What Prime Day means for retailers

With the first ever Prime Day being hailed a success by Amazon and analysts alike (according to the online retailing giant, Amazon shifted 398 items every second), it’s likely that the one day sales extravaganza will return. But what does it mean for rest of the UK’s retail industry?

Black Friday effect

2014 is when Black Friday came into its own. While many of us in the industry had heard of the term, 2014 was the year when the shopping event made its mark on the UK.

Our research preceding the date showed that Black Friday 2014 was likely to be the busiest to date but even we couldn’t have predicted the sheer volume of consumers who headed in store and online to grab a bargain. According to our results at the time, around one in five brits shopped on the day, with the majority of those (64%) doing so online. In total, UK shoppers spent an estimated £810million on just that one day alone. Given the undeniable success of 2014’s Black Friday, it’s inevitable that the one day shopping event will return.

The importance of fulfilment and logistics

However, along with the huge upshift in sales, Black Friday also bought with it a logistical and fulfilment nightmare for many. With the majority in the industry underestimating the sheer demand that Black Friday created, many websites were simply unable to cope on the day and deliveries were even suspended in some cases as retailers struggled to fulfil the total number of orders.

However, amongst all the chaos, Amazon – the one that started it all – managed to stand tall. Website issues were few and far between and almost all orders made their way to customers as promised.

Each Christmas at eDigitalResearch, we undertake our bi-annual eRetail Benchmark customer experience study, measuring the end-to-end digital customer experience on a range of retail brands. We measure everything from first impressions all the way through to purchase and deliveries. Our fieldwork in 2014 included the all-important run up and aftermath of Black Friday. Results across the Christmas period show that shoppers rated Amazon’s delivery service top, awarding the pure-play retailer a staggering 94% for their delivery with all stating that their Amazon orders arrived either on-time or earlier than expected.

 

 

Amazon’s fulfilment process has long been key to their success. Whilst their website might not scream inspiration and engagement to some, their back-end model ensures that almost all packages arrive on time and as expected; chat to friends and family and you’ll find it hard to come across someone who’s had a poor Amazon delivery experience. They were one of the first retailers to offer widespread next day delivery with Amazon Prime while also being one of the very few companies trailing and testing the feasibility of drone delivery.

It meant that when Black Friday struck, Amazon were prepared.

The introduction of Prime Day

It means that for retailers like Amazon, creating additional one-day sales events throughout the year will raise very few eyebrows. Their exceptional fulfilment strategy means that they’re able to cope with a sudden increase in orders, while their experienced web team keep the site online.

Looking back, the introduction of Prime Day seemed almost inevitable. While a number of retailers scrambled to offer customers similar discounts on the day, all attention on the 15th July was focused firmly on Amazon – except this time, there were no nightmare headlines, just simple success stories. Reports suggest that sales were up 80 per cent in the US and 40 per cent across Europe.

But what does it all mean?

For the rest of the retailing industry, it’s time to sit up. With digital customer experiences becoming increasingly on a par with one another, fulfilment and logistics are likely to become one of the big differentiators over the coming couple of years. It means that delivery should be simple and seamless and match customer expectations; it’s hardly rocket science, but whatever you promise your customers, make sure you deliver, keeping them informed along each step of the journey.

Some others in the industry are already suggesting that Black Friday will become Black Week or Black November this year as retailers try to spread the load. However, with Amazon proving time and time again that they’re more than able to cope with the demand of one-day sales events, it’s likely that the US retailing giant will bring Black Friday back to our shores again this year.

The big question is though – is everybody ready?

eDigitalResearch will once again be monitoring the digital and delivery experience of many of the UK’s top retailers over Black Friday in 2015. To find out more, register your interest at info@edigitalresearch.com and be one of the first to find out how the industry performs this year and whether lessons have been learnt

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