In this 5-minute read:
- Why local retailers should care about Amazon Prime Day
- How small business revenue performs on Prime Day
- 3 ways local retailers can compete with Amazon on Prime Day
Amazon Prime Day 2019 is coming up on July 15 and 16, and it’s become a serious shopping event for e-commerce enthusiasts all around the world.
Now that this e-holiday has a few years of traction (it started in 2015 to commemorate Amazon’s 20-year anniversary), we started asking how Prime Day affects sales patterns at small, local brick-and-mortar retailers.
As usual, we dug into the data. What we learned is this: Prime Day doesn’t really have much of an impact on local retail… yet. But there are reasons why we’ll be watching the trends in years to come. (More on this below.)
Before we dive into the findings, let’s quickly touch on how and why we did this analysis. First, the how.
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A 15-second guide to understanding Womply’s Prime Day analysis
Womply is a CRM and marketing software company, and our technology is powered by transaction data for millions of American small businesses. One bonus of having all that data is we can analyze how consumers are spending money with all kinds of local businesses nationwide.
Go deeper: Check out our free small business resource center for analysis on everything from the best days for local restaurants to how hurricanes impact small business revenue.
For this research project, our data science team analyzed transactions at more than 50,000 local, independent retailers (no Best Buys or Walmarts) during every single day of the 2017 and 2018 calendar years. That gives us a clear idea of what an “average day” looks like.
Here are a few quick definitions to help you interpret our findings:
- Consumer spending = Total dollars spent at all local retailers on a given day, on average
- Daily revenue = Average sales revenue for retailers that are open and operating on a given day
- Transactions = Average number of sales a retailer records on a given day
- Ticket size = Average dollar amount sold per transaction
A 15-second guide to why local retailers should care about Prime Day
If you run a local boutique retail shop, why should you care about Amazon? Well, because the world is going digital at record speed, and it’s influencing consumer behavior — even in local markets once dominated by local businesses.
Consider these facts:
- Amazon made nearly $60 billion (BILLION!) in the first three months of 2019 alone
- Online shopping was actually higher than general merchandise shopping for the first time ever this year
- Amazon trots out some of its best deals of the year—nearly 1 million of them—for about 48 hours on Prime Day
People in every market are logging onto Amazon in response to these huge deals the same way they’ve typically swarmed furniture stores for Memorial Day sales. So, you can’t ignore the trend. We’re to help you see if it makes a dent on local retail sales.
Womply Study: Prime Day is a pretty average day for local retailers
Ok, with the table set, let’s dive into the analysis. When we compared local retail sales on Prime Day to the baseline, we made a few key discoveries:
- Prime Day has been a pretty average day for local retailers the past two years, suggesting minimal impact so far
- But, local retail sales did perform slightly less well in 2018 compared to 2017; too early to call it a trend, but it’s worth watching
Take a look at the graphic below for a quick summary.
In 2017, the average local retail business brought in $845.10 on Prime Day, a 2% increase compared to the average day. They saw 11 transactions, on average, a 3% bump vs. an average day, and their average ticket was 5% higher at $77.26.
All told, consumer spending at local retailers was up 10% on Prime Day 2017, and it turned out to be the 159th-ranked day of the year and 6th-ranked Monday of 2017. Not bad!
Now, let’s turn the page to Prime Day 2018. The average retailer made $885.81, a higher dollar amount than 2017 but a 2% decrease compared to higher average sales performance in 2018. Retailers again saw 11 transactions, on average, a 12% decrease, and their average ticket was 5% higher at $78.32.
Consumer spending at local retailers was up 2% on Prime Day 2018, and it was the 210th-ranked day of the year and the 17th-ranked Monday of 2018. Still not bad, but not great either.
In summary, local retailers haven’t been hurt by Prime Day so far, but the jury is still out.
3 things local retailers can do to compete with Amazon on Prime Day
As we’ve written before, the so-called retailpocalypse doesn’t have to be scary for local businesses, and there are plenty of ways for small businesses to compete with Amazon.
Here are three things local retailers can do to rake in more business on Prime Day:
- Run your own promotion: Discounting is a proven technique to drive urgency and increase interest because it plays off consumers’ FOMO (fear of missing out). Use that psychology to your advantage and draft off Amazon’s big day by running your own Prime Day promotion at your shop. You might be surprised how effective it is. Case-in-point, we found that Black Friday—not Small Business Saturday—is the best sales day of the whole year for small retailers, probably because people are already in a spending mood.
- Throw an anti-Prime Day party: If you don’t want to join Amazon’s party, why not go the other way entirely? According to research by Gallup, American consumers have great affinity for small businesses but not so much for big ones. Play off that. Throw an event at your place of business in defiance of Amazon’s big day, and don’t even cut prices. Bring in food and have a party. You might activate your customer base who want you to win to come down and celebrate with you. If your event goes big, you might even get some free news coverage out of it.
- Just send an email: Sometimes, just reminding your customers that you’re open is enough to get them to come back in. You know your customers are getting deluged by ads from Amazon touting Prime Day — why not whisper in their ears, too? If you have contact info for your customers, just send a simple email thanking them for supporting small business and inviting them back.
How is your business adjusting to e-commerce events like Prime Day? Drop us a line at press@womply.com and we’ll consider sharing your story on our blog.