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BizReport : Ecommerce archives : July 16, 2018

How merchants can compete with Amazon

Amazon Prime Day is here, and with it comes a flood of merchants wondering what they can do to cash in on one of the biggest shopping days of the year. According to data from Walker Sanda nearly half of Americans are now receiving at least 1 package from Amazon each week, and for younger consumers (ages 26 - 36) 57% expect 1 to 2 packages from Amazon each week.

by Kristina Knight

The Walker Sands 2018 Future of Retail Report also shows that 19% of shoppers have use voice-controlled devices - like Amazon Alexa - to make purchases on the behemoth website. About 1 in 5 are buying Amazon private label brands.

With Prime Day here, what lessons can other merchants learn from Amazon's success?

"Amazon has continued to evolve its positioning since its first Prime Day in 2015, adapting to changing consumer expectations and retail industry trends. What started as basically a flash sale to drive site traffic has now grown into a multi-channel blitz of Amazon's private-label brands and in-store promotions, particularly with Whole Foods in the mix," said Scott Webb, President, Avionos. "Prime Day has now infiltrated the brick-and-mortar market and even looks a bit like sales put on by traditional retailers, like Nordstrom's Anniversary Sale or Macy's Independence Day Sale - just more adapted to today's online shoppers. This has been a growing change in Amazon's business model because today it's not enough for retailers to compete only online. We're seeing Amazon continue to recognize this changing dynamic as it further blurs the line between online and offline commerce offerings. I think this is one of the first of many years that we'll see Amazon expanding its Prime Day offerings into the physical space."

But, shoppers aren't just buying from Amazon on Prime Day. According to data from Bluecore about 20% of products that were discounted for Amazon's Prime Day were priced lower at competitor sites, and about half of retailers offered competing promotions on Amazon's Prime Day.

"Other retailers are increasingly jumping on the Amazon Prime Day bandwagon with competing sales of their own. Large ($1B+) and niche (sub-$5M) retailers will see substantial spikes in online sales during Prime Day due to increased conversion rates. In 2017, large retailers saw a 35% increase in sales on Prime Day, and we anticipate new records this year. Prime Day approaches on the heels of record online sales growth for Q2 2018 (14.6% YoY growth in the US). We expect strong online sales to continue throughout the year with a record back to school season surpassing $50B in online sales for the first time, driving over 16.1% year-over-year growth in Q3 2018 and a substantial increase in online shopping YoY for the holidays," said Taylor Schreiner, Director, Adobe Digital Insights.

Tags: Adobe Digital Insights, advertising, Amazon Prime Day 2018, Amazon trends, Avionos, Bluecore, ecommerce, ecommerce trends, loyalty marketing, Walker Sands

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