What Search Marketers Should Know About Amazon Prime Day
Prime Day is Amazon’s annual shopping “holiday” exclusive for its Prime members. The one-day event was launched in 2015 to commemorate Amazon’s 20th anniversary and created with a Christmas in July feeling, meant to drive sales on Amazon.com by offering Black Friday-sized deals and discounts to shoppers.
In the last three years, Prime Day has grown to exceed Black Friday sales on Amazon.com. With that growth, it has created a bit of a ripple effect in ecommerce sales.
So, what should you know as we enter year four of Prime Day?
Amazon Prime Day 2018: What to Expect
Prime Day 2018 Starts July 16
First off, Amazon’s marketing machine “primes” shoppers with pre-Prime Day deals, sales and a full-out media blitz of commercials, digital ads, and email blasts.
Amazon likes to build up hype and some mystery as to when Prime Day will be since it isn’t usually revealed until late June or early July.
Prime Day isn’t consistently held on a certain day of the week or an exact date. In 2015, it was July 15 (a Tuesday); in 2016 it was July 12 (a Tuesday); and in 2017 it was July 10 (a Monday).
This year, Amazon Prime Day will begin Monday, July 16 at noon PT, and feature “36 hours of deals.”
It sounds better than Black Friday – you can catch a great Lightning Deal without having to stand in line at 4 a.m. in freezing weather or risk being trampled.
More Shoppers Are Online
Prime Day also means that people are online, ready to buy and look for deals.
While last year’s Prime Day sales on Amazon shattered their own records for year over year totals (up by 60 percent), the biggest winner was actually Amazon itself, with new Prime sign-ups (with an increase in Prime membership cost this year) and Echo Dots flying out the door.
Better Deals & Selections on Shopping Categories
That doesn’t mean that marketplace sellers didn’t also see a benefit. Amazon has made vast improvements to offerings by category, avoiding more usage of the infamous 2016 and 2015 Prime Day hashtag of #primedayfail when shoppers were dismayed at finding only minuscule deals on items like toilet paper and wasted time looking at deals with $0.03 price increases.
This time, expect to see much more highly curated selections on in-demand categories like electronics, health and beauty, home goods, and toys than in previous years. (Last year, grocery was the lagging category.)
A quick note on the infamous Lightning Deals that not every paid search marketer might know:
- There is a standard fee for every Lightning Deal that a seller applies for (i.e., you ask Amazon if you can pretty please sell that particular item) during regular weeks of the year.
- The discount must be 20 percent or more of the original price.
- The fee for a Lightning Deal almost doubles per deal during Prime Day week.
- Sellers don’t submit a deal for consideration the way they do during the rest of the year, they log into their Seller Central accounts, see if they have been chosen and, if so, what items from their catalog that they can use for a Lightning Deal.
- Sellers must also be able to meet Prime fulfillment and delivery times (i.e., Seller Fulfilled Prime or participating in a program like Fulfilled by Amazon).
- This is in addition to category-based commission rates that range from 6-20 percent of the item price.
Now you may think to yourself, “and sellers PAY that?!” The answer is – yes. And in droves.
Paid Search Spending (Along with Conversions) Might Increase
So what does this mean for search and, specifically, Google Shopping efforts?
Well, what we saw at CommerceHub (Disclosure: I work for CommerceHub) during the first Prime Day 2015 is that campaign budgets ran through much faster than anticipated – especially for a seemingly random Tuesday in July, but specifically in the electronics, appliances, and home goods categories.
It wasn’t just spending that went up though.
We saw a directional increase in revenue and conversions as well. We ended up adjusting budgets for the month and pulling them forward for that day, but we were generally able to keep ROI where it should be.
We saw a similar effect in 2016, though more flat year over year (in terms of the amount of a spike), but still an upwards spike in comparison to “normal” July days.
For 2017, Andy Taylor of Merkle has what we think is the best analysis specific to search, noting that:
- Overall conversions were up.
- Average order value was flat or down, especially on mobile devices (where traffic was significantly up).
- Search Partner network traffic being served on Amazon was significantly up. That does not seem like it will be the case again this year, as Amazon has been keeping more of that real estate for their own advertising programs and not having users leave the site.
How to Prepare for Amazon Prime Day 2018: A Checklist
Given all this, to get ready for Prime Day 2018, here’s a short checklist you’ll want to consider:
- Know when Prime Day is: Stalk the site during the week of and during. Know what was for sale and how fast it sold out, what categories and if the discounts were “whoa!” or “ho-hum.”
- Note the categories and groupings of products together during Prime Week: These are carefully curated to increase basket size and upsells. For example, last year the “most-shopped themes” were Pet Lovers, Gardeners, For the Home. What can you “borrow” for your own efforts on site or in ads?
- Start watching your traffic/spend the week before: As Prime Day Week kicks off, you may see a drop off as sales pull back in anticipation of The Deal that your target market is looking for on Amazon (but should still see traffic volumes be somewhat steady, because, you know, comparison shoppers).
- Plan for an increased need in budget on Prime Day: Pull your numbers from the last three years for the Prime Day weeks and look for trends or indicators that can help.
- Look at what the deals are as soon as you can: See what you can match or at least where you can run a competing promo. As a Lightning Deal runs out, if a shopper still wants the item, they may be willing to give you the $3 rather than not have it at all (you’ll have to be fairly agile on this one).
- If you have an email list or promo calendar that’s not set yet or can be adjusted, make sure to be on schedule for that week: Don’t have it be a “meh” type of offer or be silent. And make sure that the products you’re offering are in stock and POPULAR. This isn’t “get rid of stuff” week – treat it like you would Black Friday.
- Know that your remarketing efforts may get wonky during the following weeks: And, most likely, will see increased spend and a lower ROI, since you won’t be able to tell if they bought on Amazon.com instead.
- Focus on Post-Prime Day remarketing efforts or an increased budget push: Find categories that did not have big deals or ran out quickly. This will be a great place to focus for the rest of July.
- Do a post-Prime Day lookback: If you are (or someone you know is) doing Sponsored Ads or Headline Search Ads on Amazon for yourself or a client during Prime Week, make sure to do this and see what you can steal for any digital channel going forward.
- Optimize for voice search: Thanks to last year, in particular, there are now a lot more Amazon Echos out there that will be offering up Alexa-only Prime Day deals, especially on CPG products. (Probably seeking redemption for the 2015 55-pound tub of water-based lubricant and the 48-pack of Quilted Northern toilet paper #PrimeDayFail deals.)
Why should we assume that we’ll see anything this year like we did last year or in the future?
Well, Prime Day is basically becoming the American version of China’s Singles’ Day.
Unlike the holidays where we have to pretend to be shopping for others (c’mon, we know about the self-gifting trend), this is an out-and-out “Treat Yo’ Self” kind of time. They are literally giving us the excuse!
Also, Amazon is already pushing their own Fire TV, tablet, and Kindles onsite,
Major retailers like JCPenney, Kohl’s, Toys R Us (R.I.P.) and Macy’s did trot out their own “me too” deals last year. Expect similar efforts this year as well, with emphasis on benefits, like no membership required, unique brands or exclusives and customer experience, to avoid a total race to the bottom.
And you know what that means – expect to see that if you’re in competition with any major retailers for those in-demand categories, their budgets will increase and, with that, your CPC as you try and keep up.
The most important thing you can do?
Make sure you have a Prime Day strategy, whether that’s to jog alongside, sprint to surpass, or stay at home on the couch, just don’t forget that it’s coming.