amazon prime day preview by fbic global retail tech july 14 prime day preview... · !2 fung...

  1 Fung Business Intelligence Centre Global Retail & Technology Flash Report: amazon prime day preview Competitors Respond to Amazon Prime Day Copyright © 2015 The Fung Group. All rights reserved.

July 14, 2015

PREVIEW Last  week,   Amazon   announced   that   it   is   designating   July   15   as   Prime  Day,   set  merely   6  days  before   its  potential  strong  competitor   jet.com’s  July  21   launch  date.  Amazon  Prime  Day  will  be  a  global   shopping  event  exclusively   for  Amazon  Prime  members  who  will  be  able   to   shop   new   deals   offered   every   10   minutes.   The   announcement   drew   a   strong  response   from  Walmart   and   focused   more   attention   on   Target’s   and   Best   Buy’s   long-­‐standing  tradition  of  holiday-­‐inspired  summer  sales.    

Today  Amazon   released  a  Prime  Day   final   countdown   that  provided  a  preview  of  deals  available  at  various  times  on  July  15. Examples  of  Deals  include:  • Fire  TV  Stick,  fastest  selling  Amazon  device  of  all  time,  $15  off  • Kindle,  $30  off  • Fire  HD  7,  $60  off  • Fire  HD  7  Kids  Edition,  $60  off  • 32-­‐inch  LED  TV,  $75  • 40-­‐inch  1080p  LED  TV,  $115  • Brand-­‐name  32-­‐inch  Smart  HDTV,  under  $200  • 50-­‐inch  4K  TV  bundle,  under  $1000  • Bose  headphones  at  the  lowest  price  ever  on  Amazon  • Chromebook  laptop,  only  $199  • Over  50%  off  two  Nikon  COOLPIX  cameras  • K'NEX  2-­‐in-­‐1  Ferris  Wheel  Building  Set  (Amazon  Exclusive),  $35.99  • K'NEX  Crossfire  Chaos  Roller  Coaster  Building  Set  (Amazon  Exclusive),  $23.99  • Playskool  Heroes  Transformers  Rescue  Bots  Optimus  Prime  Figure  

(Amazon  Exclusive),  $9.99  • Up  to  50%  off  any  of  the  Harry  Potter  books  • Save  more  than  70%  on  the  Divergent  Series  Complete  Box  Set  of  books  • Save  up  to  70%  on  select  kitchen  products  from  top  brands  like  Cuisinart,  KitchenAid,  

Foodsaver  and  Thermos  • Save  up  to  50%  on  select  tools  for  the  DIY  auto  enthusiast  • Connected  Car  and  Scan  Tool  products  starting  at  60%  off  • Road-­‐trip-­‐ready  automotive  products  starting  at  50%  off  • 30%  off  select  clothing,  shoes,  jewelry,  watches  &  more  • Free  luxury  beauty  sample  box  with  $50  purchase  of  luxury  beauty  products,  with  

promo  code  LUXSAMPLES  • Buy  an  Amazon.com  Gift  Card  multipack,  get  $10  in  Amazon.com  promotional  credit  • Get  25%  bonus  Amazon  Coins  when  you  buy  5,000  or  10,000  Amazon  Coins  • Prime  Now  will  also  offer  deals  in  the  six  cities  where  the  service  is  offered  

  2 Fung Business Intelligence Centre Global Retail & Technology Flash Report: amazon prime day preview Competitors Respond to Amazon Prime Day Copyright © 2015 The Fung Group. All rights reserved.

Competitors’ Responses

BEST  BUY  OFFERS  “BLACK  FRIDAY  AND  CYBER  MONDAY”  SALE  IN  LATE  JULY    Best   Buy   is   advertising   its   own  Black   Friday   in   July  event   that   will   run   at   the   end   of   this   month.   Its  summer   deals   are   perfect   for   occasions   such   as  weddings,   graduations,   birthdays,   housewarming  parties   and   family   reunions.   Following   the   Black  Friday,  Best  Buy  is  also  hosting  a  Cyber  Monday  on  July   27   for   special   online   offers.   On   Best   Buy’s  website,   the   promotion   claims   that   there’s   “[n]o  need   to   wait   for   after   Thanksgiving   sales   to   get  

Black  Friday  pricing….”    

