands around the world to offer new and special-edition products exclusively to Prime members. Prime Day also launched brand-new products available for pre-order, limited-edition items and never-before-seen collections that were available exclusively to Prime members on Amazon for a limited time.
A record 250 retailers offered their sales on Prime Day this year, about a 29 percent increase over last year. However, it is not all good news, some analysts are worried that other retailers may be cutting into their back-to-school sales, which dominate consumer spending later in the summer. Consumers who spend on sales in July may be less likely to shell out on another major retail event a month later.
Of course I am always interested to understand whether there were any delivery issues as sales peak to such incredible volumes. What I did find astounding is that one of the fastest Prime Now Deliveries was a Fire TV Stick delivered in just 12 minutes and 6 seconds to a customer in Newcastle, which is incredibly fast.
I was also interested to see whether there were any horror stories around failed or late deliveries, for two reasons. Firstly because Amazon needs to nail its first delivery for the hordes of new subscribers, and the bigger a success Prime Day is from a sales perspective, the greater the strain on Amazon’s supply chain, so how did it fare? Secondly because here at NetDespatch we provide an automated parcel delivery service to carriers and retailers, so I am always interested to understand whether delivery lived up to consumer expectations during peak times and how fast shipments and parcels are being delivered.
To date I’ve not seen any negative delivery stories, although there has been some negative sentiment on social media and in the news that appears to be around Amazon warehouse workers who seem to be somewhat disenchanted with the super-fast delivery service. Staff in Amazon’s warehouses are saying that the company's one-day delivery promise is putting them under too much pressure as Amazon doubles Prime Day length and halves delivery times.
Indeed, here in the UK GMB union members were protesting at the company's UK distribution centres and planning to protest at Amazon sites during Prime Day. Whereas Amazon will be using the event to see if its distribution centres can execute deliveries, especially when orders ramp up during the holiday season later this year around Black Friday and Cyber Monday.
There is no doubt that Prime Day’s impact just keeps growing. So while Amazon claimed this years’ Prime Day to be the most successful yet, there is a wider impact that should not be understated – Prime Day is delivering offline results. This is a huge step forward for brands building out omnichannel operations and looking to deliver service through a harmonious combination of eCommerce and in-store. If Prime Day 2019 is any indication, expect greater levels of crossover between offline and online pushes as retailers, whether digital or traditional Brick and Mortar, look to capitalise on their full range of assets. Therefore this doesn’t just mark a significant event for Amazon, but it is also marks a step change for the retail community as a whole.