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Numbers and Insights: Amazon Prime Day 2021

July 09, 2021 Kelly Kovack
July 09, 2021
Amazon

Last year Prime Day became a bit of a moving target because of COVID. While Amazon didn't disclose sales numbers, it did promote the October event as breaking records for small and medium businesses worldwide, with sales surpassing $3.5 billion—an increase of nearly 60% from 2019. CNBC claimed that Prime Day 2021was more muted compared to prior years. In 2020 Amazon disclosed that third-party sellers brought in $3.5 billion during the event, but this year Amazon opted not to share any hard numbers.

Amazon reported that the two-day period for the event was the biggest ever for Amazon's third-party sellers, most of which are small and medium-sized businesses, selling more than 250 million items during the event.

"It was definitely not a blockbuster event in comparison to last year."
By Mark Power, CEO, Podean

The Numbers:

  • Amazon's gross merchandise sales on Prime Day 2021 totaled $11.19 billion worldwide, up 7.6% from $10.39 billion in 2020 according to estimates from Digital Commerce 360.
  • BofA Global Research estimated that Amazon tallied $9.55 billion in total Prime Day gross merchandise value (GMV), up 7% from $8.95 billion in 2020, which represented a 54% increase from $5.8 billion in 2019.
  • BofA broke down its Prime Day 2021 GMV estimate into $5.6 billion in first-party sales (direct from Amazon), up 5.5%, versus $3.95 billion from third-party sellers (via Amazon's marketplace), up 10% year-over-year.
  • BofA estimated that Amazon sold 255 million items during Prime Day 2021, up from 240 million in 2020 and 175 million in 2019.
  • The average Prime Day order this year was $44.75. Over half (55%) of households shopping Prime Day placed 2+ separate orders, bringing the average household spend to roughly $106.41 according to information from Numerator.
  • Most Prime Day items (76%) sold for under $30, while 5% sold for over $100 according to Numerator.
  • The typical Prime Day shopper was a high-income, suburban female, age 35-44. More than 9 in 10 (98%) of Prime Day shoppers said they were Amazon Prime members, with the majority joining pre-COVID (before March 1, 2020) as reported by Numerator.

Health & Beauty Category:

  • The top categories consumers said they purchased were Health & Beauty (28%), Consumer Electronics (28%), Household Essentials (27%), and Apparel & Shoes (27%).
  • Bobsled Marketing reported of the health and beauty brands in their portfolio, 20% promoted select products, 20% did not participate, and 60% promoted their full portfolio. Coupons and Prime Exclusive Discounts (PEDs) were by far the most popular promos run by Bobsled clients.
  • Similar Web reported skincare category sales were up 56% YOY with 3.8 million units sold and over 2.3x average daily unit sales. Makeup saw an increase of 46.5% in total unit sales, Foot, Hand & Nail Care 42.4% and saw the largest YOY Prime Day lift of 21.2%, Tools & Accessories 36.8%, Haircare 32.7%, Oral Care 29.9%, Fragrance 25.8%, and Shave & Hair Removal 17.6%.
  • More than four million units sold over Prime Day 2021, with Vitamins & Supplements sales growing 44% YoY. Returning customers made up 78% of users according to Similar Web.

Advertising Numbers According to Pacvue:

  • Ad spend increased 38% year-over-year for Prime Day 2021.
  • Broken out by ad type, ad spend increased 41% for Sponsored Products and 28% for Sponsored Brands year-over-year.
  • ROAS declined 9% year-over-year for Sponsored Products on the first day of Prime Day. This is in line with the 6% year-over-year decline in ROAS seen in Pacvue's Q1 2021 CPC report.
  • ROAS increased 30% year-over-year for Sponsored Brands on the first day of Prime Day and increased 23% on the second day. This is a marked shift for Sponsored Brand ads, which have been declining in ROAS for three quarters and were down 12% year-over-year in Pacvue's Q1 2021 CPC report.
  • Many advertisers noted that Sponsored Brand Video performed particularly well this year, with increased placements above the fold and on product detail pages.
  • CPCs increased about 25% year-over-year for Sponsored Products and were relatively flat for Sponsored Brands.
  • While some leading brands have been experiencing supply-chain issues and chose not to invest in Prime Day this year, many advertisers noted increased competition from smaller and emerging sellers, which pushed up the cost of advertising.
  • Paid Search and Paid Social showed increased engagement and higher media costs compared to the previous six weeks, according to the Ovative Group. Social Prime Day costs increased 20% with observed costs up to 27%. Ovative clients saw a CVR increases of +3%, with some clients seeing up to 80% increase. Paid search average costs increased 10% with the highest increase being 30%. The average daily click increase was 4%.

