Amazon Prime Day 2019 Predictions: How will Amazon squeeze the most out of Prime Day?
Amazon will have two goals for Prime Day 2019: upsell current members and attract new members from lower-income households.
Current Prime Day ecosystem
Consumers cite cost as the main reason to not be a Prime member.
Prediction: Prime membership acquisition will include more cost-conscious messaging to target the lower-income shopper.
Likely bets for Prime Day 2019
Amazon will boast convenient shipping capabilities
In its Q1 Earnings Report, Amazon highlighted the high demand for two-hour shipping, especially for its Whole Foods Market, and promised to grow the service in existing metros and expand its coverage. In April, the company announced an $800M investment to ensure one-day shipping as a standard for all Prime members, reflecting Amazon’s efforts to redefine the shipping ecosystem and customer expectations.
“Amazon shoppers who get same-day delivery are likely to spend and shop more on the e-commerce site compared with shoppers who don’t get same-day delivery….48% of same-day delivery customers said they spend over $800 a year on Amazon, compared with 33% of those without the same-day shipping option,” according to CNBC.com.
Prediction: To grow a customer’s average annual spend, convenience is key, as it facilitates impulse purchases and mimics the immediacy experienced in a brick-and-mortar store. Expect fast-shipping capabilities to be a main highlight of Prime Day 2019.
Amazon Store Card Credit Builder will be the catalyst for new Prime members in the U.S.
In June 2019, Amazon launched a store card with Synchrony that targets a new profile of shoppers: those working to improve their credit and lower-income households.
According to Amazon, “The Amazon Credit Builder functions and looks like the Amazon Store Card, with the exception that the credit line on the Amazon Credit Builder card will equal the amount of the refundable security deposit that you must maintain with Synchrony Bank.”
The launch is timely, especially as the biggest hurdle for more membership sign-ups is that it’s out-of-budget for potential consumers.
Prediction: The card will appeal to non-Prime members who view a membership as too costly. Expect membership discounts associated with the card surrounding Prime Day.
Amazon will make room for Apple sales among its Amazon branded products
Amazon has a plethora of branded products to push: new Echo Show, beauty products, Kindle Oasis, and additional discounts on Whole Foods products. But ensuring greater revenue from Prime customers will involve providing very popular products of other brands. Case in point: Apple.
Apple became a verified re-seller for its refurbished products on Amazon in November 2018. Since then, Amazon has welcomed more Apple services to its suite of products: Apple Music and Apple TV are now available on Alexa and Fire devices, indicating a strengthened partnership.
Prediction: Amazon will leverage the Apple products to help increase the average annual spend of its Prime members. Expect increased rewards or product bundling of Apple products for Prime Day 2019.
Amazon will promote its pharmaceutical product offering
Customers in the U.S. can now use their Flexible Spending Account and Health Savings Account debit cards towards eligible purchases on Amazon, eliminating the need to pay out-of-pocket or submit receipts for reimbursement.
Since Amazon’s purchase of Pillpack in 2018, the retailer quietly made moves to establish itself in the healthcare space through expanding its pharmacy licenses in new states and announcing FSA and HSA payment options.
Prediction: A new industry will help Amazon further ingrain itself into the lives of its Prime members, increasing the revenue potential of its members. Expect Amazon to encourage Prime members to switch prescriptions to Pillpack through gift cards or discounts.
What we think
Amazon is in new territory, and its saturation point of Prime memberships will usher in a new era of strategy for the company: work to increase the annual spend per customer as well as prioritize lower income individuals to join the Prime ecosystem. Prime Day 2019 will reflect these strategies and highlight the breadth of convenient services and products the retailer offers while catering more to lower income individuals.