Amazon Prime Day, the e-commerce giant’s annual day of deals, has finally arrived to entice shoppers with sizable discounts on popular items. Recent research from Pymnts.com suggests that 51.3% of US households are expected to have Amazon Prime by the end of the year. That is approximately 69 million homes poised to snatch up Prime Day deals. This year, Amazon has doubled down and will have Prime Deals for two days, on July 15th and 16th and sales are expected to be massive.
Brick and mortar stores should still be aware that many brands will see a residual effect of Prime Day across channels. Once a shopper has committed to a purchase, they tend to stay in the mood to shop. Brands that complement online deals with in-store promotions, will likely see a sales lift. Physical retail is still king; 90% of sales still happen in brick-and-mortar locations, and while 80% of consumers have shopped online, 64% of shoppers prefer to shop in a physical store.
The Online Returns Trap
While e-commerce giant Amazon will likely shatter sales records, there is a fair amount of buyers' remorse in the e-commerce space. Research from Entrepreneur shows that 30% of purchases online are returned, compared with just 8.9% of products purchased in-store. That means there’s a very real danger that much of the revenue consumer brands see on Prime Deals could evaporate, as shoppers realize they don’t actually want or need the product once they’ve seen it in person.
Why such a big difference? The top three reasons for online returns don't typically happen with in-store purchases. Customers returned 20% of merchandise for damage, 22% because the product looked different in person than online, and 23% because the e-commerce retailer sent the wrong item. The ability to touch, feel and try items (and get precisely what they want) in brick and mortar locations makes a customer far less likely to return an item. When you factor in those statistics, along with the fact that Amazon Prime Day(s) will be just 48 hours long, it's clear that smart brands will invest time and energy into in-store execution, even during billion dollar deal days online.
In-Store Experience Still Rules Retail
In-store interactions is where brands can unlock sales in a big way. a big part in driving online sales by giving consumers the chance to try a product before they buy. While online shopping is convenient, the desire to touch, feel and experience products—especially those from high-end brands—before making a purchase is consistent. At least 70% of consumers say they’re more likely to buy a product if they get a chance to try it in store.
Online shopping is also transactional, there is almost no "retailtainment" or customer experience beyond clicking and paying. Physical stores drive higher conversion rates and increase average purchase values because they offer a multi-dimensional experience, where brands have the opportunity to immerse potential customers in their culture.
ThirdChannel data shows that targeted sales efforts during holidays can increase sales 35%. Consumer brands that don’t consider physical store promotions and experiences as part of their Prime Day strategy risk missing out on potential sales offline and online around the busy shopping holiday.
Prime Day—and Beyond
The bottom line is that for consumer brands, Prime Day is a small blip, just two days of frenzied online shopping. Though the opportunity is there for massive sales, the party is over pretty quick. Consumer brands can see sales lifts throughout the year by partnering with a retail intelligence platform. ThirdChannel analyzes data to help brands pinpoint their best store locations, so they can invest resources intelligently and increase sales.
Brick-and-mortar stores provide a channel for year-round promotions in every retail cycle. Consumer brands can intercept and educate customers about their products, truly boost category and brand sales, and create customer loyalty through great in-store experiences.
Interested in learning more about how ThirdChannel can help your brand? Request a free demo now!