Amazon gets biggest Prime Day yet (but outage costs $100m in lost sales)

Jul 23, 2018 | E-commerce and E-retailing

Amazon made an estimated $3.4bn in sales on Prime Day this week, but suffered from losses and server issues that may have cost the retailer huge amounts in lost sales.

The sales event was the first since Amazon bought Whole Foods Market.

The e-commerce giant uses the event to push discounts to members of its Prime service, who pay $119 a year to get perks like shipping discounts.

“Prime Day offers us a unique opportunity to thank Prime members with our best deals,” said Jeff Wilke, CEO Worldwide Consumer, Amazon. “Extending Prime Day to a day and a half this year allowed us to further reward members with unbeatable deals, access to exclusive new products and unforgettable experiences that highlight the many benefits of a Prime membership. All of this was made possible because of our many valued associates – the global team that continues to make Prime Day bigger and better.”

Global Highlights from Prime Day 2018

  • A record number of Prime members shopped across 17 countries.
  • Amazon welcomed more new Prime members on July 16 than any previous day in Amazon history.
  • Customers purchased millions of Fire TV devices on Amazon globally during Prime Day.
  • Prime Day was the biggest event ever for Echo devices with screens, Echo Show and Echo Spot.
  • Customers purchased more than five million items in each of the following categories: Toys, Beauty products, PCs and computer accessories, Apparel and Kitchen products.
  • Prime Day was the best event ever for Amazon devices for kids, including Echo Dot Kids Edition, Fire 7 Kids Edition tablet and Fire HD 8 Kids Edition tablet.
  • July 16 was the best day ever for Fire TV devices and Kindle e-readers on Amazon globally.
  • For the first time, members in Australia, Singapore, the Netherlands and Luxembourg participated in Prime Day.
  • Millions of customers around the world streamed Unboxing Prime Day events including the Amazon Music concert with Ariana Grande as well as the PUBG Squad Showdown hosted by Twitch Prime with a performance by deadmau5.

U.S. Highlights from Prime Day 2018

This Prime Day, members enjoyed access to Amazon device deals 12 hours earlier. The Toshiba 4K Ultra HD Fire TV Edition (50-inch) and theToshiba 4K Ultra HD Fire TV Edition (43-inch) are now the best-selling TV deals in Amazon history – together selling over six times as many TVs compared to last year’s record-setting Fire TV Edition. Other highlights include:

  • July 17 was the biggest sales day for smart home devices in Amazon history, with over a million devices sold.
  • Ring had its biggest day ever on Amazon on July 16, with the Ring Video Doorbell Pro selling out.
  • The Amazon Cloud Cam was the best-selling security camera deal in Amazon history.
  • For the first time, U.S. Prime members celebrated Prime Day with a week of savings at Whole Foods Market. Members saved millions of dollars at Whole Foods Market with Prime Day deals, of which the best-selling deal was organic strawberries.
  • Members purchased more than 300,000 Instant Pot 6 Qt 7-in-1 Multi Use and 150,000 LifeStraw Personal Water Filters.
  • Members stocked up for back-to-school and off-to-college season, purchasing millions of pencils and pens.
  • Some of the top sellers from Amazon brands, by category, were Stone & Beam Ceramic Geometric Table L Presto! Ultra Soft Toilet Paper; Daily Ritual Women’s Jersey Short-Sleeve V-Neck T-Shirt Dress and AmazonBasics Pre-Seasoned Cast Iron Skillet.

Prime Day Best Sellers by Country

Customers’ most popular purchase this Prime Day was the Fire TV Stick with Alexa Voice Remote, which was not only the best-selling Amazondevice, but also the best-selling product from any manufacturer in any category across Amazon globally. Top sellers from around the world, excluding Amazon devices, include:

  • U.S.: Instant Pot 6 Qt 7-in-1 Multi Use; 23 and Me DNA Test; LifeStraw Personal Water Filter
  • U.K.: Bosch Cordless Drill; Philips Hue Personal Wireless Lighting Light strip; Finish Dishwasher Tablets
  • Spain: SanDisk Ultra 64GB memory card; Cecotec Conga Excellence 990 4 in 1 iTech 3.0 robot vacuum cleaner
  • Singapore: Coca-Cola Zero Sugar; Play-Doh Shape and Learn Shape a Story; Kleenex Ultra Soft Toilet Tissue
  • Netherlands: Osmart Zigbee Smart Plug; Philips Hue White Ambiance GU10 LED Spot; Sandisk Micro SD
  • Mexico: Ace Powder Laundry Detergent; Amazon Basics USB Lightning Cable
  • Luxembourg: Jamie Oliver Tefal pan; Brita water filter; Solar-lamp in Preserve Jar with USB connector
  • Japan: Top Super Nanox Liquid Laundry Detergent + Extra Large Refill, SAVAS Whey Protein 100 cocoa flavor 1050g
  • Italy: Finish Dishwasher Tabs All in 1 Max; Braun Multi-grooming Kit Precision Trimmer 9-in-1 for beard Styling; Hoover Rechargeable Broom 2-in-1 Freedom
  • India: Redmi Y2 Gold 32 GB smartphone; Tata salt; Mi 10000mAH Li Polymer Power Bank 2i
  • Germany and Austria: PlayStation Plus Membership; Jamie Oliver Pan by Tefal; Osmart Zigbee Smart Plug
  • France: PlayStation Plus Membership; SanDisk Ultra 64GB memory card, TP Link Wi-Fi connected plug
  • China: Philips Sonicare Healthy White HX6730 Toothbrush; Braun Digital Ear Thermometer; Paul & Joe Beaute Moisturizing Foundation
  • Canada: Instant Pot 6 Qt 7-in-1 Multi Use; LifeStraw Personal Water Filter; Bose QuietComfort Noise Cancelling Headphones
  • Belgium: SanDisk Ultra 128GB memory card; Osmart Zigbee Smart Plug; Philips Hue lightbulbs
  • Australia: PlayStation 4 Pro 1TB Console with Bonus Fortnite Content; FIFA 18 for PlayStation 4; Philips Hue lightbulbs

Yahoo News, citing Feedvisor, reported spending during the first 12 hours of the 36-hour long event increased by 89 percent when compared to the beginning hours of last year’s Prime Day.

Amazon’s Prime Day 2018 will last six hours longer, and includes the addition of four more countries as well as deals in its Whole Foods Market stores. Amazon backed Feedvisor, saying that sales during the first 10 hours of Prime Day were up compared to a year ago.

Amazon disclosed in the statement that it sold millions of devices that work with Alexa, its voice-activated digital assistant. The most popular items so far include the Fire TV Stick with Alexa Voice Remote and the Echo Dot speaker, noted the report.

According to TechCrunch, “the actual sales are just icing on the cake – Prime Day’s larger goal is increasing the number of subscribers for its now $119 per year Prime membership program.

Turning online consumers into paying subscribers not only increases Amazon’s subscription revenues, it boosts overall sales …”

Traffic outage

The day didn’t start out so well for Amazon or their Prime members. Traffic loads caused the website to glitch frequently during the first few hours of the event.

A now widely circulated internal document obtained by CNBC details the intense scramble those glitches set off within Amazon and some of the downline problems they caused. Amazon “failed to secure enough servers to handle the traffic surge on Prime Day, causing it to launch a scaled-down backup front page and temporarily kill off all international traffic.”

The document also noted that some warehouses said they weren’t even able to scan products or pack orders for a period of time.

Amazon’s one hour of downtime on Prime Day may have cost it up to $100 million in lost sales.

Amazon’s Prime Day outage caused problems for consumers around the globe last night. Antony Edwards, CTO of performance monitoring and testing company, Eggplant, has comment on the outage:

“Initially, Amazon’s issue felt very like someone had submitted some code that was causing instability between different systems. My guess is that it was between the core application and the content distribution network. I would have expected Amazon could back out the change and get stability back within 1-2 hours, but it looks like that didn’t happen. Either they didn’t know what caused the issue (so their configuration management isn’t that great), or the offending issue caused a downstream tangle that they struggled to get back under control.

I often go to technical meetings and hear “We want to be like Amazon, they release billions of times a day without any issues”. However, even Amazon is fallible when running at this speed. Release Analytics would probably have prevented this problem, alignment between production and testing is key.”

Other retailers capitalise on Prime Day

In the wake of the Whole Foods deal, Kroger and other grocery rivals have faced doubts that they can drive growth as Amazon dives deeper into the industry and pushes shoppers to buy more food online. Kroger has been making digital investments and recently increased its stake in British online grocer Ocado, known for automated warehouses where robots quickly fill orders. Kroger also offers traditional delivery services with partners like Instacart in some markets.

Amazon pushed more deals on food and household products during Prime Day this year, and sales of groceries were up 25 percent, according to Feedvisor. Rival target did not give specific numbers, but said it was “the highest single day of traffic and online sales” this year.

Top-selling items were small appliances, home decorations and baby products, Target said in a release on Wednesday. Target REDcard holders saved an additional 5 percent and received free two-day shipping on most items.

Amazon ‘Prime Day’ by the numbers from CNBC.

All topics

Previous editions

Get email edition

Share This