25 Jul What Can Other Retailers Learn from this year’s Amazon Prime Day?
Last week one of the biggest retailers in the world celebrated the biggest sales day in its history. On July 12, Amazon’s “Black Friday in July” Prime Day saw sales 60% greater than last year’s 24-hour shopping event—which means that, according to Internet Retailer’s analysis of publicly available data, this year’s Prime Day likely brought in close to $2.5 billion in sales. Additionally, its sales accounted for 74% of all US ecommerce sales on that day.
How’d They Do? Technical Issues and the Customer Experience
As with last year’s inaugural event, this year’s Prime Day was not without its hiccups. Technical issues prevented customers from adding items to their shopping cart early on Tuesday, and many disgruntled customers voiced their displeasure on social media outlets by resurrecting last year’s #PrimeDayFail hashtag (which 2015 Prime Day shoppers used to voice dismay at items being out of stock). Though this year’s Prime Day can, by most measures, be considered a success, one takeaway for other retailers is that failing to deliver basic functionality or to meet customer expectations can result in an inferior customer experience that damages brand loyalty and contributes to a lower customer lifetime value.
At the same time, delivering on promises and providing an exceptional experience can increase brand loyalty. In addition to offering deals to Prime customers, Amazon also used the special shopping event to offer 1-hour delivery of 500 items to customers in 25 markets with Prime Now delivery. Before the sale, we discussed whether or not Amazon would be able to successfully deliver on its promises of one-hour delivery. To deliver items within such a short window of time, companies must be able to reduce the time between order and delivery to its lowest possible limit while also preparing to adapt to changing circumstances and potential obstacles that could slow delivery after an item leaves the warehouse. With many customers taking to social media to report on-time Prime Now delivery, it appears that Amazon has effectively implemented the distribution operations technology necessary to make good on this promise.
What should other companies learn from the event? Even retailers that don’t have the resources or inclination to offer one hour shipping should see the success and popularity of this offer as more evidence that shoppers are likely to consider shipping timelines and on-time success during the purchasing process. Additionally, companies should understand the stakes: when shoppers felt Amazon delivered exceptional customer service, they talked about it online—and when they felt that Amazon had let them down, they also shared their negative experiences. To deliver the superior customer experience that is essential to achieving greater brand loyalty and higher customer lifetime value, smart companies should implement distribution operations technology including voice automation and predictive analytics to meet rising customer demand for on-time and accurate fulfillment—no matter how fast the shipping window.