A Prime Day Primer for Grocery & CPG Brands

Amazon Prime Day is the Black Friday shopping extravaganza of the summer. During last year’s event, Amazon customers ordered over 100 million items worldwide, which equated to $4.2 billion in spending during the 36-hour sale.

Amazon will almost certainly see that revenue number aggressively grow again this year; a Profitero survey found that 76% of U.S. Prime members plan to shop on Prime Day 2019, up from 63% last year. The same survey also found that 56% of Prime members who made a purchase last Prime Day expect to spend more this year.

As an increasing number of consumers regularly purchase grocery and CPG products online – and as Amazon’s foray into grocery grows increasingly stronger after its purchase of Whole Foods – Prime Day has turned into a major sales opportunity not just for electronics and apparel manufacturers, but for food, beverage and other CPG manufacturers as well. Here’s everything your brand needs to know about Prime Day 2019.

Amazon Prime Day, 2019 Edition 

Prime Day is turning five this year, and to celebrate, Amazon is making it 12 hours longer than last year’s sale. The two-day parade of epic deals will start at midnight PST on July 15 and run for a full 48 hours.

While shoppers will surely enjoy the extended sale, this is just the tip of the iceberg in terms of what Amazon has planned for Prime Day this year. The company is deploying several uniquely designed marketing strategies to draw more attention to one of its biggest shopping days:

  • Amazon Prime Video: Taylor Swift will headline Amazon Music’s 2019 Prime Day concert, which will stream live on Prime Video on July 10. This first-of-its-kind event celebrates the best in Amazon entertainment with arguably the biggest pop star in the world. It builds off last year’s Amazon Music Unboxing Prime Day concert that was headlined by Ariana Grande.
  • Twitch: Amazon will transform this video streaming platform for gamers into a shopping channel as part of this year’s Prime Day. According to Mobile Marketer, “Twitch Sells Out: A Prime Day Special Event” will showcase gaming, electronics and other products in two 12-hour broadcasts. Many of Twitch’s most popular streamers will participate in the event, showcasing specially curated deals for the service’s audience of gaming enthusiasts.
  • Star-studded Deals: Amazon has enlisted many big-name celebrities, including Kristen Bell, Kobe Bryant, Mark Wahlberg, and several social media influencers, to advertise exclusive products or deals for Prime Day.

As Prime Day matures, many analysts have seen Amazon take inspiration from Alibaba’s Singles Day celebration, which had a gross merchandise volume of more than $30 billion in sales in 2018.

A Growing Opportunity for Grocery

While Prime Day’s most talked about deals are usually electronics, several of the fastest-growing categories of items sold include CPGs.

Last year was the first time Prime Day had a dedicated grocery focus, with a number of featured Whole Foods promotions. According to Feedvisor, sales of groceries via Amazon on Prime Day were up 25%. Amazon will definitely integrate Whole Foods in a bigger way this year, with 24% of U.S. Prime members surveyed planning to make a grocery purchase on Prime Day.

Image Source: Profitero

Even with Amazon putting a greater focus on grocery, the internet retailer doesn’t seem to be wavering from its commitment to profitability. Already at risk of landing on Amazon’s CRaP list, certain grocery brands selling low-margin products during Prime Day could face additional funding charges if sales of the products result in a loss for Amazon. If grocery brands selling wholesale to Amazon are interested in Lightning or Showcase Deals on Prime Day, they will need to perform well or be forced to cover the “profitability gap” that can be caused by poor unit economics.

To Amazon and Beyond

Luckily for brands, Amazon isn’t the only retailer offering special sales this Prime Day. RetailMeNot estimates that 250 retailers will take part in the event this year, up from 194 last year. And consumers aren’t afraid to shop around if it means finding a better deal. In fact, almost two out of every three Prime Day shoppers said they visited competing websites to compare prices last year. This represents a huge opportunity for brands, especially since mid-July has become the unofficial kickoff to back-to-school shopping season.

Walmart

Walmart is responding to Prime Day by offering thousands of deals over a longer period than Amazon. The retailer’s Summer Savings event begins on July 14 (the day before Prime Day starts) and continues until July 17 (the day after Prime Day ends). Customers whose orders are greater than $35 will also receive free two-day or next-day shipping, depending on eligibility and the buyer’s location. Unlike Amazon, no membership is required to claim these deals.

Though it hasn’t been announced, it’s not unlikely that Walmart will also integrate its newly launched online grocery delivery subscription service, Delivery Unlimited, into its Summer Savings event.

Target

Target Deal Days, the retailer’s “biggest sale of the summer,” will take place on July 15 and 16. Looking to build on the success of last year’s Target.com One-Day Sale, which was one of the company’s “ biggest days of the year for online sales,” Target Deal Days will feature thousands of deals across Target.com and the Target app. Customers will be able to get their orders the same day, using options such as Drive Up, Order Pickup and delivery via Shipt. As with Walmart, no membership is required to take advantage of the sale.

A Prime Day Strategy for Brands

For brands with low-margin products that are already at risk of ending up on Amazon’s CRaP list, participating in Prime Day can come with a legitimate financial risk – especially now that Amazon is requiring certain grocery brands to pay for any losses incurred on their Prime Day promotions. However, the popularity of the event, along with its direct correspondence with the back-to-school-shopping season, makes it almost impossible for grocery and CPG brands to ignore.

Luckily, more and more retailers are now participating in Prime Day, and consumers are becoming accustomed to shopping outside of Amazon during the event. For both brands and consumers, retailers such as Walmart and Target boast a number of benefits over Amazon. Most notably, there is no membership required to access the deals. There are also more convenient fulfillment options available, such as same-day pickup and delivery. And with more traditional profitability structures than Amazon, Walmart and Target also pose less of a financial risk for brands.

When it comes to Prime Day, then, it’s important for grocery and CPG brands to have a comprehensive strategy across retailers. Pricing and promotions are a crucial part of this strategy, but they mean nothing if your online listings aren’t optimized for search and conversion. To achieve maximum Prime Day success – whether on Amazon or other online retailers – you need high-quality product content that drives both search visibility and sales.

Need help?

Looking for a scalable way to optimize your product content across retailers? That’s where OneSpace comes in. Using our best-in-class e-content production software and integrated database of consumer search insights, our dedicated team of e-commerce experts optimize your product content with unrivaled speed and scale. Contact us to learn more.

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