Consider this: Roughly one out of every three U.S. dollars spent on Cyber Monday is spent on Amazon.com. So when the mid-summer, Amazon-created version thereof was just reported to have been the retailer’s biggest sales day ever…well, even detractors have to give credit where credit is due. An event that started off on a bad note due to technical glitches and #PrimeDayFail on social media swiftly changed course and surpassed last year’s event by over 60%. Amazon refused to announce actual sales figures or–critically–the exact number of those new Amazon Prime memberships, but multiple independent analysts are estimating $500-$600 billion. This, all from a faux holiday that was invented purely for the company’s financial gain. A fundamental takeaway from Prime Day’s success is that a popular excuse from competing retailers (“but people don’t buy stuff anymore!”) doesn’t seem to hold up. Amazon’s beating them at their own game.
Retail stores ranging from Macy’s to Bed Bath & Beyond have been chalking up disappointing sales to a trend in consumer behavior favoring experiences over things. The assumption is that increased spending on concerts, air travel, and restaurants explains the slowdown felt by purveyors of clothes, shoes, kitchen appliances and other tangible items. As James F. Nordstrom, president of his namesake’s fashion retailer, explained on a conference call with investors, “It’s a traffic thing…we’ve got less people buying clothes this quarter than we expected, and there’s really nothing else to point to.”
Prime Day proved that stuff does, in fact, still captivate buyers, both internationally and domestically. Amazon didn’t sell hundreds of billions in hotel stays, bungee jumping or piano lessons…they sold shoes. One million shoes. Two million toys were sold, along with over 90,000 new TVs. As for the top selling item in the U.S.? It was, of all things…pressure cookers. Apparently, Americans are staying home cooking up soups and stews this summer. Take that, Bed Bath & Beyond.
This is not to say that the experience market is overblown…restaurants and leisure travel are both predicted to see a 27 percent spending jump by 2019, the most of any spending category. But comparing apples to apples…or pressure cookers to pressure cookers…Amazon is demonstrating that factors such as colossal inventory, enticing discounts, and an enormously popular mobile app strike gold. Most importantly, all of those elements were backed be ingenious marketing–that is, the fabrication of a completely random holiday to propel the purchase of all this stuff.
They primed the market, defied the odds, and demonstrated that sales is an art and science that can defy expectations and consumer shifts. If you sell it right, they will come.