The Data Behind Amazon’s Prime Day Sale
By Aditi Bhat
By now a lot of us know that E-commerves thrives because of data science. From storing purchase data to generating predictive data customer loyalty and engagement for E-commerce largely depends on data science. The growing trends in machine learning mixed with the right amount of analytics is the secret behind their recipe for harvesting the large profits. The world’s largest online retailer Amazon was one of the pioneers in using data to their benefit.
Amazon has the ideal route to maximize its sales using data science. One of the E-commerce giant’s key features is its premium experience called Amazon Prime and it is marketed as the best online experience any retailer could provide. As of 2017, Amazon has a prime membership of 80 million and it constantly strives to drive this number up. Since 2015, it has been spiking the Prime subscription and their sales exponentially with a 24-hour event called ‘Prime Day Sale’. Similar in concept to the American Black Friday sale, Prime Day offers unbelievable deals on a wide range of their products and services and these deals are available till products last.
How does data drive sales on Prime day?
So how does Amazon use data science as a tool to get more consumers into buying things from their website on Prime day? The statistical analysis of the data squeezed from the previous sales patterns, which depends on numerous factors like location, category and products is the key to recreating this magic every year, and it keeps getting better each time.
Data that blew the roof:
After the 2015 Prime Day sale retailers around the world were mind blown; it was the largest Amazon device sale worldwide and had surpassed the record for user traffic set by Cyber Monday and Black Friday by 19% and 23% respectively. The amazement at the figures was only until the 2016 edition arrived. It sold twice the number of Television sets, headphones and laptops. Sales climbed rapidly across the US and European market. If this trend continues, Data predicts that sales could hit between $800 million and $960 million for the 2017 edition, with it being launched in thirteen new countries.
Insights that improved the sales:
The very first Prime Day sale was noted as being bigger than ‘Black Friday 2014’ which had created a record for the amount of sales and traffic. Amazon sold 398 items per second and its total revenue increase rocketed by 90% in the USA, despite the enormous deals and discounts. Television show box sets, Electronic gadgets such as laptops and headphones sold the most. Using this data, the 2016 Prime day drove its sale up by 60% than the previous year, selling 636 items per second. Deals on televisions, groceries, clothing and other fashion products were promoted better. Amazon used a special algorithm that let it determine which deals should be released as teasers and promotions to keep the users engaged. Data also reflected technical issues such as page rendering delay and the loss that resulted in; 1% loss was incurred for every 1 second delay in page load and in the 2016 Prime Day sale, Amazon fixed the glitch, hastening its page load by 5 seconds.
Prime Day in India:
In 2017, Amazon is launching their flagship event, Prime day in India too, aiming at acquiring a firm grip on sales in the country against the domestic competitor Flipkart. The fact that Prime loyalty service gained one of every three orders for itself in the Great Indian Sale platform gives solid expectations for Amazon for the Prime day. The Indian consumers are presented with overwhelming deals on areas like gardening, electronics, beauty, interior decoration and books for this 30 hours sale. Their data on sales shows that by signing up to the prime services, customers tend to spend more than twice the amount as non-Prime members. With these data, Amazon can construct the perfect marketing plan to tackle the Indian market by predicting the client behavioral patterns.
2017 Prime Day predictions:
Data predicts that deals on Amazon’s brand electronic devices such as Fire stick, Kindle and Echo will continue to ace the top-rated and sought after. Prime membership is predicted to skyrocket before and after the sale day. The overall sales could be between $800 million and $960 million. In all, the Prime Day sales this year has a lot of data scientists enthused about what is to come and how it will be.
Data is the driving force behind a lot of fascinating things in the world and sales are no exception to it. It is interesting to see how data has driven one of the globe’s biggest online sales towards progressive success. This is only one example of the fact that all it takes to change the world and keep it moving is a smart algorithm!
What are some of your predictions for the 2017 Prime Day sale? Tell us in the comments.