This report is the second in a three-part series recapping Prime Day 2018. The first installment covered our high-level initial insights based on deal volume and discount levels. The third installment is going to cover the Top Prime Day Performers and how they succeeded.
Prime Day (PD) has come and gone and now that the dust has settled we’ve had an opportunity to crunch the numbers and share our insights from notable trends, top performing deals and consumer behaviors.
For the purposes of this article, we’ve closely analyzed the Health & Personal Care segment. HPC experienced tremendous growth and can act as a vertical slice, representative of the greater trends witnessed during Prime Day 2018. Let’s take a look at the most successful promotions, the biggest hits and misses, and the lessons brands can learn to help them generate the most return from future Prime Day promotional investments.
By the Numbers
In total sales value, Health & Personal Care grew 55% Year-over-Year (YoY) during Prime Week 2018. The most growth took place in the Hair Care and Oral Care categories.
With a number of effective promotional strategies, brands helped to drive HPC to be a top performing product group during Prime Day. Brands offered compelling discounts for consumers on both mass market and luxury items, leveraged multi-layered promotions, and partnered with 3rd party deal sites and social media to drive additional traffic to their listings. Furthermore, the most successful brands proactively invested in spinning their flywheels prior to the rollout of their Prime Day deals in order to build traffic and interest, giving them the necessary head start to fully capitalize on Prime Day – as long as they remained in stock.
Like in previous years, promotions were spread most heavily towards Lightning Deals and the Amazon-tagged “Event Deal”. Let’s take a look at some of the specific deals that stood out in 2018.
How to Win with a New/Replacement Listing
Introducing a new listing to Amazon is always a challenge. Amazon’s algorithms reward items for having a long sales history and large collection of ratings and reviews, so breaking into the market with a brand new listing requires some unique strategic thinking.
A leading brand launched a new electric toothbrush on Amazon in May. Knowing that Prime Day would be an opportunity to feature this item, they took some specific steps to prepare for a successful promotion:
- They listed the new item as a variation on the detail page for the previous model, which link the existing ratings and reviews to the new item. A strong rating and review count is paramount to a successful promotion.
- To jumpstart the sales of this premium item, they reduced the price by a whopping 50%. This “go-big” price drop played well with Prime Day shoppers, always hunting for the best deals on luxury items they wouldn’t normally buy at full price.
- Lowering the price on an electric toothbrush leads to a spike in sales of replacement heads and encourages automatic re-orders via subscribe and save, which can generate a sustained long-term lift.
These efforts had extraordinary results. Unfortunately for the brand, this incredible lift was more than they had anticipated. As can be the case with new items, stock may be limited initially and out-of-stocks can easily surprise a brand due to the limited sales history. In this case, the brand went out of stock while selling in huge volumes, causing them to lose momentum and resulting in post-Prime Day average weekly sales to stabilize only slightly above pre-Prime Day volumes. During the out-of-stock period, an avalanche of 3P sellers quickly rose up to fill the void and capitalize on the post-promotion benefits of a higher search rank, traffic and sales.
Taking the Long View
Another electric toothbrush from a major competitor was more aggressive in price during Prime Day 2018 than in the previous year, resulting in a slight decline in revenue (-4% YoY). However, the deeper discount drove a sales volume increase of +37% YoY and helped make up for the revenue loss by earning the brand more new customers, improving search rankings, and driving up the review count. Specifically, the following tactics helped the brand capitalize on all those post-Prime Day benefits:
- They dropped the price of this item a few months prior to Prime Week and leveraged coupons to help fuel sales/search rank. When the promotional period hit, their price dropped even further, helping this electric toothbrush become one of the top selling items in Oral Care.
- This item remained consistently in stock during and following Prime Day, allowing it to capture the full benefits of the “halo effect” – when a short-term spike in sales permanently improves an item’s performance.
- They further improved this item’s sales rank by offering a competitive price and turning on coupons post-Prime Day to maintain momentum and customer engagement.
- They also used sites like Slickdeals.net to publish additional promo codes to drive outside traffic to their Amazon listings.
