Last summer, Amazon.com tried a novel idea: It promised shoppers a Black Friday-like sale in the dead of summer, one that would only be accessible to members of its Prime program.
On Tuesday, the e-commerce giant is holding its second installment of that event, Prime Day, a move that effectively serves as a test of whether the deals bonanza can become a summertime ritual for shoppers — and a reliable, annual magnet for attracting new Prime members and ringing up big sales. (Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)
Amazon has been working in overdrive to generate hype for Prime Day: Since July 5, it has been offering a smaller slate of daily "countdown" deals on items such as vacuums, protein supplements and laptops. As part of a tie-in with its Prime Music streaming service, it is running a contest in which customers can enter to win meet-and-greets with artists such as country singer Carrie Underwood and rapper Flo Rida. And it is promising it will serve up 100,000 deals on the big day across almost all product categories, including Fire tablets for $33.33 and a Samsung Blu-ray player for $49.99.
It's not hard to see why Amazon is pushing hard to drum up interest in Prime Day. During last year's event, the company reported that customers purchased 34.4 million items — more than any other Black Friday in the company's history to that point. (It's noteworthy that the company did not offer comparisons to its Cyber Monday results, suggesting Prime Day sales did not eclipse those on the holiday season's biggest day for online shopping.)
And, crucially, it reported more people signed up for Prime that day than on any other day in Amazon's history. This, perhaps, is even more valuable than having a record sales day, because roping customers into the membership program could be an effective way of generating repeat business.
Prime Day has prompted a wide spectrum of reaction from rival retailers. Just as it did last year, Walmart has made an especially aggressive play to go toe-to-toe with Amazon, announcing that it would offer free shipping from July 11 through July 15 on all purchases, a change from its usual policy of offering free shipping on orders over $50. Walmart is also touting special deals on items ranging from a Samsung 4K TV for $598 to a women's denim jacket for $8. And Walmart is trumpeting 30-day free trials of its pilot Shipping Pass program, a Prime-like offering in which customers can pay $49 per year for free two-day shipping on most online orders.
On Monday, J.C. Penney took to Twitter to tout a big sale, making a not-so-subtle reference to Prime Day by saying, "Our prime deals start today, so you can snooze through tomorrow." By late Monday evening, Best Buy's homepage promised, "Deals for all. No membership needed" — a clear dig at Amazon's sale.
Toys R Us is having a sale Tuesday, offering 15 percent off regular priced items and sale prices on more than 50,000 items. An e-commerce player, NewEgg, is also aiming to get in on the action by offering hundreds of deals on Tuesday on items such as laptops and smartphones. However, major retailers such as Target are sticking with their usual retailing playbooks this week.
In some ways, Prime Day has plenty in common with the kinds of annual sales that traditional retailers have held for years. Mattress chains, for example, have long packed three-day weekends such as Memorial Day with promotions. Department stores such as Bloomingdale's have annual "Friends and Family" sales that are highly-anticipated by loyal customers. But Prime Day is unique in its scale: For example, Amazon is pledging to have an inventory of discounted TVs that is almost double what it would have on Black Friday and Cyber Monday combined.
It remains to be seen how customers react to this year's Prime Day, but if last year is a guide, we shouldn't put too much stock into the chatter we see about it on social media. Last year, legions of Twitter users joked that the assortment of items was disappointing and felt like a digital garage sale. And then the strong sales results subsequently showed that hordes of shoppers found the deals plenty enticing.