6 Ways Prime Day Will Look Very Different This Year

As Amazon’s sixth annual Prime Day approaches, so does the unofficial start of the 2020 holiday shopping season. Much remains to be seen, including how much consumers are willing to spend before Halloween and how this will impact the remainder of Q4. If 2020 has taught us anything, it’s to expect the unexpected. But we can expect to see a handful of big changes among brands, retailers and consumers. Brands will spend even more on advertising Prime Day in October gives brands the ability to message consumers earlier about holiday deals, which may result in higher ad spend overall. That’s because the brands that do well on Prime Day will see such a high return on ad spend (ROAS) they’ll decide it’s worth going back to the well for Black Friday and Cyber Monday, said Eric Heller, executive vice president of marketplace services at Wunderman Thompson. At Amazon’s Accelerate event in September, he said the platform told brands and third-party sellers to plan for two to four times their regular ad budgets and to start advertising early. “They’re telling brands and third-party sellers to really invest on Prime Day,” he said. “Of course, that’s what you need to do to get above the fray, but once you’ve spent in October, it’s not like you’re going to say you won’t allocate additional money on Black Friday and Cyber Monday.” And these advertisers aren’t just moving the budget they would have spent in July. “What we already know is they already spent anyway because Amazon had so many peaks in consumer spending [earlier this year],” Heller said. “I think this is upping the percentage of revenue Amazon is taking in through media.” Consider this a holiday season advertising marathon Elizabeth Marsten, senior director of strategic marketplace services at Tinuiti, noted this has been a particularly challenging year for brands to meet deadlines on offers and to get creative ready as a result of both the Prime Day delay and ambiguity on dates. “Strategy has evolved to cover this and Q4 as a marathon and less of separate sprints the way we might have looked at some of these key dates in previous years, especially with the economic hardships that some consumers have had to face this year in particular,” she added. But Amazon still has the power to move customers into a confident buying mindset, which marketers should take advantage of over the next two months. That’s according to Jon Maxson, senior director of SEO at iCrossing, who said brands should optimize their Amazon product presence for maximum potential rank, but they can also supplement their organic presence with paid media in categories where costs may be lower than in past years and where competition demands a more robust presence. “Given the amount of fluctuation in the marketplace this year, it’s more critical than ever to coordinate organic and paid media efforts to maximize the incremental return on tight budgets and deliver the best possible total digital results,” Maxson said. Consumers will be more wary Following headlines about fraudulent products, Zach Weinberg, director of Gartner's Amazon advisory group, said he suspects customers will approach their Prime Day purchases more carefully than in years past. “I think that consumers will be even more scrupulous this year on Prime Day with regard to their choices and what they will purchase from known brands versus unknown brands on the Amazon Marketplace,” he said. That also includes brand-name products from unauthorized sellers. “I think consumers have become more discerning because of all of the news around this specific topic,” Weinberg said. “And I think that there may be a consolidation on Prime Day this year around … the known brands as opposed to some of the more rogue third-party sellers.” Amazon will see more direct competition According to RetailMeNot, more than 300 retailers offered midsummer sales in parallel with Prime Day last year, and the site expects to see “the same or more” this year. But while sales in previous years didn’t overtly acknowledge Prime Day with names like Deal Days or Black Friday in July, Weinberg said, we’re seeing more direct competition now as rivals try to capture some downstream traffic. “I think the fact that so much online traffic has started shifting, very, very excessively to dot-com purchasing … you will get many, many retailers trying to figure out how they can capture as much of that as possible,” Weinberg said. In fact, he expects a minimum of 10% growth on the 300-retailer figure from last year as more retailers try to take advantage of the early start to the holiday season. The good news for retailers is there should be plenty of holiday shopping to go around. “I think that retailers will be able to capture a lot of new sales during the holiday time frame, simply because people have tried new ways of shopping,” Weinberg said. Heller agreed Amazon’s halo effect extends beyond just encouraging additional promotions to actual sales as other retailers capture spillover traffic, especially when Amazon runs out of products and shoppers seek them elsewhere. The good news for consumers is we’ll likely see discounted prices from Prime Day through the holidays. “Brands will be the biggest losers depending on their retailer agreements, because if they have merchandising deals set up, every other retailer is going to price match and drive down price,” said Andrew Ruegger, executive director of commerce and data science at GroupM. Brands will have to think bigger than Amazon Brands will have to expand their Prime Day strategies this year to include tangential sales. “I think Prime Day in some ways is identified with Amazon the way Kleenex is identified with tissues,” Heller said. “But the reality is just like Kleenex. It kind of is the word that applies to a sale that spans tons of retailers.” So if shoppers find a product is out of stock at, say, Amazon, they’ll likely find the same deal elsewhere because most big ecommerce platforms have web crawlers that scan prices in order to match each other. “You can’t just think Amazon or you will fail,” Heller said. “Consumers can co-shop, and they will co-shop. If you only thought about getting inventory to Amazon and not whether Walmart will pick the deal up, you’ll lose.” Amazon is willing to take a $50 hit per Prime member This year, Prime members can earn up to $50 in credits to use on Prime Day by spending $10 apiece at physical stores including Whole Foods, Amazon Fresh, Amazon 4-Star, Amazon Go or Amazon Go Grocery, and Amazon Books or Amazon Pop Up. Each $10 purchase will net a $10 Prime Day credit. (The Whole Foods credit is also available for online purchases.) In addition, Amazon is offering a $10 Prime Day credit for members who spend $10 on items sold by select small businesses through Oct. 12. Heller called the credits “an incredible thing” that demonstrate Amazon is eager to grease the skids. “[Amazon is] really trying to get consumers to spend now on this day and is investing heavily,” he said. “Up to $50 a consumer is a lot of investment.”

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6 Ways Prime Day Will Look Very Different This Year

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Brands will spend even more on advertising

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