Tuesday, July 14, 2015

Amazon vs Walmart on Prime Day

Amazon is running an exceedingly clever promotion for its 20th anniversary: For its Prime members only, special deep discounts will be offered throughout the day on July 15th. Think how many consumer behavior hot buttons this marketing tactic pushes:
  • "I'm a member of an elite group" entitled to special privileges not accorded to outsiders--which reinforces the positive associations of paid-up Prime membership.
  • "Limited time only, act now" call to action increases the urgency to click and buy--on Prime Day. And some research indicates that many Prime members will do just that.
  • "Like Black Friday only more bargains" has little competition in the middle of July, when others are running summer clearance sales or back-to-school deals--so Prime Day gets a lot of attention and differentiation.
  • "Members have privileges" as long as they continue to be members--so loyalty increases.
Walmart is going head-to-head with Amazon by aggressively promoting its own special deals on July 15th, intensifying the message that the day is for bargain hunting. "Dare to compare: Top products, lower prices" is Walmart's theme, encouraging consumers to confirm that Walmart's price on featured products is lower than Amazon's price on those same products. Walmart's deals are open to all, whereas Amazon's deals are for Prime members only (Prime membership can be sampled for free for a limited time, of course).

If Prime Day catches on, other retailers may follow (by promoting their own "members only" day or by hitching their wagons to Amazon's day, the way Walmart is doing). Consumers will be the big winners, no matter which retail giant they buy from.

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