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Brands may not be able to circle Prime Day on the calendar yet, but the time to prepare is already here.
Amazon Prime Day is set to return for 2022 in July with a seemingly endless assortment of deals across the ecommerce platform. It offers brands the opportunity to attract attention from a massive audience of customers, and boost a presence that will keep paying dividends down the road.
Like any big event, it’s important to go into Prime Day with the pieces in place to execute. That means knowing key dates, preparing inventory, optimizing marketing and putting the metrics for success in place. With plenty going on already, that's a lot. So, to help, we consulted with experts and key sources to put together a guide to get ready for Prime Day.
Here’s the primer:
An ecommerce holiday
Prime Day debuted in July 2015. Billed as a celebration of the Amazon's 20th anniversary, the company effectively created its own holiday. As is typically the case for Amazon, Prime Day is geared toward the customer. The focal point is a bevy of deals on everything from Roombas to Instant Pots to protein powder.
But there are a couple more things that make Prime Day unique.
For one, there was the tie to Prime. Amazon’s membership program already had guarantees built in for shipping and returns. With Prime Day, the subscription could offer access to the best deals at a particular event. It's designed to entice new signups. For Amazon, this also provides an entry point to the range of its services, from streaming video to Kindle to Whole Foods.
The timing also stood out. Think of when retailers probably want to offer big deals, and typically the holidays come to mind, particularly around Black Friday and Cyber Monday. Placing Prime Day in July planted a big shopping event in the heart of the summer. It’s typically a slower time for retail, as school is out and many people are on vacation. With Prime Day, Amazon harnessed the convenience of web-based shopping to turn that on its head.
“The advantage for doing it in the summer is that in theory it is less cluttered in the market because people are in a vacation state of mind,” said Allen Adamson, cofounder of marketing strategy and activation firm Metaforce and adjunct professor at NYU Stern School of Business. “What has changed is that even when people are sitting in their beach chair in the ocean, they have their phone in their hand. They can shop just as easily from the beach as they could by getting in the car and going to the mall.”
Prime Day became massive, and has grown every year since its inception. In 2021, sales reached $11.19 billion, up from $10.4 billion in 2020, according to Digital Commerce 360. It shifted the retail calendar, as Prime Day is now a destination event for brands. It has even created a famed halo effectfor other retailers that boosts ecommerce as a whole in July.
Prime Day 2022 plans
As it announced first quarter earnings in April, Amazon unveiled that Prime Day 2022 will be held in July. The company didn’t provide more details on the exact date and how long Prime Day will last, but the announcement was in and of itself a reminder:
Now is the time for brands to start preparing.
Given the success of Prime Day, the decision to participate is likely not a difficult one for many brands at this point. Consulting with private-label brands on Amazon as founder and CEO of Black Label Advisor, Jon Elder, said he has never met one that didn’t want to participate.
It speaks to the potential upside, but keep in mind that big events, by their nature, require going a level above.
“Everyone is going to be leaning into this, so if you’re going to play, you have to play to win,” Adamson said.
Success can look different for brands of different sizes and categories. The important thing is to determine where you fit, and what success will look like.
With that in mind, let’s break down how to get ready for Prime Day in several important areas:
For brands that use Fulfillment by Amazon (FBA), there’s a key date to keep in mind: June 20. That’s when Amazon requires sellers to send in FBA inventory. But given the volume of participation in Prime Day, it’s best to get ahead. As with any event, there can be long lines.
“I recommend sending in your inventory by June 1 to avoid the congestion at check-in that happens each year at FBA warehouses,” Elder said. “There is nothing worse than seeing your Prime Day deal get canceled because you waited until the last minute to get your inventory in. It's better to be safe than sorry in this case.”
Meanwhile, the deadline for coupon submission is June 10, according to Amazon. The deadline for Prime Exclusive Discounts for Prime Day is July 8. The latter discounts have specific criteria for Prime Day, so review them here before submitting.
The announcement of the actual date of Prime Day is still to come. Given the inventory deadline, Elder expects that it will likely be held in mid-July.
Holding Prime Day in July marks a return to Amazon’s approach from 2015-2019. It was delayed until the fall in 2020, and held in June in 2021.
Given the success, Prime Day has expanded to a two-day event. Plan accordingly.
When it comes to producing and preparing the products that will be sent in to FBA, stick to the mantra that more is better.
“In terms of inventory, it's best to stock up on your best sellers and make it an internal business goal to not run out of any inventory,” Elder said. “It's always better to be overstocked and stay in stock than to run lean and run out because of Prime Day.”
A backup option, he said, is to work with a third-party fulfillment provider to store additional inventory. If needed, switch a listing to Fulfilled by Merchant (FBM) in order to continue to fulfill Amazon orders even if the FBA inventory runs out.
Knowing what’s most likely to sell can also help to make inventory decisions. In 2021, the top Prime Day categories were health & beauty, consumer electronics, household essentials and apparel, according to Numerator.
Brands are always looking to help their products stand out from the crowd. That’s especially important during a big event like Prime Day. Amazon brings in the traffic. For brands, the work lies in attracting customers.
Given the focus on deals, an event like Prime Day is typically a good place to implement a loss leader strategy. This is when a product is sold at a price that won’t make a profit, but sells in a high volume that brings lots of customers to both the product, and the brand as a whole.
Heavily discounting a certain product can help to attract attention. Practically speaking, this idea is built in to Prime Day. Sellers must offer steep discounts in order to get approved.
There’s a wider opportunity to stand out that goes beyond the core deals offered by Amazon, too. Elder noted a few more approaches brands can take:
- Use Amazon coupons and offer a unique discount just for this event.
