Amazon.com Inc. postponed its annual Prime Day sales event from its usual July time slot to October—just a month-and-a-half before Black Friday and Cyber Monday. Therefore, it served as an indicator of how consumers might shop during the holiday season.
Sales of marketplace sellers’ products grew nearly 60% year over year to more than $4.8 billion worldwide during the four-day period from Black Friday through Cyber Monday, Amazon reports. Comparatively, marketplace sellers sold more than $3.5 billion worth of goods during the two-day Prime Day event (Oct. 13-14), a similar 60% increase from the 2019 Prime Day event.
Fareeha Ali, Digital Commerce 360 research and editorial director
Here’s what we learned from Prime Day about the 2020 holiday season.
Consumers will shop with more merchants than just Amazon this year.
It’s likely Amazon.com Inc. will lose a share of total online traffic during the full holiday season. On Prime Day, for example, shoppers browsed more websites than just Amazon this year—more so than in previous years.
A Digital Commerce 360 analysis of SimilarWeb website traffic data to the top 100 North American retail sites during Oct. 13-14 (Prime Day 2020) showed Amazon accounted for a smaller share of total traffic than 2019. This year, traffic to Amazon.com represented 40.6% of total traffic to the top 100 sites during the two-day period, down from 49.3% during Prime Day 2019 (July 15-16, 2019). That means consumers are starting to see Prime Day as a sales event for more retailers than just Amazon. It also means retailers not named Amazon gained more online customers this year and Amazon may not be the only winner this holiday season.
What’s more, Digital Commerce 360’s new research on how the U.S. ecommerce market performed in 2020 showed a similar pattern. Digital Commerce 360 estimates Amazon represents nearly a third (32%) of all U.S. ecommerce growth in 2020. That’s a significant share, but it’s down from nearly 44% in 2019. It’s clear that while the pandemic pushed many more consumers online, they’re not all going to Amazon. At least some are shopping on other large online retail sites—and will do so for their holiday shopping this year too.
For example, Walmart Inc.’s ecommerce sales were up 100% year over year on Black Friday and 57% on Cyber Monday, according to estimates from marketplace technology company Jungle Scout. Online marketplace for handcrafted goods Etsy Inc. doubled its gross merchandise sales 115% year over year during Cyber 5, according to estimates from digital commerce intelligence company Edison Trends. Etsy was the biggest grower, growing nearly four times the 30% growth for second-place Amazon, according to Edison.
Holiday sales won’t be as concentrated during Cyber 5 as in previous years.
Amazon began promoting Prime Day deals before the event even began. For example, by Oct. 9—four days before Prime Day started—it had “early Prime Day deals” listed on its homepage. This is similar to the “early” or “all month long” Black Friday deals many large retail sites have been promoting all November, and even in October.
What’s more, shoppers purchased deals during the days leading up to Prime Day, says Brian Lim, CEO and co-founder of apparel brands Into the AM and iHeartRaves.
Amazon began promoting Prime Day deals before the event began on Oct. 13. This is its homepage captured on Oct. 9.
“Regarding our Amazon store, we had a lot of success with our video campaigns this year, which resulted in a 38% increase in ad revenue. Also, Prime Member exclusive discounts performed better than regular coupons,” he says. “Our early promotions performed well because customers are shopping earlier than in previous years. Buyers were clipping coupons up to days before the event.”
It’s likely consumers have been shopping Black Friday deals throughout the month on both Amazon and other retail sites, and revenue will be more spread out over November and December than it has been in previous years. Digital Commerce 360 estimates 19.2% of holiday ecommerce sales will occur during Cyber 5 (the five days starting Thanksgiving and ending the following Monday). That’s down from 20.4% last year.
Early results of Cyber 5 and full-month November sales show spending has been spread out this year more so than past years. For one, many retailers offered their Black Friday/Cyber Monday deals even before Thanksgiving. By Nov. 23, 76% of top 50 online retail sites—including Amazon—were offering some Black Friday/Cyber Monday discount, according to Digital Commerce 360’s analysis. By Cyber Monday, 88% of the 50 retailers offered holiday promotions.
In a typical year, the holiday shopping season is concentrated during November and December. This year, however, more holiday spending occurred in October thanks to Prime Day. On Oct. 13, 51% of the top 100 retailers offered widespread promotions to compete with Amazon on Prime Day. And 24% promoted holiday shopping on their sites.
“Prime Day’s timing in October positively impacted overall holiday shopping trends. It kicked off the holiday shopping season for our brands.” says Stephanie Fox, chief operating officer at Thrasio, a consultancy that works with more than 100 brands selling on Amazon. “Sales and engagement with our deals have been high ever since. There was less urgency to make purchases on just Cyber Monday, so sales have been more spread out.”
Based on data from marketplace technology vendor ChannelAdvisor Corp., sales of its retailer clients on several marketplaces grew 47.0% year over year in October and 54.4% in November. More significant: ChannelAdvisor’s data shows the strongest year-over-year growth in GMV was during the three days preceding Thanksgiving. The company did not provide specific growth rates.
Similarly, data from technology vendor Salesforce shows ecommerce sales grew 72% year over year on the Tuesday before Thanksgiving and 48% on Wednesday.
Read more in-depth spending analysis by Digital Commerce 360 on during Cyber 5 and the full holiday season.