The importance of Amazon Prime Day

Amazon celebrates its second Amazon Prime Day, which is being called one of the major events in e-commerce, alongside other dates, such as Asia’s Singles’ Day. Last year, Alibaba alone sold that day 14,300 million dollars in 24 hours, a 60 percent growth over the previous year’s figures.

The first Amazon Prime Day was held last year, ostensibly to mark the company’s 20th anniversary. However, once it saw that sales outperformed Black Friday, which has spread around the world after its huge success in the United States (even though it makes no real or intuitive sense considering that Thanksgiving Day is as American as apple pie), the decision was taken to make it an annual event.

For Amazon, the day is an opportunity to move stock sitting in its warehouses: some offers are available throughout the day, others are just for a certain amount of time or until a particular item has run out, all of which allows the company to take decisions in real time based on sales and to move things from its shelves that have been sitting there too long.

But besides that, the real interest of the Prime Day for Amazon is different: this is no ordinary sale, and only Amazon Prime subscribers, people who pay an annual flat rate for a series of services such as advantageous access to logistics or to catalogues, along with special offers. Prime subscribers are a very important and fast-growing segment for the company, given the huge popularity of Amazon Prime among high-income households that, once they pay for the flat fee, tend to consume around twice as much as before. This is the real reason Amazon has decided to roll out the event again.

From the moment a household starts to pay its Amazon Prime subscription, the company knows it is going to buy more goods than non-subscribers, and Amazon has seen that renewal of the subscription is almost guaranteed. The company puts a lot of care into analyzing its customers’ behavior, and it knows that its Prime Day is a winner that it will doubtless repeat year after year.

In short, Amazon Prime is a great way to consolidate a date with e-commerce similar to traditional, retail, events, while at the same time it’s a way to get more out of a group of subscribers that are driving growth.

(En español, aquí)