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1 Fung Business Intelligence Centre Global Retail & Technology Flash ReporT #3 on amazon prime day Copyright © 2015 The Fung Group. All rights reserved. Amazon Prime Day Report #3: AS THE DAY comes to the end… July 15, 2015 FBIC’s global team has been tracking Amazon Prime Day and its “lighting deals” around the clock today. Since midnight PDT, FBIC team members in Hong Kong, the UK and the US have been following Amazon’s global sites, social media outlets and media responses. As promised, the etailer refreshed the sites with new deals every ten minutes, using an eBaylike countdown to lock down prices. Consumers have largely expressed strong disappointment in most of the deals, claiming Amazon did not deliver with the expected quality of deals. Even if the deals were suboptimal, extensive publicity around this event could lift Amazon’s and its competitors’ sales. NEGATIVE SENTIMENT CONTINUES As the event unfolded, customers started to slam Amazon with hashtags like #unhappyPrimeDay, #AmazonFail, and even #PrimeDayFail. As of 6:30PM EDT, #PrimeDayFail had replaced #PrimeDay to trend on Tweeter. Complaining about Prime Day has evolved into an entertainment event: customers have captured screens of “1%off” on some Prime Deals, venting about extra waiting time to buy toilet paper or making fun of Prime Day replacing themselves as the biggest disappointment of their parents’ life. Amazon received negative media coverage from almost every major news outlet. Some headlines. As our report noted earlier, the product mix was somewhat esoteric, deals were too mundane, and the website was difficult to navigate. DAILY SALES WERE UP ON PRIME DAY Did Amazon really benefit from the Prime Day publicity? The numbers tell the truth: despite the media backlash, Amazon’s daily sales surged on Prime Day. On this inaugural Prime Day, Amazon’s US sales were up 80% from last year and Europe sales were up 40% as of noon EDT today, according to Channel Advisors’ estimate based on its 2,800 Amazon thirdparty merchant clients.

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Page 1: July 15, 2015 Amazon Prime Day Report #3: AS THE DAY comes ... Prime Day Fla… · Fung Business Intelligence Centre Global Retail & Technology Flash Repor! T#3on amazon prime day!!

 

  1 Fung Business Intelligence Centre Global Retail & Technology Flash ReporT #3 on amazon prime day    Copyright © 2015 The Fung Group. All rights reserved.

Amazon Prime Day Report #3: AS THE DAY comes to the end…  

July 15, 2015  

 

 

 

 

 

   

FBIC’s  global  team  has  been  tracking  Amazon  Prime  Day  and  its  “lighting  deals”  around  the  clock  today.  Since  midnight  PDT,  FBIC  team  members  in  Hong  Kong,  the  UK  and  the  US   have   been   following   Amazon’s   global   sites,   social   media   outlets   and   media  responses.   As   promised,   the   e-­‐tailer   refreshed   the   sites   with   new   deals   every   ten  minutes,   using   an   eBay-­‐like   countdown   to   lock   down  prices.   Consumers   have   largely  expressed  strong  disappointment  in  most  of  the  deals,  claiming  Amazon  did  not  deliver  with   the   expected   quality   of   deals.   Even   if   the   deals   were   sub-­‐optimal,   extensive  publicity  around  this  event  could  lift  Amazon’s  and  its  competitors’  sales.    

NEGATIVE  SENTIMENT  CONTINUES    As   the   event   unfolded,   customers   started   to   slam   Amazon   with   hashtags   like  #unhappyPrimeDay,   #AmazonFail,   and   even   #PrimeDayFail.   As   of   6:30PM   EDT,  #PrimeDayFail  had  replaced  #PrimeDay  to  trend  on  Tweeter.    Complaining  about  Prime  Day   has   evolved   into   an   entertainment   event:   customers   have   captured   screens   of  “1%off”  on  some  Prime  Deals,  venting  about  extra  waiting  time  to  buy  toilet  paper  or  making  fun  of  Prime  Day  replacing  themselves  as  the  biggest  disappointment  of  their  parents’  life.    

Amazon  received  negative  media  coverage  from  almost  every  major  news  outlet.  Some  headlines.  As  our  report  noted  earlier,  the  product  mix  was  somewhat  esoteric,  deals  were  too  mundane,  and  the  website  was  difficult  to  navigate.  

DAILY  SALES  WERE  UP  ON  PRIME  DAY    Did  Amazon   really  benefit   from   the  Prime  Day  publicity?  The  numbers   tell   the   truth:  despite   the   media   backlash,   Amazon’s   daily   sales   surged   on   Prime   Day.   On   this    inaugural  Prime  Day,  Amazon’s  US  sales  were  up  80%  from  last  year  and  Europe  sales    were  up  40%  as  of  noon  EDT  today,  according  to  Channel  Advisors’  estimate  based  on  its  2,800  Amazon  third-­‐party  merchant  clients.    