- Set up Lightning Deals to increase the visibility of a product during the mad rush of traffic for Prime Day.
- Create special promotions like "buy one, get one 50% off" which show up directly below your listing.
- Create unique discounts for your email list, social media following, and influencers. The entire country will be talking about Prime Day, so make sure you are attracting people from all angles.
Make time to prepare. Before the event, it helps to set aside some time for housekeeping on a few items. This includes optimizing PPC optimization, and completing listings audits. If you’re engaging with influencer marketing on platforms like Instagram and TikTok, it’s also especially important to ensure off-Amazon traffic campaigns are set up correctly, Elder said.
Given the extreme deals available, it’s best to think about Prime Day in the same way Amazon does. The company has shown it is willing to make Prime Day itself a loss leader for the company, running the event on thin margins. The point is not to boost sales. Rather, it is to attract more people to shop on Amazon.
Brands can adopt a similar mindset. Think less about profits, and more about boosting your presence on Amazon for the long-term.
“If consumers are only buying from you on Amazon Prime Day, that’s a good business for Amazon,” Adamson said. “That’s not a good business for you.”
Again, an approach that can bring success goes back to how Prime Day is built. Due to the nature of how discounts are calculated, deals are measured in BSR (Best Seller Rank), not total revenue.
That makes BSR the key metric for Prime Day success.
“To get a deal approved, the discount must be extreme,” Elder said. “In many cases, the brand will lose money on the Prime Day deal. However, making money on the deal is not the goal. Rather, it's to boost BSR, which, in turn, boosts organic ranking, creating increased revenue long term.”
This also contributes to obtaining a Best Seller Badge, an instantly-recognizable identifier of top sellers that helps to increase trust. It shows how what happens on Prime Day has implications for future sales, and underscores the importance of ensuring Prime Day fits into a brand’s overall strategy.
Eye on the economy
The many swings and shocks of the last few years have taught us that events happening in the world can impact individuals businesses in big ways. That applies here, as well.
In 2020, Prime Day was delayed until October due to the pandemic. In 2021, supply chain issues meant brands were working hard to avoid out-of-stocks. This year, record inflation means prices are up across the economy. Brands are facing challenges at nearly every touchpoint, from the cost of raw materials to transportation, Elder said. That could impact Prime Day as a whole.
“Right now, brand owners are laser focused on maintaining their margin, so prices are going up,” he said. “There is just not the same appetite to provide steep discounts this time around.”
It's important to consider how prices will impact the discounts a brand is able to offer. Even if a brand doesn’t offer a deal at the event, there are opportunities to gain visibility by participating. Ahead of Prime Day 2021, 58% of consumers surveyed by Adobe reported plans to participate. That's a big audience to get in front of. Consider a sale around the event, or approaches to help connect with customers by communicating a brand's values and unique story.
All in all, it’s a rare opportunity for brands to introduce themselves, or meet someone new. Take the time to ensure your brand is viewed in the best light.
This post was updated at 11:35 a.m. on 5/27/22.
Trending in Explainers
Amazon partnered with Hexa to provide access to a platform that creates lifelike digital images.
Amazon sellers will be able to offer a variety of 3D visualizations on product pages through a new set of immersive tools that are debuting on Tuesday.
Through an expanded partnership with Hexa, Amazon is providing access to a workflow that allows sellers to create 3D assets and display the following:
- 3D images
- 360 viewing
- Virtual try-on
- Augmented reality content
- High-definition marketing materials, including packshots and lifestyle images through AWS Thinkbox.
Selllers don't need prior experience with 3D or virtual reality to use the system, according to Hexa. Amazon selling partners can upload their Amazon Standard Identification Number (ASIN) into Hexa’s content management system. Then, the system will automatically convert an image into a 3D model with AR compatibility. Amazon can then animate the images with 360-degree viewing and augmented reality, which renders digital imagery over a physical space.
Hexa’s platform uses AI to create digital twins of physical objects, including consumer goods. Over the last 24 months, Hexa worked alongside the spatial computing team at Amazon Web Services (AWS) and the imaging team at Amazon.com to build the infrastructure that provides 3D assets for the thousands of sellers that work with Amazon.
“Working with Amazon has opened up a whole new distribution channel for our partners,” said Gavin Goodvach, Hexa’s Vice President of Partnerships.
Hexa’s platform is designed to create lifelike renderings that can explored in 3D, or overlaid into photos of the physical world. It allows assets from any category to be created, ranging from furniture to jewelry to apparel.
A Hexa 3D rendering (Courtesy photo)
The result is a system that allows sellers to provide a new level of personalization, said Hexa CEO Yehiel Atias. Consumers will have new opportunity see a product in a space, or what it looks like on their person.
Additionally, merchants can leverage these tools to optimize the entire funnel of a purchase. Advanced imagery allows more people to view and engage with a product during the initial shopping experience. Following the purchase, consumers who have gotten a better look at a product from all angles will be more likely to have confidence that the product matches their needs. In turn, this can reduce return rates.
While Amazon has previously introduced virtual try-on and augmented reality tools, this partnership aims to expand these capabilities beyond the name brands that often have 1P relationships with Amazon. Third-party sellers are an increasingly formidable segment of Amazon’s business, as they account for 60% of sales on the marketplace. Now, these sellers are being equipped with tools that enhance the shopping experience for everyone.
A video displaying the new capabilities is below. Amazon sellers can learn more about the platform here.
Hexa & Amazon - 3D Production Powerhousewww.youtube.com