The Prime Day Halo Effect

  • Research from Adobe shows that retailers with annual revenue over $1 billion saw a 29% increase in e-commerce sales during Prime Day compared with an average June day, and retailers that generate less than $10 million annually saw a 21% rise in sales.
  • Data shows that consumers spent over $1.9 billion on more than 70 million small businesses' products during this promotion period, which was an over 100% increase year-over-year compared to Prime Day 2020.
  • The majority of Prime Day shoppers (64%) only shopped at Amazon this Prime Day, but 1 in 5 made a purchase at another retailer.
  • According to Digital Commerce 360's analysis, nearly 51% of the top 250 North American retailers had a "widespread" sales event on their e-commerce sites during Prime Day 2021. Among the top 100, including Walmart and Target, 57% offered a wide-ranging sale and 35.7% held a competing Prime Day sale, including similar language such as "Prime," "two-day sale," or "no membership required," with the latter targeting the requirement of Prime membership to access Prime Day deals.
"Makeup is back! Lip Color and Foundation both had lifts of over 45%." -
By Vanessa Kuykendal, VP Business Development, Market Defense

The Experts Opinion:

There's a pent-up demand for online shopping as consumers look forward to a return to normalcy," Adobe Director of Digital Insights Taylor Schreiner said to CNBC. "The halo effect of Prime Day also played a significant role, giving both large and small online retailers significant revenue lifts.

We currently estimate 28.6% year-over-year GMV growth for Amazon in 2Q 2021, which would be 24.2% without Prime Day," BofA Global Research analysts Justin Post and Michael McGovern wrote in a June 23 research note. "Overall, Prime Day results seem to point to relatively lower growth than usual, but still good enough to support solid 2Q GMV growth on a tough 2Q comp. We see potential for Amazon to gain market share in e-commerce in a post-pandemic recovery.

This year's Prime Day came only eight months after last year's Prime Day, a much shorter time period than the 15 months between Prime Day 2019 and 2020. Amazon also did not add any new countries to Prime Day this year, after adding two last year and four in 2019," BofA's Post and McGovern noted. "Amazon did disclose that 250 million items were sold, which represents a 20% two-year CAGR from 175 million items sold in Prime Day 2019, but likely limited growth versus 2020. Given the shorter period of time since the last Prime Day, the lack of new countries added, and the lack of new disclosures, we believe this was a relatively lower growth Prime Day versus prior years.

Vanessa Kuykendal VP Business Development at Market Defense, "This Prime Day was a big hit for the major players in our prestige beauty portfolio who leveraged their social communities to drive traffic to Amazon. Our brands saw the greatest engagement on Instagram, where brands hyped up their Amazon exclusives and limited-time offers. We expected some competition from other retailers trying to create their own momentum, but they were no match for the social-driven Prime traffic. The Skin Care category had the most winners, with moisturizers and serums leading sales. And Makeup is back! Lip Color and Foundation both had lifts of over 45%.”

Mark Power, CEO of the global Amazon agency Podean, said of Prime Day, "We support many beauty brands on Amazon, both large and small, and in general most of our clients were happy with the results they achieved this past Prime Day. It was definitely not a blockbuster event in comparison to last year, which took place in October after months of delays and much hype and was a huge success for brands that were prepared. Industry estimates suggest Prime Day 2021 grew just 5-10% compared to 2020, whereas it was growing by 50% or more over previous years. The amount of noise and competition for consumer attention is intense on Prime Day; however, beauty and personal care was one of the more successful categories, even though overall this year's event was lackluster."

Dan Sudman, CEO and Co-Founder ofCarbon Beauty, "Prime Day is interesting because historically it has been most relevant for mass-market brands, as opposed to the size of brands we work with, and customers looking to buy new electronics/home appliances, however, we have been experimenting with ways of capturing additional sales from the increased traffic and our ad campaign efforts produced a 35% average increase in sales over the 2-day event period (without even having to offer a discount) and a 62% increase in revenue relative to Prime Day 2020. Interestingly, this lift in sales is higher than what we have heard from comparable brands and resellers who offered discounts and still saw lower growth. Overall, while it may seem intuitive for all brands to participate in the Prime Day discounts, it should be evaluated on a case by case basis, especially for brands that typically wish to avoid discounting their products."

By nature, beauty brands are much less promotional than other industries, and selectively participate in Prime Day, sometimes in a more subtle manner than other categories. That said, beauty brands can still ride the wave of Prime Day and typically see a sales lift of at least 2-3X due to the increased traffic garnered by the event," said SuperOrdinary founder and CEO Julian Reis. He continued, "We believe Prime Day is a great way to acquire new customers versus getting your existing customers to buy more on discount. Our goal is more about introducing ourselves to new customers and getting them to try our brands. Ideally, the sales on Prime Day don't overly cannibalize the sales for the next week or two.

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