   

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In  a  Prime  Day  Update  press  release,  Amazon  praised  today’s  strong  sales:    

“Prime  Day  peak  order  rates  have  already  surpassed  2014  Black  Friday,”  said  Greg  Greeley,  Vice  President  Amazon  Prime.  “Prime  members  have  already  bought  tens  of  thousands  of  Fire  TV  Sticks,  35,000  Lord  of  the   Rings   Blu-­‐Ray   sets,   28,000  Rubbermaid  sets,   and   4,000   Echo   devices   in   15   minutes.   The  Kate  Spade  purse  was  gone  in   less  than  a  minute.  We  also  sold  1,200  of  the  $999  TVs  in   less  than  10  minutes.  And  there  are  thousands  more  deals  coming.”  

PRIME  DAY  IS  STILL  A  SUCCESSFUL  SOCIAL  EVENT    The  photo  contest  on  Prime  Day  picked  up  the  most  positive  responses  from  social  media.  Thousands  of  Prime  customers  shared  their  “Prime  moments”  for  a  chance  to  win  $10,000  in  Amazon  gift  cards.  Most  of  them   expressed   appreciation   towards   the   convenience   Prime   membership   has   provided.   Some   Tweets  with  the  hashtag  #PrimeLiving  included:    

“PrimeLiving  allows  to  live  rurally,  but  buy  nationally”  

“PrimeLiving  with  @HailMerry  Snacks!  Love  Amazon!”  

“#PrimeLiving  means  time  and  money  to  take  my  kids  swimming  while  I  write!”  

“We  use  it  everyday!”    

 

RESPONSES  FROM  COMPETITORS    Following  strong   response  earlier   this  week,  Walmart   featured  “Low  Prices  Every  Day   for  Everyone”  and  “Dare  to  Compare”  on  its  homepage  today,  promoting  over  2,000  online  exclusive    “rollbacks”  in  addition  to  lowering  the  free  shipping  requirement  to  $35  from  $50.  This  morning,  Target  has  extended  its  “Black  Friday  in  July”  through  July  18.  The  midsummer  event  offers  buy  one,  get  one  at  50%  off  on  clothes,  shoes,  fragrances  and  other  items.  

As  mentioned   in  our  earlier   reports,  Prime  Day  also  drew   responses   from  European   retailers.   In   the  UK,  leading   electronics   specialist   chain   Currys-­‐PC   World   countered   with   its   own   flash   sale.   Like   Amazon,  though,   promotions   are   an   everyday   event   at   Currys-­‐PC  World,   so   it’s   possible   that   conventional   offers  were   rebundled   into   a   “flash   event.”   But   in   Germany,   MediaMarket   ,the   largest     electronics   specialty  retailer,  made  no  apparent  attempt  to  respond.    

PRIME  DAY  VERSUS  SINGLES’  DAY:  PRIME  DAY  IS  NOT  GLOBAL  WITHOUT  CHINA    Amazon’s  main  Chinese   competitor,  Alibaba,   launched   its   first   Singles’  Day  promotion  on  November   11,  2009,  as  a  celebration  of  China’s  singles.  Last  year,  Alibaba  achieved  $9  billion  in  sales  on  Singles’  Day,  up  from  $5.8  billion  in  2013.    

 

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  3 Fung Business Intelligence Centre Global Retail & Technology Flash ReporT #3 on amazon prime day    Copyright © 2015 The Fung Group. All rights reserved.

 

The  idea  of  Prime  Day  could  have  been  inspired  by  Amazon  China’s  experience  with  Singles’  day.  Amazon  China  actively  participated  in  Singles’  Day  last  year:  it  started  a  48-­‐hour  Singles’  Day  promotion  offering  up  to  40%  off  on  many  products.  Its  promotional  campaign  featured  “Killer  Seconds  —Flash  Sales  Storms”  at  specific  times.    

Due   to   the   Amazon   Prime-­‐only   nature   of   today’s   promotions,   only   customers   from   the  US,  UK,  Spain,  Japan,  Italy,  Germany,  France,  Canada  and  Austria  were  able   to  shop  for   the  deals.  Amazon  China’s  site  was  doing  its  usual  promotions  without  any  mention  of  Prime  Day.    

