Amazon wants some Alibaba magic on Prime Day
- 14 July, 2015 06:17
Amazon is doing its best to jack up sales by inventing a new shopping holiday, but one thing it hasn't invented is a new idea.
The e-commerce giant is trying to get people pumped up about Prime Day this Wednesday, but its only the latest example of a company manufacturing a "holiday" for the sole purpose of selling stuff.
Online retailers jumped on this about 10 years ago by capitalizing on "cyber Monday." Timed as the Monday immediately following Thanksgiving, it attempts to extend brick-and-mortar "black Friday" shopping fever to online stores and has proved to be very successful. Most estimates put 2014 "cyber Monday" sales in the range of US$2 billion.
But what Amazon really seems to be mimicking is Alibaba's hugely successful "singles day" in China." Alibaba's pitch to consumers on November 11 (Get it? 11/11 for "singles") is simple: You're a single guy or girl, no one's buying you gifts so go-ahead and treat yourself.
It's a flimsy basis for a shopping holiday but it hits a nerve. Through its Tmall and Taobao sites, Alibaba sold $9.3 billion of goods on singles day in 2014.
That's more than Amazon sells worldwide in an entire month.
Not only is it a remarkably effective way to sell things, it's also been a superb marketing gimmick. Thanks in part to a massive, photogenic display wall that tallies up sales in real time, Alibaba received significant media exposure both in China and around the world.
Amazon's Prime Day is also about selling stuff, but it comes with an admission price. As the name suggests, it's open to members of Amazon's Prime subscription service, an annual $99 shopping club that offers free shipping and other benefits. If you're not a Prime member, Amazon is offering a free trial, presumably with the expectation that many of those attracted by the deals will forget to cancel the membership during the trial period and end up with it for a year.
Getting consumers signed up to Prime is important for Amazon. The free delivery service helps ensure people stay loyal to its service, and Amazon has loaded additional perks on the membership, like a streaming video library, to help persuade customers that it's worth the price even if you don't buy a lot of stuff.
That loyalty will be key as Alibaba attempts to expand its sales footprint -- and that of single's day -- outside of China, and as Amazon invests in new sales channels such as drones. The company is on a mission to completely replace shopping trips for consumers, and Amazon Prime is a big part of that push.
Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is email@example.com