7.16.2015


Signals can be difficult to differentiate from noise, but the early returns from Prime Day look positive for Amazon.

Social media has not been positive. Criticisms and complaints abound.  

But both Amazon and third party sources seem to agree the promotion significantly increased traffic.

From TechCrunch:

According to ChannelAdvisor, for example, Amazon’s daily sales in the U.S. were up around 80 percent as of noon Eastern over last year’s figures, and sales were up 40 percent in Europe. In addition, Amazon’s mobile applications saw significant movement up the charts on iTunes and Google Play on Wednesday because of Prime Day. For instance, the U.S. iOS app jumped from No. 21 Overall yesterday to No. 5 today. In other words, consumer demand was ripe for Prime Day. Users were either downloading the app for the first time, re-installing it, or installing it on a new mobile device where they hadn’t yet added it.

Once the app is installed, the likelihood of a return visit -- and purchase -- is significantly increased. Once Amazon Prime is purchased, continued buying is seriously incentivized.

This is, among other things, a major supply chain play.  Prime perquisites, such as free shipping, are sustainable as the Amazon fulfillment network is optimized. Especially in dense urban environments there is underutilized supply capacity to deploy at low marginal cost.

There is also evidence accumulating that Prime has been especially effective in driving third-party-sales, which benefits Amazon without increasing inventory cost.

Supply and demand networks are optimized by "owning" the demand channels in such a way that consumer patterns can be anticipated and effectively influenced.

No comments:

Post a Comment