Amazon Prime Day 2020 - When can we expect to see it and what will it look like?
There has been some confusion about when the US will experience Prime Day 2020 and how they will carry out operations during the Pandemic in a country with 112 million Prime members.
Hang on, did I miss Prime Day?
With 2020 being the amorphous blob of a year that it is, it is easy to think you may have missed the big event.
It normally swings by every July but just like everything, Coronavirus has thrown a wrench in the works and things have had to change.
The only official statement released by Amazon on their website [Link] is “Prime Day 2020 has not been announced”. Which leaves us susceptible to speculation, rumours and analysing breadcrumbs.
What is Prime Day?
If Amazon was a religion, then Prime members would be the devout sect and Prime Day would be the celebration of our prophet’s birthday.
Now just to be clear Bezos’s birthday is on January 12th, Amazon’s profit is $7.7 billion for the first two quarters of 2020 and Prime Day celebrates the birth of Amazon.
Yes, I am a Prime member, me and nearly 164 million people worldwide, and this is our holiday!
So apart from being like an Amazon-style Christmas, what is Prime Day?
It’s Amazon’s biggest, global shopping event held exclusively for Prime Members. It’s a buying bonanza with massive discounts, product launches, cashback offers and exclusive products.
The most sought out deals tend to be on electronic goods. You won’t be shocked to find out the most advertised products and ones with the biggest discounts tend to be Amazon’s own tech.
For retailers, manufacturers and consumers this is a significant manufactured shopping holiday that produces sales on par with the winter holiday season.
The overall idea is that everyone wins on Prime Day.
Loyal Primer members are rewarded with discounts and exclusive access to newly launched products, large manufactures are able to get rid of stagnant stock as they simultaneously launch the next product cycle and Amazon has an opportunity to accrue more members who pay an annual membership, all while receiving another bump in sales on their year on year revenue growth.
(It’s obvious some win bigger than others.)
Prime Day 2020 all we know
Like all things in 2020 Corona has caused complications. Amazon normally hosts its sales extravaganza in July but that didn’t happen this year. The sales event has been delayed three times. The most likely date for it now is in October.
Amazon has had to spread the event over different days for different regions of the world. Excitingly India was the first to have their Prime Day 2020 last week.
Amazon launched the first Prime Day back in 2015 to mark the company's 20th Birthday. Ever since then consumers have been trained to expect 2 large online shopping holidays, one in the summer and one at the end of November.
Manufacturers have tailored their production schedule to these bi-annual consumption peaks. Some retailers have noticed a surplus of inventory in distribution depots occupying valuable shelf space because products were ordered months ahead of Prime Day which later got postponed.
Amazon’s competitors often try to steal the spotlight when Prime Day rolls around but this year they have had an open goal. Despite wanting to maintain a healthy relationship with amazon manufacturers have been happy to offload products on to other retailers who have held online sales events.
Amazon has created the mentality of being a one-stop-shop with an excellent delivery service. For this reason business exploded during the pandemic. Meaning that Amazon was forced to focus on household essential items, which left low inventory levels of flashy electronics that consumers nearly buy.
Seeing as Amazon made more sales in last year’s 48 hour Prime Day event than 2018’s Black Friday and Cyber Monday combined, a whopping 175 million items were purchased, you’d think the business had their priorities mixed up.
On the contrary, the behemoth made a global revenue of $88.9 billion just in the months of April, May and June. This prolonged period of high sales has resulted in Amazon taking on an extra 175,000 employees since March.
The first reports of Prime Day getting delayed surfaced at the beginning of April. Reuters alerted us it would be “at least August” before we got Prime Day. It was later indicated by New Street Journal that a date had been confirmed in September.
Now the date seems to be likely in October. According to an email obtained by CNBC, Amazon gave a third-party seller a date of October 5th. Which fits in with the event traditionally starting on Monday.
“We have not made any announcements regarding Prime Day,” an Amazon spokesperson told CNBC. However, the email read “A definitive date will be announced as we get closer to the event”.
Covid has caused people to endure financial hardship and the public will have a voracity for great deals so this is a key opportunity to keep customers happy and appease the relationships it has with some of its more valued tech producers.
This sentiment can be seen by the email that goes on to say “We are looking forward to seeing submissions that offer the most delight to customers during one of the biggest shopping days of the year, Prime Day!”
The only event that may change the date of Prime Day from 5th October is the launch of Apple’s iPhone 12. Apple is a giant company and its new releases are zealously anticipated by the biggest tech buffs.
Apple normally releases the new iPhone in September but it had announced earlier in the year that due to delays it will likely be October. Leaks from Jon Prosser tell us the iPhone 12 will be ready for release on October 19th but consumers will have to wait till November for the iPhone 12 Max.
There were rumours that the date of Prime Day could be postponed to later in the month but considering the iPhone 12’s launch date and the fact that the iPhone 11 is said to have sold 12 million units in its first month it stands to reason that an earlier Prime Day date will serve Amazon well.
Amazon is eager to return its logistics operation to normal after it was inundated with orders during the initial pandemic panic which led to inventory shortages and delivery delays.
