Amazon Defies Consumer Confidence Jitters
The bargains began rolling in ahead of July 12 - Amazon’s Prime Day, the epic e-commerce event of the year. With over 100,000 deals available in ten countries, the 2nd annual ‘Christmas in July’ shopping day offers more than ample incentive to become an Amazon Prime member to access the savings as well as the popular entertainment features now available to subscribers.
Prime originally offered free unlimited next day delivery - still part of the package which has expanded to include video and music streaming services, access to the Kindle Lending Library and Kindle First as well as unlimited cloud-based photo storage. Customers in central and east London can save a trip to the shop by test driving AmazonFresh, UK’s newly launched grocery delivery service. It costs just £6.99 per month (additional to the annual membership fee) with same day delivery from a selection of about 130,000 items on orders placed by lunchtime. Not a bad bargain considering the first month is free and you can save yourself the £79 (or $99) annual membership by cancelling before the month is up.
One Day Event Sales Set to Double
Last year the US’s largest e-commerce company had its best sales ever at Prime Day’s inaugural event. Worldwide subscribers ordered 34.4 million items which averaged 398 purchases per second, with televisions being the most popular product. Amazon didn’t release figures for the day’s profits, but research by MKM Partners estimated the revenues topped $375 million or, according to our calculations, some £291,106,130.
According to a report issued by MarketWatch, the number of Prime members grew by 51% in 2015. Amazon CEO Jeff Bezos says the Prime programme subscribes “tens of millions of members worldwide”. This increased membership, the additional merchants that have joined Amazon, and the success of similar one day sales events combine toward the expectation that Amazon will double the sales it saw in last year’s single day sales event. This doesn’t even take into account the increased sales that will have already taken place in the two-week countdown.
Amazon Imitating Alibaba’s Singles Day
‘Manufactured’ holidays have proven highly successful to stimulating e-sales, as evidenced by Alibaba’s ‘Singles Day’, the marketing event that inspired Amazon’s Prime Day. Now in its fifth year, the target audience is unmarried Chinese consumers. It takes place on the 11th day of the 11th month with revenues dwarfing those Amazon saw last year. Alibaba Group Holding Ltd saw a total of 91.2 billion yuan, some $14.32 billion, in total value of transactions during its Singles' Day shopping event in 2015, the Chinese e-commerce giant reported.
Amazon Creating over 3,000 UK Jobs This Year - So Far
Amazon isn’t just offering bargains; as the company expands its UK operations it’s serving up another 1,000 jobs across the UK. This is in addition to the creation of 2,500 new positions earlier this year which had already brought the total number of full-time Amazon UK employees to 15,500. Since 2010, Amazon has invested over £4.6bn (€5.4bn, $6bn) in its UK business.
Doug Gurr, head of Amazon UK said: "We are hiring for all types of roles from software engineers, computer programmers and corporate managers in our R&D centres and head office, to operations managers, engineers, service technicians, HR roles and order fulfilment roles in our fulfilment centres."
Consumer Confidence Unscathed at Amazon
Neither Brexit, nor the recent survey showing a sharp decrease in UK consumer confidence seem to be having any negative effect on either sales or Amazon UK’s expansion. In response to Brexit questions, Gurr said: "We don't know what the impact will be. As far as we're concerned right now, we're keeping our heads down and continuing to do what we do. We'll deal with whatever situation arises."
Market research firm GfK released the results of a poll of 2,000 people online that showed a drop in consumer confidence to levels seen 21 years earlier. The survey suggested that 60% of consumers anticipate the general economic situation to worsen over the next year, compared with 46% in June. A mere 20% expect the economy to improve. This hasn’t been felt in sales at Amazon, however according to Gurr, "Our sales are in line with expectations. It's business as usual as far as we are concerned."
Prime Day deals begin at midnight, with new offers added every five minutes. For those shopping for the best deals, camelcamelcamel is a free app that works in addition to the alerts Amazon offers when prices drop on items that have been wishlisted or added to shopping carts.