Updated for 2020
Even though this year's Prime Day took place in October instead of July, and many things about our day-to-day-life remain different from last year's, we do think some trends will hold.
For example, in 2019, even Amazon sellers not offering a deal said sales increased compared to other days in the month. Other retailers large and small saw a spike in their U.S. e-commerce sales, too.
The event still puts shopping top of mind and creates a broad halo that can benefit all brands, whether or not you offered a deal on the shopping holiday. That's why everyone should be paying attention to your Prime Day performance.
Did you effectively capture the opportunity to grow sales? What was the event’s impact on your business? What clues does it provide about the future? Read on for the top metrics you should watch to evaluate whether you sunk or soared this Prime Day, and prepare your team for the next major shopping holiday, just about one month away.
This one is fairly obvious, though you can't compare Year over Year (YoY) sales during the same time period like you normally might. Comparing Prime Day 2019 to 2020 might be more helpful, though you still have to take into account this year's changed economic conditions and how the delayed timing might lead consumers to just wait for Black Friday.
Even if you're just looking at this year in isolation, you should focus on the ten days leading up to Prime Day and the ten days after Prime Day, in addition to Prime Day itself.
Many consumers start browsing on Amazon in anticipation of Prime Day, up to two weeks before the actual event. While they’re on the site, they may find items that they want or need immediately, or simply become impatient and choose to buy without waiting to see if there’s a Prime Day deal.
Conversely, there may be consumers who find your product on Prime Day and don’t purchase immediately. Perhaps they think they don’t need it, or just get distracted by something else. Either way, they’re now thinking about your product, and may later decide to buy it.
An important related metric is the conversion rate from page views to sales. If people view your product but don’t convert right away, there’s opportunity in the following days and weeks to re-engage and convert them. You should continue to closely monitor this metric after Prime Day, and how it compared to the prior year, to ensure you’re fully taking advantage of the extra eyeballs generated by the event.
In addition to reviewing your sales on Amazon, it’s important to analyze your sales across all your retailers, online and in-store. With other retailers running their own deals to compete with Prime Day, the event drives increased website traffic and sales across e-commerce. If consumers go to pick up online purchases in store, that could also lead to incremental sales.
Importantly, you want to review sales across all channels in aggregate to understand whether Prime Day is benefiting Amazon at the expense of other channels, or whether your total sales are actually higher. Compare sales for each major channel that you sell through to determine if any cannibalization is happening, and how that impacts your margins.
Similar to Amazon-specific sales, look at the ten days after Prime Day too to keep track of any hangover effects, both positive and negative.
Inventory and Out-of-Stock Levels
With any major marketing event or promotion, it’s critical to closely track the inventory on hand at the retailer to ensure you do not lose sales from out-of-stocks. For a two-day commercially created event, it’s even more critical. Unlike Black Friday and the subsequent holiday season, there is no outside force driving shoppers to buy; if a product is out-of-stock, consumers are less likely to buy it later or search multiple retailers.
That said, if Prime Day emptied the virtual shelves, it can still be problematic for the subsequent days and weeks, as can the inverse. If you had built-up inventory that you were hoping to quickly sell-through with a promotion but it didn't perform as expected, you may still have excess inventory that you need to worry about. Again, you should be monitoring inventory levels in the ten days leading up to Prime Day as well as the following ten days to ensure you’re optimizing inventory across all your channels.
Most of us have bought something because of a deal, and then later realized we don’t want or need it. Plus, Amazon makes it so easy to return products, the likelihood you will do so is high. Thus, you can’t celebrate all your sales during Prime Day quite yet - keep an eye on your returns for at least a couple weeks to ensure you’re celebrating actual net sales.
Now that all the actuals are in, how did you perform compared to your forecast? To Amazon’s forecast? At what point was your forecast the most accurate? The answers to these questions offer both short, medium, and long-term insights on areas for focus and improvement.
- If there was a significant deviation from forecast, you need to immediately think about the impacts on inventory. Oversold, and you need to check remaining on hand inventory levels across your supply chain and figure out how to best allocate available product to meet upcoming demand. Undersold, and you have to quickly figure out how to meet your targets, especially if your product is perishable or seasonal.
- Amazon Prime Day can be a good indicator of what will happen over Black Friday and the longer holiday season. Use this valuable data to quickly update your forecasts and plans, and ensure you’re prepared for the next big event.
- You can also guarantee there will be another Prime Day next year, and while their strategy is still hard to predict, this year’s Prime Day may the best reference for forecasting what will happen next year. Learn from this year to inform your planning and maximize the sales generated by the unique event.
When it comes to evaluating your Prime Day performance, we believe these are the five key metrics you should focus on. It may sound simple, but to actually arrive at them could take hours of work, pulling data together from multiple systems. For example, getting cross-channel sales often means logging into each retailer portal, consolidating data in spreadsheets, and cross-referencing different product numbers, just to arrive at total sell-through, much less compare it to forecast or targets.
Alloy retail data and analytics eliminates this painful cycle, always giving you an up-to-date view into sell-through and inventory levels across your entire business. Furthermore, it automatically incorporates the data in forecasts and facilitates demand planning, so you’re well prepared for the upcoming holidays. Please reach out to learn how you can quickly get up and running, without IT support required.