Well, today, July 16th is Prime Day. Until tomorrow midnight, Amazon is offering special deals, which creates a major sales opportunity in an otherwise quiet retail season. While Amazon does not divulge exact results, they did tell that results in 2017 increased 60% from the year before, and Jeff Bezos expected even better results this year. Actually, never mind that. As of this morning, Amazon's stock is up $17/share. X the 485million shares outstanding, that is an increase in market cap of $8.25billion. As a point of reference, Macy's market cap is $11 billion, Bed Bath & Beyond is $2.7billion, and Target's is $21billion. So, without the sales results, Amazon has gained 3 Bed Bath and Beyond, 3/4 of a Macy's, and 40% of a Target.
Holy Crap! The rest of the retail world is rushing to defend itself by creating their own events:
1. Target.com- 25-40% off online Tuesday 7/17 only (wait-that is like trying to start Black Friday sales on Saturday, right?)
2. Macys.com- "Black Friday in July." Extra 25% off Extra 15% off blah blah Macy's usual discount doublespeak.
3. Bed Bath & Beyond- "Beyond Week A.K.A. Summer's Black Friday." Various deals.
4. Gap and Gap.com- The only one to mention in store although I am sure this will be the case for all-"The Great Gap Sale" up to 70% off.
5. JC Penney- "Cyber in July" online only extra 30% off.
6. Rite Aid- 30% off online
7. Best Buy- Big Deals Days 2 day sale online only although I believe if you walked in to the store to buy a 50" TV rather than have them ship it they would give you the price..
1. Walmart.com- No special deals mentioned. Prideful and stupid, just because you didn't think of it first? Wonder what their sales will be YOY for the 2 days..
2. Ebay.com- This is interesting. "1 day of deals?! We're here all year. NO memberships. Just Kick Ass. Oh yeah, that will make me shop on Ebay today rather than Amazon and most everywhere else!
Again, pride goeth before a fall, right? Which is what will happen to their sales for the next two days.
So what's the bottom line of all this?
1. I think retailers have no choice but to follow
2. I don't believe the positive impact for the followers will be anywhere near that of Amazon.
3. Amazon owns this event. So it will be the first and maybe last place to visit.
4. IF you are an Amazon shopper, your visit to the others may be parenthetical.
I wonder what the cost of the markdowns will be for the others, and what will be the impact on their bottom line and sales/sq. foot in their stores because a. nobody is buying anything at regular price today or tomorrow so unit price will be lower; and b. since they are pushing online as the source of discounts, they are cannibalizing their own in-store business.
What this really shows is the cowish herd nature of American retailers, the lack of aggressive marketing, and basically the fear and trembling of anything Amazon does. So why didn't they come up with the idea-actually, Amazon shamelessly stole it from the Singles Day Event in China (11/11) which has been going on for years.
So Amazon changes the world-again. Further cements its dominance of online retail. BUT WAIT- this year Whole Foods joins the party. Sometime in the future the other retailers may just need to close for these two days and save the money.
Actually, Amazon has some practical reasons for a Prime Day in July, according to one Seeking Alpha analyst:
1. Increase the perceived value of the Prime membership fee;
2. Reduce seasonality and thus logistical surges;
3. Add Whole Foods and thus, brick & mortar, to their influence;
4. Mess with the heads and cause panic, maybe stampede, amongst the rest of the retail herd.
So what are we going to do, retailers? Keep following, or come up with some bold ideas that will establish you as a leader, not a bovine herd, and raise your market cap by 1% or more in one morning?
I truly am embarrassed for you, because Amazon didn't reinvent the wheel. They just made it spin faster. IF I were CEO or CMO of one of the other guys, I would not sleep until I came up with something to make my store stand out from the crowd- and from Amazon.