ANALYSIS: Amazon’s quest for retail industry domination is boosted by record Prime Day, more subscribers and soaring stock price
Amazon officials jubilantly reported that Prime Day sales grew 60 percent sales growth over the same event in 2016 while Prime membership growth also set a record.
Analysts have estimated that about 70 percent of U.S. households have Prime memberships. But the number of U.S. Prime households grew by more than any other single day in the company’s history.
This likely meant that the company generated more than $1 billion dollars in sales during the 30-hour period that started at 9 p.m. eastern time on July 10.
Amazon Prime Day
The single most popular product sold on Prime Day was the Amazon Echo Dot, the diminutive cousin to the Amazon Echo. The Dot was being sold at its lowest price ever, which helped explain the heavy sales. Meanwhile, the more expensive Echo was being sold at half price, so it also sold well.
Amazon also reduced its entry price for its Music Unlimited service to 99 cents for four months, posing stronger competition for Apple Music. Furthermore Music Unlimited subscribers can play music titles on any device that runs the app, not just Apple devices.
Best Buy got bad news when Amazon announced that it would field a team of experts to help install smart home units, resulting in a stock tumble for Best Buy as investors feared this would mean less work for its Geek Squad.
Instead Amazon’s stock price was the beneficiary of all this activity, rising on July 12 to over $1,000 per share.
During Prime Day, Amazon worked to change consumer attitudes on how retail sales were conducted. There were bonuses for ordering through Alexa, the virtual assistant that runs in Echo devices. Amazon was also quick to point out how fast its Amazon Now service worked on Prime day, with some buyers getting their orders in as little as 12 minutes.
According to Amazon, the fastest deliveries were in Sunnyvale, Calif., Berkeley, Calif. and Kirkland, Wash. to prime members who ordered snacks, writeable DVD packs and a Samsung Internal solid-state storage drive.
Still, Amazon’s instant gratification plans only work in relatively small parts of the U.S. Where Amazon Now isn’t available, the Amazon Prime free 2-day shipping usually takes three or four days, and some of Amazon’s other services, including its expert installation and even its grocery business, simply aren’t available.
But none of that means that Amazon’s plans for retail industry domination are off track. It just means that the company still has work to do. In addition, while Amazon is certainly an influential e-commerce force, it’s not alone. China’s Alibaba is another e-commerce giant that’s gaining ground, according to Fortune’s Global 2000 list. Amazon is in 83rd place and Alibaba is in 140th passing target this year.
In the U.S., however, Amazon is in its own league. Other retailers including Sears. K-Mart and JC Penny are closing stores in their efforts to stay in business, while also beefing up their e-commerce activities.
Originally published on eWeek