A successful Prime Day is a part of that plan.
They originally made a pledge to hire 100,000 employees back in March. One month later they had fulfilled that commitment and went on to create an additional extra 75,000 jobs.
From June 125.000 of those positions became full time and 50,000 workers have been offered a seasonal contract.
It is not just its number of employees that the e-commerce giant is looking to increase, the company has made moves that signify they are looking to increase their number of fulfilment centres across the US.
According to the Wall Street Journal, Amazon is having talks with Simon Property Group regarding them setting up additional distribution centres and shipping hubs.
Simon Property Group is one of the biggest players in the US shopping mall real estate market. Considering a partnership with Amazon is a wise move given so many retail closures. Shopping malls have started to empty and the pandemic induced lockdown did not help. Even JC Penny has filed for bankruptcy.
Satellite distribution centres are not only a clever way to handle a high frequency of orders during the pandemic but offer several environmental and economical benefits too.
When it comes to distribution the “last mile” is always the most expensive. Shortening it could mean saving time, money and reducing the carbon footprint.
It is entirely likely customers could choose to visit a local Amazon Drive through which acts as a pickup and drop off facility.
Not only would this cut delivery expenses but imagine how much they could reduce their packaging and reliance on corrugated cardboard.
So if Amazon could get the deal done it would be a massive win. Not just for Prime Day but for ongoing operations too.
How was Prime day in India?
As we mentioned earlier India is the only country to have already experienced Prime Day 2020. Amazon wanted to make sure there was some distance from the festival of Diwali in mid November.
Diwali is India's biggest gift giving holiday so Indian’s don’t need any encouragement to spend during this time. However Amazon could not wait until September because of Pitru Paksha, a fortnight where Hindu’s pay obeisance to their ancestors.
This meant the early August was the best time to host the event. “After a lot of conversations, we decided to go ahead with Prime Day” commented Akshay Sahi, Amazon India’s head of Prime. “Life has to go on. Sellers have to get back on their feet.”
Thus leaving 6th & 7th August the best dates for India to have Prime Day.
Logistically it was a bit of a rush for Amazon to get all of its Covid safety precautions in place but they needed to make sure they could stave off it’s competition gaining market share. Walmart owned rival Flipkart and India’s homegrown largest retailer Reliance are proving to be intense competition for Amazon.
Reliance Industries have launched their grocery delivery service in 200 cities called Jio Platforms. Jio has also expanded into clothing and electronics. Flipkart hosted a Big Savings day sales event on the same date clashing with Prime Day.
In the past India has been quite theatrical about the launch of Prime Day. They celebrate the event with street food, costume parties and Bollywood dancing but this year preparations have been far more focused on ensuring the safety of customers, delivery man and employees.
Amazon has gone as far as to make over a hundred process changes in its buildings ushering in new rules on temperature checks, face coverings and regular hand cleaning. A raise in body temperature means an employee will have to stay at home for three days.
Leading up to the event Amazon executives were keeping a close eye on how things were unfolding. By working closely with local governments all over India they could monitor different cities and regions.
“Our tech offers real-time visibility as neighborhoods become containment zones or cities go into lockdown” said head of Amazon’s supply chain, Prakash Kumar.
In reality India’s Prime day was an experiment. They were the third country to hit one million coronavirus cases, after Brazil and the US. The experience has highlighted the need for efforts adapting during the pandemic. These adjustments have proven instructive in other countries yet to have Prime Day, like the US.
Not only did this experiment provide them with mass amounts of data to use elsewhere the day itself had proven a massive success.
Amazon India accrued double the amount of new Prime members this year than they did for Prime Day 2019. This is only made even more exciting by virtue of the fact that 65% of these new members come from outside of India’s top 10 cities. This truly speaks to the metamorphic effects Amazon has on the way a country trades.
“This Prime Day was dedicated to our small business (SMB) partners, who have been increasingly looking to amazon to keep their businesses running” exclaimed Amit Agarwal, Senior Vice President and Country Manager of Amazon India.
“This was our biggest Prime Day ever for small businesses - nearly one million SMB sellers (70% of which are from small towns) received orders from across 97% of India’s pin-codes” Agarwal went on to explain. This wide embrasement of Prime Day is responsible for 4,000 SMB making sales of over one million Indian Rupees.
All in all
Coronavirus has presented additional complications for almost everything in 2020.
However, Amazon has thrived since the spring and shows no signs of slowing down.
Their competitors are learning of ways to replicate online success but are no where near closing the gap thanks to Amazon’s expertise and infrastructure.
Amazon has proved they can accelerate Prime membership and achieve flourishing sales.
If this does scream success then just realise they managed to connect 91,000 SMB with millions of members across 97% of India’s pin-codes all with 50,000 new temp employees following extra safety protocols, in a country that is notorious for being chaotic.
Now they are able to transfer these lessons to countries like the US who have ten times the amount of prime members. Amazon is not only beholden to their shareholders but to their members, manufacturers and partners too that need this manufactured online shopping holiday to be executed correctly.