Will   Amazon   Prime  Day,   the   newest   online   shopping   holiday,   top   Alibaba’s   Singles’   Day   sales   record?   It  might  be  difficult  if  the  ecommerce  giant  excludes  world’s  second  largest  consumer  market,  China.            

     

   

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  4 Fung Business Intelligence Centre Global Retail & Technology Flash ReporT #3 on amazon prime day    Copyright © 2015 The Fung Group. All rights reserved.

 SELECT  DEALS  FROM  AMAZON,  WALMART  AND  TARGET    

 Item     Promotion/Offer   Retailer    

Rusk  Speed  Freak  Professional  Ceramic  Tourmaline  Hair  Dryer,    2000  Watts   You  Save:  $92.00  (61%)   Amazon    

Chloe  New  for  Women.  Eau  De  Parfum  Spray  2.5-­‐Ounces   You  Save:  $66.61  (53%)   Amazon    Acqua  Di  Gio  By  Giorgio  Armani  For  Men.  Eau  De  Toilette    Spray  3.4  Ounces   You  Save:  $38.47  (41%)   Amazon    

Gillette  Fusion  Proglide  Men's  Razor  With  Flexball  Handle  Technology  and  2  Razor  Blade  Refills   You  Save:  $2.82  (20%)   Amazon    

Clinique  Dramatically  Different  Moisturizing  Lotion+  4.2  oz   You  Save:  $33.05  (51%)   Amazon    

KIND  PLUS,  Peanut  Butter  Dark  Chocolate  +  Protein,    Gluten  Free  Bars,  1.4  Ounce,  12  Count   You  Save:  $3.56  (25%)   Amazon    

Neutrogena  Ultra  Sheer  Sunscreen  SPF  45  Twin  Pack,  6  oz   You  Save:  $3.81  (25%)   Amazon    

Rubbermaid  Premier  28-­‐Piece  Food  Storage  Set,  Red   You  Save:  $41.80  (60%)   Amazon    

iva  Labs  -­‐  The  FINEST  Organic  Quinoa,  100%  Royal  Bolivian    Whole  Grain,  4  LB  Bag   You  Save:  $18.39  (46%)   Amazon    

Dove  Body  Wash,  Deep  Moisture,  22  Ounce  (Pack  of  4)   You  Save:  $9.69  (38%)   Amazon    

Advil  Liqui-­‐Gels  Dispenser,  2  Liqui-­‐Gels,  50-­‐Count     You  Save:  $9.60  (48%)   Amazon    

Speck  Products  CandyShell  Case  for  iPhone  6  -­‐  White/Charcoal  Grey   You  Save:  $20.96  (60%)   Amazon    

Philips  Fidelio  X1/28  Premium  Over-­‐Ear  Headphones   You  Save:  $98.99  (33%)   Amazon    

Mossimo  Supply  Co.  Men's  Short  Sleeve  T-­‐Shirt   buy  1  get  1  50%  off  clothing   Target  

Women's  Doris  Footbed  Sandals   buy  1  get  1  50%  off  clothing   Target  

Baby  Girls'  Kitten  4-­‐Piece  Set  -­‐  Pink   buy  1  get  1  50%  off  clothing   Target  

Coleman  12-­‐Person  Double  Hub  Instant  Tent   $100  (You  save  $100.97)   Walmart  

Bestway  Splash  and  Play  Interactive  Series  3D  Inflatable  Pool   $10  (You  save  $14.88)   Walmart  

Bounty  Select-­‐A-­‐Size  Paper  Towels,  White,  12  Mega  Rolls   $15.97    (You  save  $1.00)   Walmart  

Sceptre  X505BV-­‐FMQR  50"  1080p  60Hz  LED  HDTV   $349  (You  save  $150.99)   Walmart    

 

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  5 Fung Business Intelligence Centre Global Retail & Technology Flash ReporT #3 on amazon prime day    Copyright © 2015 The Fung Group. All rights reserved.

 Deborah  Weinswig,  CPA  Executive  Director—Head  of  Global  Retail  &  Technology  Fung  Business  Intelligence  Centre  New  York:  917.655.6790  Hong  Kong:  +852  6119  1779  [email protected]    Cam  Bolden  [email protected]      Sunny  Chan,  CFA  [email protected]    Tal  Dor  [email protected]    Marie  Driscoll,  CFA  [email protected]    John  Harmon,  CFA  [email protected]    Aragorn  Ho  [email protected]    John  Mercer  [email protected]    Swarooprani  Muralidhar  [email protected]    Charlie  Poon  [email protected]    Kiril  Popov  [email protected]    Stephanie  Reilly  [email protected]    Lan  Rosengard  [email protected]    Jing  Wang    [email protected]