The Impact of Amazon Prime Day on DTC Advertisers

Is Amazon Prime Day the new Christmas in July? The multi-day promotional period that was created to boost Amazon’s own sales, has become a major event that significantly influences retailers and e-commerce brands a-like. The event’s impact on DTC businesses varies, whether they sell on Amazon, strictly DTC or both. Read further to understand the opportunities and challenges that can stem from Prime Day, along with our recommendations for how your business can reap rewards similar to Cyber Week.

Opportunities for DTC Brands

Increased Sales & Revenue Amazon Prime Day attracts millions of shoppers, gaining DTC brands access to new audiences and the potential for long-term customer acquisition.

Participating in Prime Day can afford your brand heightened visibility and dramatic sales spikes. One agency client saw a 34% increase in revenue the week of Prime Day compared to the remainder of the month.

Off-Amazon Sales Spike Prime Day drives a general uptick in consumer interest and online shopping, not just on Amazon. Many shoppers start their research early, as soon as Prime Day is announced, searching for deals across the web. This can result in a significant boost in traffic and sales for DTC brands selling through their own websites. Looking across all agency clients over the past 2 years, the average global response rate rose 5% Amazon Prime week compared to the 6-weeks previous.

Challenges for DTC Brands

Increased Competition The influx of promotions during Prime Day creates increased competition across categories leaving DTC brands feeling the pressure to lower prices and offer consumers a great deal which can put pressure on margin.

Consumers Are Looking for a Deal As soon as Prime Day is announced, consumers are looking for a deal! With several Prime Days behind us, consumers have been conditioned to expect significant mid-year discounts, leading many to delay purchases in anticipation of deals. This can result in a lull before Prime Day and a sharp drop in traffic and conversions immediately after the event. That same client that saw revenue increase the week of Prime Day; saw it decline 35% the week following.

How can your business make the most of Amazon Prime Day?

• Run a parallel promotion on your website leading up to and during Prime Week to capture deal-seeking shoppers.
• Consider offering free shipping in addition to the product discount to incentivize consumers to buy direct vs. on Amazon.
• Boost marketing spend a few days prior to and during the Prime Day event to promote the sale and create interest when consumers are doing their research.
• Add promotional messaging to your creative to create a sense of urgency and help promote the sale.

Just like every other retail holiday, Amazon Prime day poses challenges for DTC brands but those that plan in advance can reap rewards in the form of increased revenue and sales, similar to what you’d expect to generate Black Friday and Cyber Monday. Brands that strategically align their marketing and offer the right promotion can harness the event’s momentum to drive sales, acquire new customers, and build long-term brand equity.