Amazon launches its first ‘Prime Day’ in honour of its 20th birthday, Wednesday 15th July. Amazon claims there will be more deals than on Black Friday 2014 with thousands of ‘Lightning Deals’ and six popular ‘Deals of the Day’ all available exclusively to subscribers of Amazon Prime. Thomas Slide, UK Retail Analyst at Mintel, takes a look at the how the day could impact the UK market…

Amazon Prime Day will have more deals than Black Friday but they are exclusive to Prime members and this event comes at a time of year when most retailers are on sale anyway. As a result, the event is unlikely to have the same impact as Black Friday. Mintel’s research found that 11% of internet users bought gifts on Black Friday with 13% saying they waited for products to go into sale before buying presents.

Instead, Amazon Prime Day is more about promoting and growing membership of its Amazon Prime service than it is about driving sales at a slow time of year; though that is of course a convenient byproduct.

Amazon says there are currently millions of Prime subscribers in the UK and it has seen year-on-year growth in excess of 50%. Prime membership usually costs £79 annually but in the run up to the event Amazon has been offering reduced price memberships for £59 for those who want to take advantage of the sale.

Once someone has become a subscriber, Amazon effectively has an added price advantage over any competitor because they can offer next day free delivery. It will be much harder for other retailers to compete on price and service to win that customer back once they are a subscriber and this is where Amazon sees value.

Ultimately, Prime Day is all about driving long term loyalty rather than making short term sales and there is little doubt that Amazon sees growing Prime membership as an essential element of its future growth.

Thomas Slide is Retail Analyst at Mintel working as part of Mintel’s dedicated retail team, writing a range of European retail reports. Prior to joining Mintel Thomas previously worked for Lightspeed GMI, Rainmaker Consulting, John Lewis and Debenhams.

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