Analysing Amazon Prime Day 2017

Friday July 14, 2017 | Posted at 10:46 am | By Martin Turner
July 14, 2017 @ 10:46 am
amazon echo box.jpg

So the third Amazon Prime Day has come and gone, and with it the whirlwind of sales activity. It was announced by Amazon to be the biggest sales day in the ecommerce giant’s history, repeating the feat of the 2016 installment.

It’s tricky to get solid numbers from Amazon to find out how much of these sales came through third party business sellers, but using our own platform data we’ve got some interesting figures that shed light on the nature of Prime Day 2017.

Sales Boost

Unsurprisingly, businesses trading with Volo on Amazon experienced a significant uplift in sales. Over the whole group, we saw a 24.3% increase in Gross Merchandise Value (GMV, the total value of goods sold) compared with the previous Tuesday. Key sector winners were Electronics & Tech which saw a 50% increase and Home & Garden, which increased by 25%.


2017 versus 2016 for Marketplace Businesses

The biggest surprise was finding that our data indicates a drop-off in revenue compared to 2016 for merchants on Amazon. Prime Day 2017 3rd party GMV dropped 16.7% year-on-year per our data. Part of the reason for this might be the dominance of Amazon’s deals on its own technology – always prevalent on peak shopping days, but never more so than this one.

The best-selling item across the marketplace on the day was the Echo Dot, and Alexa powered gadgets, smart home tie-ins and Kindles dominated the front deals page.

This isn’t to say it was a bad day for merchants of course – even those not on Amazon could benefit. eBay and Walmart ran competing events, and our data shows eBay merchant revenue slightly rose by 1.4%on the day, compared to the same day the week before.

Back on Amazon, shopping habits remained largely unchanged in terms of what was purchased – electronics and tech goods, especially big ticket items that were discounted, saw an increase in sales, just like 2016.Geographical Differences

Shoppers in the UK spent 32% more on 3rd party goods from Amazon on Prime Day than the previous Tuesday – clearly a welcome boost for ecommerce businesses trading on the platform. U.S. consumers outstripped this result however with an impressive expenditure increase of 41%.So Why the Year-on-Year Gap?

A combination of factors seem to have lead into the drop in merchant benefit from APD. As discussed, Amazon foregrounded voice tech devices like the Echo Dot extremely heavily, with 50% discounts and priority positioning in landing pages.

The reasons for this are clear: Amazon will happily make a loss to get an Echo device into more homes. The long term value is so high that the business is almost paying to put them in consumers hands. Strategically, Amazon appears to think of voice as the next generation of user interface where ecommerce is concerned.

Having been well ahead of the game when it came to the mobile-first shopping trend, who is to deny that they are now leading the field in voice commerce?  

alexa amazon echo dot.jpg

But back to why Prime Day was less impactful for 3rd party businesses this time round. Here again some blame may lie at Amazon’s door – social media criticisms sprang up soon after the beginning of the 30 hour shopping event as shoppers felt the deals were underwhelming.

It’s worth noting that the addition of six extra hours makes data capturing slightly more complex – clearly, some purchases slip off either side of the July 11th official Prime Day. It’s noticeable that 3rd party business sales on the 10th were significantly stronger than the 3rd, for example, and it’s not unreasonable to attribute some of that to the advance deals and early start of Prime Day 2017.

All in all, Prime Day is absolutely not going anywhere for the time being. Marketplace sellers who are aware of the scale of opportunity and carefully prepare still benefit hugely from the traffic boost; and Amazon still puts up huge numbers when it comes to its birthday celebration.

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