Why Brands Can’t Pin Their Hopes on Prime Day

Christmas in July isn’t a new concept. But the emergence of Amazon Prime Day, a one-day shopping holiday that offers deep discounts and deals to Prime members, has since taken that concept to a new level. It’s created one of the year’s biggest shopping events aside from Black Friday and Cyber Monday. 

Last year, Amazon sold more than 100 million products on Prime Day, reports CNBC. The event has been so successful, Amazon turned it into a two-day event for 2019. Nearly 500 million people are expected to shop Prime Day 2019, according to Feedvisor. And brands that offer discounts on Prime Day are likely to see a 3-4x lift in sales, according to Profitero

With more than 100 million Prime members and an even greater non-member audience, selling on Amazon can certainly help brands expand their reach and gain access to new customers. But often this access comes at a hefty price—namely, monthly subscription, referral, closing, and fulfillment fees. 

Fees aside, the biggest price brands pay to sell on Amazon? The lack of data they get in return and missed opportunities to build relationships with customers. 

Forward-thinking brands realize they can’t pin their hopes for sustainable growth on Prime Day or Amazon itself. Channels run by third-parties can change their rules and algorithms without any notice, leaving brands with little control over how or even if their products are displayed to potential customers. 

And customers are demanding better from brands. In today’s Age of the Customer, people can access information about a seemingly unlimited number of products and services in real time. All they need is an internet connection. Customers today want to engage with brands that are authentic and provide value—brands they trust. Trust evokes advocacy, which is one of the sharpest arrows in a brand’s quiver. 

Smart brands are taking more control and tapping into the channels they own, like email, website, and mobile, to deliver highly personalized, relevant marketing experiences that build valuable long-lasting relationships. 

How brands are growing fast without relying heavily on Amazon

Kiss My Keto, a ketogenic lifestyle company, started selling on Amazon to test how customers would respond to their products. But the lack of data the brand received about its customers through that channel and its inability to engage with them after a sale helped spur the company’s decision to create its own ecommerce store. 

“We analyzed our profit margins, looked at the little customer data we had from Amazon, and realized that a large portion of our revenue was going to Amazon’s fees. Selling on Amazon was helpful to reach a wide range of customers, but it doesn’t give sellers the rich data we need to learn more about customers, create relationships with them, increase average order value, customize messaging to different segments, and drive long-term customer lifetime value,” said Kate Geller, director of affiliate marketing at Kiss My Keto. 

Without deep data about your customers, like profile and behavioral data, it’s nearly impossible to develop long-term relationships with them, which are crucial to the growth and sustainability of your business. 

Geller added, “With Amazon, we couldn’t provide our customers with information about ketosis—scientific findings, anecdotal videos, blog content, and other educational resources. Our voice was missing and we knew we could provide more value to our customers than just transactional ecommerce in a marketplace. We realized we needed to have our own ecommerce store to help us collect customer data and have more control over the customer experience.”

Beardbrand, a men’s grooming company, initially used a third-party to sell its products on Amazon. It worked well and the brand thought about bringing that function in-house so it could invest more into selling on Amazon, but ultimately changed its strategy. 

When its products sold out on Amazon, Beardbrand noticed an unanticipated surge of sales on its ecommerce site. Eric Bandholz, founder of Beardbrand said of the change in strategy, “Why bother managing two different channels when we could just focus on one and make it really good?” 

Beardbrand has since grown and relied heavily on content marketing as a key growth strategy. 

“We invested so heavily in content marketing and our brand that people were looking for Beardbrand on Amazon rather than looking for our products… With content marketing, and also with branding, you need to have a little bit of faith in your process, what you’re doing and know that not every single thing you’re creating is going to have a call to action. It’s not going to be driving people to buy things. And you’re not going to be able to track that,” Bandholz said. 

Rent the Runway, a subscription-based fashion rental service, has grown primarily through word-of-mouth, user-generated content, and organic marketing efforts. Modern Retail reports “94 percent of the company’s customers are acquired organically, while the rest come through paid marketing initiatives,” according to Anushka Salinas, Rent the Runway’s chief revenue officer.

And the results show this approach has worked for the brand. 

“The way we’ve gone about customer acquisition to date… through user content, word of mouth and referrals mostly, has resulted in very little churn. People who do churn say they plan to reinstate,” said CEO and founder Jennifer Hyman.  

How brands are creating their own momentum around Prime Day

Brands are increasingly recognizing the power of their own digital channels and they’re swooping into the summer shopping season with steals and deals of their own. 

According to Modern Retail, “Consumer behavior has shifted over the past few years such that people are actively looking to shop in the middle of July. And it’s no longer relegated just to Amazon.”

Savvy brands have started creating or dialing up their efforts on their own shopping events to engage customers and claim their own portion of that imminent summer spending. 

Chubbies, a men’s apparel brand known for its shorts, created two of its own branded holidays to drive sales—one in July and the other during the end-of-year holiday season. Chubbies’ “Julyber Monday” holiday event was originally designed to help men get new shorts ahead of July Fourth. It’s “Thighber Monday” holiday event coincides with Cyber Monday during the end of the year shopping season.   

Nordstrom hosts its annual two-week Anniversary Sale in July, during which the retailer introduces new fall merchandise and clears out summer styles at deep discounts. Cardholders get early access to the sale based on their level of spending throughout the year, though the sale opens up to non-cardholders after the early access period. This sale started long before Prime Day, but the popularity of it has grown significantly in recent years due to the emergence of influencer marketing and other digital marketing channels. Today, the bulk of the brand’s sales come through its digital channels. On the first day of last year’s anniversary sale, “digital sales surpassed last year’s peak by 80 percent,” according to Forbes.

Target is another retailer that recently announced a summer shopping event poised to compete with Prime Day. It’s “Deal Days” event, which coincides with Amazon’s Prime Day, will offer shoppers deals of up to 40 percent off merchandise, according to CNN. The premise? You don’t need to be a member or a cardholder to score great deals.

Why brands must tap into their own digital channels today

There’s no doubt that selling on Amazon can help brands gain access to new customers, which is vital to a brand’s growth. But in today’s Age of the Customer, brands have to go deeper than simply acquiring customers through transactional marketplaces if they want to grow sustainably. Brands must be able to collect data and develop deep relationships with their customers over time. 

According to Forrester, “The most effective marketing operations exercise control over every customer interaction, including email, website, social, call centers… every customer touchpoint, making sure they are relevant and delivering value because that’s how you keep customers.”

Brands today have the power to uniquely engage customers through their own digital channels and use the data they capture to help deliver more compelling, personalized experiences that build long-term relationships. Brands can tap into the massive summer shopping season and nurture those relationships through the rest of the year to drive even greater sales during the ultimate holiday shopping season—Black Friday and Cyber Monday—and beyond.

 

Learn more about why today’s marketing impacts Q4 sales. Check out the data in this report: Ecommerce Sales: How Relationship Building and Planning Impact BFCM.

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