Unprecedented Success: Key Takeaways from July Prime Day 2023 that Shattered Sales Records and Surprised Businesses Worldwide!
This is the fourth article of the series “Launching & Scaling on Amazon” by Betsy McGinn and Jeannie Stamberger, after a brief summer hiatus. Betsy McGinn (founder of McGinn eComm) scaled Seventh Generation eCommerce from $0 to millions and now prepares major Brands for success on Amazon Jeannie Stamberger runs The AmaZone, an Amazon Brand Management Agency that has facilitated over $100M+ in Amazon sales. We pull on our extensive backgrounds preparing, launching and scaling sales on Amazon, to bring you tactical tips and tricks to sell on Amazon. It is primarily for Food and Beverage Brands and the US marketplace (Amazon.com), but most tips apply to other CPG Brands.
Prime Day has been a popular Amazon event since 2015, but in recent years has been seeming to lose momentum - that is until July 2023. Much to industry surprise, Prime Day 2023 came back with a vengeance, breaking records and leaving many sellers marveling at unprecedented sales rates.
Here are some of the top takeaways from this year’s impressive event.
It was the biggest sales day in history for many Amazon Sellers. During the first day of Prime Day 2023 (the biggest day according to Amazon), we saw record sales across many brands, including some of the largest. We witnessed remarkable surges in sales, making it the most lucrative day in history for many brands. On average, our Brands' sales on Day 1 of Prime Day 2023 were an impressive 128% higher compared to Day 1 of Prime Day 2022. We have several Brands who achieved their highest revenue day ever on Amazon, surpassing their previous records by a staggering 7-114% and outperforming Prime Day 2022 by 33-600+%. The first day of Prime Day saw a more substantial sales increase than the second day (on average, 38% higher sales on Day 1 compared to Day 2). These remarkable sales figures during Prime Day 2023 demonstrate the immense growth and potential for CPG brands on the Amazon platform.
Discounts drove it all! Brands that offered Prime Day discounts experienced enormous sales peaks, with daily surges reaching several hundred percent compared to their typical sales. Prime discounts typically began at 20% and, if brands had excess inventory or products approaching expiration discounts often increased to higher percentages. This strategy allowed brands to clear out excess stock and prepare for the upcoming Q4 season. Brands that typically refrain from running discounts but decided to participate saw the most significant percentage increase in sales. On average, our brands offered an 18% discount during the event, with discounts ranging from 5% to 30%. It's worth noting that even Brands who did not offer deals on Prime Day still experienced a slight increase in sales, although their sales uplift was considerably smaller. We observed varying daily sell-through lifts for different products/categories. For example, offering 15% off Best Deals resulted in a wide range of sell-through rates by category from 83% to a whopping 579% boost in daily sell-through rates depending on the product line (low to high: pasta sauce, coffee, organic grocery, supplements). We also noticed a strong halo effect in purchases of items not on sale from customers driving to the Brand store page from paid ads and other conversion drivers. These findings demonstrate the substantial impact of Prime Day on sales and the effectiveness of strategic discounting strategies in driving consumer engagement and boosting revenue.
Prime Day goals differ for every seller. While seeing sales spikes can be exciting for sellers, it’s important to know the goal with Prime Day. When it comes down to it, Amazon is the biggest financial beneficiary of Prime Day - they are the ones truly raking in the dough on these blow-out sales days, leaving sellers to take the hit in profits. Analyzing profit margins prior to setting discounts is crucial to ensuring success on Prime Day. In the end, a great sales day doesn’t serve the business if each sale ends up costing money without the potential benefit of acquiring a long-term or repeat consumer. That said, our Brands used Prime Day to target specific goals like increasing brand awareness, increasing sales (even at a reduced margin), reconnecting with repeat customers, or moving through excess inventory.
Ad Spend was off the charts. Advertising spend was +320% for Day 1 vs. Day 1 2022 and Cost Per Click (CPC) was over $6 on average across our Brands and their respective categories. Despite these spikes in CPC and overall ad spend, the increase in sales was proportionally much larger. For example, one Brand had record high ad spend that was about 2.5x the average daily spending, but the sales were 4-5x higher. So, while Brands spent more on Amazon ads during this event, all saw a return on investment to justify the increased ad spend. A cautionary note: it may be wise to have expert management of Amazon ads to control spending, optimize return on investment and ensure the brand is maintaining profitability throughout these high-sales/high-traffic events.
Why was 2023 Prime Day so different from 2022? Some speculate that there was deal fatigue in 2022, while this article Prime Day pushes US economy up 6% suggests shoppers in 2023 used this Prime day for purchases they held off, stocking up on low cost items, and purchasing big ticket items.
To capitalize on Prime Day success and navigate Amazon with confidence, reach out to an Amazon Consultant like The AmaZone. Our seasoned team, led by Jeannie Stamberger, has facilitated over $100M+ in Amazon sales, ensuring brands thrive amidst challenges. From reinstatement support to strategic guidance, we're here to elevate your Amazon journey. Contact us today to secure your brand's lasting success.