This   is  not   the   first   time  Best  Buy  has  held  a  Black  Friday–inspired  sales  event.   Last  year,   the  same  event  occurred  on  July  25  and  26.  Apple  products,  Samsung  smartphones,  Panasonic  TVs,  Jawbone  fitness  trackers  and   Canon   cameras  were   included   in   the   promotion.  However,   the   prices   offered  were   not   close   to   real  Black   Friday   prices,   especially   for   ASUS   laptops   and   Jawbone   activity   trackers,   according   to   some   tech  editors.  

TARGET’S  “BLACK  FRIDAY  IN  JULY”  PROMOTES  APPAREL  AND  ACCESSORIES  BEFORE  PRIME  DAY  Target’s   Black   Friday   in   July   sale   is   not   all  about   stealing   thunder   from   Amazon’s  Prime   Day.   The   company   has   run   the   sale  every   year   since   2010.   This   year,   the  midsummer   event   offers   buy   one,   get   one  50%   off   on   clothes,   shoes,   fragrances   and  other   items   on   the   Sunday   and   Monday  before  July  15  

Last  year,  Target’s  Black  Friday  in  July  sale  was  a  three-­‐  weekend  promotion:  the  first  weekend  focused  on  apparel  and  footwear,  the  second  on  home  items,  and  the  third  on  electronics  and  toys.  WALMART  TO  HOST  A  RIVAL  ONLINE  EXCLUSIVE  SALE  OF  2,000  ITEMS  ON  JULY  15  In  response  to  Amazon’s  Prime  Day,  Walmart  just  revealed  a  rival  sale  on  over  2,000  items  that  will  start  the  same  day  as  Prime  Day,   July  15.  The  2,000  rollbacks   (Walmart’s   term  for  discounts)  will  be  offered  online  exclusively   for   90   days,   not   for   just   “one   day   only”   on   July   15.   In   addition   to   announced   deals   in   the  electronics,   home,   baby   and   toy   categories,   Walmart   promises   some   “atomic   deals.”   The   company   also  lowered  its  minimum  requirement  for  free  shipping,  from  $50  to  $35,  which  will  apply  until  further  notice.  

Walmart’s  upcoming  rollbacks  are  clearly  targeting  Amazon’s  membership-­‐only   Prime   Day   promotion.   In   advertising   its  sale,   Walmart   emphasized   that   its   low   prices   require   no  “admission  fee”  and  are  “available  every  day.”  In  a  blog  post  on   the  Walmart.com   website,   Fernando  Madeira,   President  and  CEO  of  Walmart.com,  said,  “We’ve  heard  some  retailers  are   charging   $100   to   get   access   to   a   sale.   But   the   idea   of  asking   customers   to   pay   extra   in   order   to   save   money   just  doesn’t  add  up  for  us.  We’re  kicking  off  some  awesome  deals  this  week  that  will  be  available  for  everybody  with  no  hidden  

costs  or  admission  fees,  and  they  won’t  be  available  for  just  one  day.”  

Amazon  immediately  reacted  to  the  criticism  by  accusing  its  competitors  of  charging  higher  prices  for  items  in   their   physical   stores   than   they   do   for   the   same   items   online.   “The   idea   of   charging   your   in-­‐store  customers  more   than   your   online  customers   doesn’t   add   up   for   us,   but   it’s   a   good   reminder   that   you’re  usually  better  off  shopping  online,”  said  Greg  Greeley,  Vice  President  of  Amazon  Prime.  

  3 Fung Business Intelligence Centre Global Retail & Technology Flash Report: amazon prime day preview Competitors Respond to Amazon Prime Day Copyright © 2015 The Fung Group. All rights reserved.

   Deborah  Weinswig,  CPA  Executive  Director—Head  of  Global  Retail  &  Technology  Fung  Business  Intelligence  Centre  New  York:  917.655.6790  Hong  Kong:  +852  6119  1779  deborahweinswig@fung1937.com    

Cam  Bolden  cambolden@fung1937.com    Sunny  Chan,  CFA  sunnychan@fung1937.com    Tal  Dor  taldor@fung1937.com    Marie  Driscoll,  CFA  mariedriscoll@fung1937.com    John  Harmon,  CFA  johnharmon@fung1937.com    Aragorn  Ho  aragornho@fung1937.com    John  Mercer  johnmercer@fung1937.com    Swarooprani  Muralidhar  swaroopmuralidhar@fung1937.com    Charlie  Poon  charliepoon@fung1937.com    Kiril  Popov  kirilpopov@fung1937.com    Stephanie  Reilly  stephaniereilly@fung1937.com    Lan  Rosengard  lanrosengard@fung1937.com    Jing  Wang    jingwang@fung1937.com