Amazon has does it again. On Tuesday 12 July 2016, Amazon launched its second annual Prime Day promotion luring more customers to sign-up with Amazon.
Like Black Friday, Prime Day offers huge discounts for new customers if they sign up as a Prime Member and existing ones. Prime members pay $99/year and are offered free two-day delivery and access to free video and music content.
But the day started with a few problems with some customer reporting problems with Amazon website when trying to checkout. Amazon acknowledged the problem via Twitter and said they were working hard to resolve the problem.
Some customers complained of an anti-climax for last years Prime Day. This time Amazon doubled their deals with expectations for deals to sell fast. Deals ranged from HD 55-inch 4K TV discounts to more than 50% off selected movies.
War for Customers
This is war for other retailers as they try to stem the Amazon engine competition. Retail giants such as Walmart responded to Prime Day with their own promotions and special deals.
Walmart also announced last week their own free shipping membership which directly rivals Amazon’s Prime Day. The war for customers ravages on..
Why promote Prime Day?
Customer’s are paying an annual fee to Amazon to enjoy free shipping and better deals. This is a great model for Amazon. Customer’s are actually paying them to shop at their store. How will this impact the future of online shopping for retailers? As Amazon expand into other markets such as food and groceries they can offer more to their loyal customers.
We are seeing competitors respond with similar models offering membership in return for free shipping and other deals.
Amazon added 19 million new Prime members in the U.S. Last year Amazon reported 44 million members. Prime members spend on average $1200 per person while non Prime members spend $500 per year. So Prime members are spending twice as much.