If it Ain’t Broke, Don’t Fix It
For Prime Day 2018, a leading brand decided to run the exact same deal on their water flosser as they did in 2017. While many brands are tempted to “outdo themselves” by offering a steeper discount in an effort to drive more YoY growth, this brand leveraged the organic growth experienced by the Oral Care category over the course of the past 12 months to drive traffic to their already successful flosser.
While it was not the top item in Oral Care in terms of revenue, this item was the biggest unit volume seller. During Prime Week sales nearly tripled, which improved the item’s organic search rank and drove a lift in sales through the subsequent weeks. In addition, the brand experienced greater customer engagement. Getting more units into customers’ hands typically results in more reviews, and when those units come at a discounted price, they often receive a higher rating. In this instance, the item earned more than 300 new customer reviews (a 3% increase) which drove an average rating increase of +0.3pts. The brand’s key moves were to:
- Leverage placement in the category, invest in price discounts, and maintain in-stock levels during and after Prime Day.
- Capitalize on Prime Day momentum to capture more post-promotion sales at a higher per-unit price.
- Spin the flywheel through fundamentals such as in-stock rates, ratings and reviews, and competitive prices.
For those looking to maintain performance for their top selling items this is the no-brainer approach. Great products at a discount – and consistently in stock – bring more satisfied customers that will reward you with good reviews, ratings, and repeat business.
Leveraging Prime Day to Break Barriers
Over the course of the past year, an emerging skin care brand has been running lightning deals and coupons to drive traffic to their leading item. These promotions kept the flywheel spinning by driving steady sales and new reviews, giving the item a head-start that caused Prime Day to be even more impactful.
Before the promotional period, sales rank for this product would swing from the high 80’s to the top 10 after each lightning deal, a pattern that continued until they secured a lightning deal placement for Prime Day. By leveraging a loyal following of customers built from the successive use of promotions, coupled with the surge in traffic from their Prime Day promotion, their lading item finally broke into the top 20 within Skin Care and reached #1 in the face moisturizer category. Critically, it stayed in stock after the promotion and has been subsequently supported by coupons to help maintain its higher sales/search rank. You can see from the chart below how they’ve maintained their sales rank status post Prime Day.
For brands, the main goal of Prime Day is not capturing the most sales during the event, it’s using the event as a springboard to generate more traffic, engage more consumers, improve brand sentiment, and ultimately drive a permanent sales lift. For example, an established brand used their advanced healing ointment as a loss leader during Prime Day to drive more customers into the subscribe and save program. By combining a 40% off Prime Day lightning deal, plus a coupon, plus a subscribe and save discount, shoppers purchased this $10 item for only $2.67. The brand capitalized on the added traffic during Prime Week to gain more subscribers, locking in repeat consumers and helping to grow long-term incremental revenue.
This kind of “deal stacking” was a big trend during Prime Day 2018, with shoppers growing more deal-savvy every year. Beyond the typical lightning deal or promotion, Prime Day shoppers had plenty of ways to save, such as promo codes found on sites like Slickdeals and generous offers from American Express, Discover, and the Amazon Credit Card. In one example, a customer purchased one of the electric toothbrushes mentioned for only 21% of the regular price by layering the Prime Day promotion with promo codes found on Slickdeals and American Express’ “Pay with Points” 20% Off deal. Huge scores like this are exactly why consumers love Prime Day!
Prime Day 2018 broke all the records – it even broke Amazon for a brief time – and sold over 100M items worldwide. The brand tactics and consumer trends outlined here, which were certainly not limited to the Health & Personal Care category, can help brands prepare for an even bigger Prime Day 2019. In the coming days we will be publishing our profile of the biggest Prime Day winners this year, complete with even more insights for brands. Stay tuned!
About One Click Retail
One Click Retail is the industry’s most accurate source of sales data for the world’s top eCommerce marketplaces. Using a combination of website indexing, machine learning and proprietary software, OCR estimates weekly online sales figures with market leading accuracy in order to deliver the best insights, analytics and strategies to their brand manufacturer clients. To catch a glimpse of how OCR gives brands critical edge on online platforms with our unique data and expertise, subscribe to our weekly eCommerce insights blog, and follow us on Twitter and LinkedIn.
If you are a brand manufacturer who would like to learn more about how you stack up to the competition—or would like to see your market share and category growth insights—email us at firstname.lastname@example.org for a free capabilities demo.