Some of the discounting has already begun, with Calvin Klein and Tommy Hilfiger offering 20 per cent off their apparel items, Norton discounting its 360 Deluxe antivirus software by 72 per cent and Amazon slashing prices on a range of Echo devices by up to 70 per cent. Echo products are typically the top-sellers on Prime Day.
Last year, Prime Day generated more than US$3.5 billion in sales for small and medium-sized businesses on Amazon, a 60 per cent increase from the previous year. But it’s hard to say what that means for Prime Day this year, since the 2020 event was held in October due to Covid and likely benefited from pre-Christmas shopping.
We asked three retail analysts to weigh in on the categories that will be most in demand, the supply chain challenges that could impact brands and how to handle the increasingly crowded shopping calendar.
Global awareness is growing
Amazon held its first Prime Day in 2015, when Prime members were largely based in North America and Europe. Since the online retailer has expanded its loyalty program to Australia and other markets in the Asia Pacific region, awareness of the event has increased.
“I think Prime Day in Australia has significantly grown in awareness, particularly over the last year and especially off the back of Covid,” Trent Rigby, senior strategist at Retail Oasis, told Inside Retail.
“Whilst Amazon Prime Day here in Australia might not be exactly [where it is in the US] yet, I think that over time, it’s likely to be one the biggest Australian sales periods in the year.”
“If you look at what’s happened here in Australia over the last few years with Black Friday and Cyber Monday, these were traditionally American shopping events. However, they have now established a solid place in the Australian retail calendar.”
But in countries like Singapore, the retail calendar is more crowded, where regional shopping events, such as Singles Day (11.11), 12.12 (December 12) and 9.9 (September 9) have a stronger foothold.
Homewares will be hot
According to Amazon, home, electronics and nutrition and wellness were some of the top Prime Day categories last year, and most analysts expect the same will be true this year.
“With the growth that household and soft furnishing categories have experienced over the past 12 months, this would definitely be a category to watch,” Michelle Grujin, Accenture’s managing director of retail for ANZ, told Inside Retail.
“Health and wellbeing will also continue to dominate as an enduring shopper preference during and post Covid.”
Grujin also expects the return of events will see occasionwear sales rebound in the apparel sector.
Lingering supply chain issues could cause problems
While Amazon has undoubtedly prepared its logistics network for record Prime Day volumes, the impact of factory closures and reduced air travel on stock levels and lead times could still create problems for sellers.
“The supply chain challenges that we are seeing in the market such as significant container rate rises and longer lead times for product are impacting customer delivery promises due to poor availability of some items,” Matt Darby, KPMG’s national retail lead, told Inside Retail.
“The material shift to online that we have seen over the last 18 months will provide more demand for the event and sellers will be ensuring that their promises made should not be impacted by inability to deliver – we are seeing consumers react negatively to poor experiences in the last mile,” he said.
“Fulfilment is something that Amazon excels in typically so we have to expect that they have factored this and their logistics investments are testament to that.”
Juggling multiple shopping events is the norm now
Depending on the market, this year’s Prime Day will happen at the same time as other major shopping events. There’s the annual Great Singapore Sale in Singapore and End Of Financial Year (EOFY) sales in Australia, both of which occur in the month of June. It’s also a time of year when retailers traditionally clear inventory in anticipation of shopping events in the second half of the year, such as Christmas.
So how should retailers approach Prime Day if they’re already participating in other sales? Darby suggests leveraging the eyeballs to boost interest in your own brands, products and services, rather than trying to offer the lowest price in the market. Rigby recommends using Prime Day as a test for EOFY and Black Friday/Cyber Monday sales later in the year, while Grujin believes brands need to stay true to their values and double down on their commitment to environmental causes to appeal to conscious consumers.
One thing they all agree on is that retailers cannot afford to ignore it.
“It is something that cannot be ignored but be confident in your customer value proposition and focus on what your customers need,” Darby said. “It is an opportunity to boost sales and interest if you approach it appropriately.”