Amazon’s Prime Day evolves to become must-shop event

Bloomberg

Amazon.com Inc.’s fourth annual Prime Day event lured shoppers from around the world, highlighting the promotion’s evolution from a rummage sale of obscure products to 36 hours of discounts on major brands such as Samsonite luggage, Callaway golf clubs and General Mills cereals.
It’s a sharp contrast from the first Prime Day in 2015, when customers kvetched on social media about underwhelming offerings that resembled a warehouse clearance sale.
This year’s product depth demonstrates the leverage the e-commerce giant has when providing access to its loyal Prime subscribers who pay fees in exchange for shipping discounts, video streaming and other benefits. Many brands decided it’s smarter to offer steep discounts and pay Amazon for advertising to win sales on the site than to sit out an event
estimated to generate $3.4 billion in spending.
Procter & Gamble Co. offered 25 percent off Tide laundry products. Callaway Golf Co. offered as much as 50 percent off golf clubs and accessories and Under Armour Inc. had discounts of about 40 percent on clothing and sneakers, according to data from Boomerang Commerce, which helps brands set prices and ad pricing on the web store.
“This symbiotic relationship between Amazon and leading brands legitimizes Prime Day, as well as those brands serious about stepping up their e-commerce game,” said Guru Hariharan, CEO of Boomerang.
Amazon doesn’t release Prime Day sales figures. Spending increased 89 percent from a year earlier during the first 12 hours of the event, according to estimates from Feedvisor, which sells pricing software used by Amazon merchants. The sales boost came despite technical glitches that hobbled the early hours of the promotion. Many shoppers were disappointed when they couldn’t add products to their carts or their attempts to search for goods prompted an error page featuring dog photos.
Amazon acknowledged the issues, but has yet to explain what caused the crash. One possibility is that the website was attacked by bots designed to snatch up deals so buyers can sell them elsewhere, or those designed to lock up inventory to protect a product’s prices on other sites, said Ben Zilberman, marketing manager at Radware, a cybersecurity company in Israel. Bot attacks are common on retail sites during big promotions, and Amazon featured a lot of “captchas” used to distinguish humans from robots during the sale, an indication it was fending off bot traffic, he said.
“When traffic comes in such high volumes, it makes it difficult to run the security to distinguish between a regular customer and a bot,” Zilberman said. The flood of traffic is good for Amazon’s fast-growing advertising business, a profitable revenue source that supplements its low-margin e-commerce business strapped with high shipping costs. Brands and merchants buy advertising to gain prominence on the site, helping Amazon make more money on the popular platform.