Prime Day Hurts Smaller Competitors

It's official: While Amazon.com’s second-annual Prime Day drove millions of sales for the e-commerce giant on July 12, smaller retailers received fewer visitors, converted fewer sales and pulled in less revenue, at least according to a report by e-commerce website developer Blue Acorn. Things seemed to go back to normal the next day, according to the report, which  looked at sales data from 22 of its clients that sell a range of products from apparel and cosmetics to toys and technology.

Total Retail's Take: Amazon's Prime Day was successful for the retailer, and my prediction is that it will be bigger and better next year. What its success shows is that a goliath retailer has the power to create a manufactured holiday that will resonate with consumers — e.g.,— Amazon's Prime Day, Alibaba's Singles Day. However, as the study shows, the impact only extends to the large retailer that created the event. Small retailers should stay away from "Prime"-oriented deals and promotions, and chalk up a loss on Prime Day going forward. However, it might be interesting for SMBs to experiment with a special "sale day" of their own for their most loyally customers. If it works for Amazon on the large scale, it might very well work for smaller retailers on a small scale.