Amazon’s first Prime Day last month, with its promise to surpass Black Friday activity, demonstrated the polarizing nature of an e-commerce platform that can be both powerfully productive and disruptive.
It got the attention of big retailers, such as Walmart and Best Buy, which swiftly countered Amazon with their own online supersales.
‘Contribute To The Noise’
Consider this pre-emptive missive emailed to some housewares vendors by Best Buy: “Of course it’s all over the news that Amazon is having this HUGE sale for [Prime members] starting July 15,” stated the email from Best Buy’s housewares team. “I wanted to reach out and ask what level of involvement will you have [in]this sale? Also to ensure that we are supported wherever necessary.
“We are going to stay steadfast to the offers and what we have going on for that week as we don’t want to contribute to the noise,” the email continued. “But hopefully we will not find too many examples of [Best Buy] being priced out or extreme price matches with any of our cross over products.”
Call it a thinly veiled threat if you will, but it underscores the anxieties stirred by an increasingly volatile retail cauldron in which online deals flare up with little or no notice.
Some observers equated Amazon’s Prime Day to an online garage sale. Maybe, but it’s safe to expect a bigger mid-summer blowout by Amazon next year; and progressively frequent pop-up sales throughout the year by Amazon and copycats. You didn’t think they would let flash sale sites have all the fun, did you?
Forget Black Friday. Or your garden-variety one-day sale. The flexibility and responsiveness of digital commerce threatens to obliterate the traditional retail promotional schedule.
The housewares supply chain needs to be on call 24/7/365 to feed the growing, year-round, deal-of-the-moment appetite of digital retailing— and to do it without compromising everyday business online and in stores.
Don’t expect Amazon to relent, not with Wayfair, Alibaba and other pure- players gaining ground; and not with brick-and-mortar stalwarts optimizing their digital storefronts.
Now comes Jet.com, an online membership club with a plan to let shoppers pile on discounts— sometimes at a gross loss to Jet.com— as they pile on purchases. Jet.com founder Marc Lore, who sold Quidsi to Amazon in 2010, said unabashedly it could take the startup at least five years to gain the membership revenue and sales scale needed to turn a profit. Big-time investors, who’ve already seeded Jet.com with more than $220 million, aren’t flinching.
When a digital retailer can lose millions without shareholder wrath to bulk up distribution and market share, as Amazon has, that’s a powerful advantage.
And when a sudden mid-July promotion can overtake what for decades has been the most sacrosanct deal day of the year in Black Friday, that’s when everyone is left to weigh the difference between productive and disruptive.
Either way, are you ready for prime time all the time?