Black Friday in July: A Retail Boost in Competition with Amazon

Legal Area: Commercial and Trade Law, Consumer Protection
Industry: Retail Trade

Is “Christmas in July” a bonus for consumers or retailers? Which retailers are coming to the front of the price slashing competition and what products are hot off the shelves? According to retail experts, Amazon raked in an estimated $6 billion in sales during this year’s Amazon Prime Day on July 15-16. The company does not report actual sales for the event, which originally launched in 2015, but it did report selling more than 100,000 laptops, 200,000 televisions, 300,000 headphones and 1 million toys.

More than 250 competitive retailers cashed in with their own “Black Friday in July” events this year, some lasting for up to two weeks, capitalizing on the fact that many consumers check the competition for “deals” before, during and after Prime Day. A research survey from Bazaar Voice prior to the event found that 44 percent of consumers planned to check out Walmart, while 40 percent planned to shop at Target, and significant percentages had other retailers on their Amazon shopping competitor list.

At least one technology reviewer has also noted that website traffic for retailers typically soars during Prime Day events, jumping up as much as 25 to 50 percent above average for some of the Amazon’s best competitors.   

The top-selling categories of goods during this time are typically apparel (purchased by 51 percent of shoppers), home goods and appliances (purchased by 48 percent), and consumer electronics (44 percent).

Back-to-school shopping drives many sales with parents reporting that they plan to spend more than $500 this summer to help their kids get ready for fall. In fact, 84 percent of retailers now report that the days surrounding Prime Day are the most critical time for driving back-to-school sales. As a result, 74 percent of retailers devoted more money to back-to-school promotions this year, and 78 percent offered more discounts on related items this year versus last year.

A number of both retailers and etailers also got a jump on Amazon this year, offering “Black Friday in July” deals early in the month. Dell, for example, began its special sales prices on July 1, Walmart beat Amazon to the punch on July 14, and EBay launched its “crash sale” (poking fun at Amazon’s site crash last year) just before Prime Day started.

Dell has extended the end-of-year holiday shopping metaphors a little further, offering a “Cyber Monday in July” online-only event taking place from July 16 to 22 this year.

The retail industry knows that 69 percent of consumers rank price as the number one factor in shopping, but savvy retailers also focus their promotions on other competitive enticements that consumers value, such as free-shipping, delivery within 48 hours, site-wide discounting, and liberal easy-return policies. In fact, many consumers find it much easier to return items to a brick-and-mortar location rather than boxing and shipping a return, so this is a potential point of advantage for those who offer local in-store return options.

The retail industry has also learned from past “Black Friday in July” events some additional ways in which they can compete with Amazon’s burgeoning empire. Offering consumers “see, feel and touch” experiences in-store can be particularly valuable, especially for many big-ticket items that people want to see in person before buying (often because they had a bad online experience in the past). Some retailers are also partnering with manufacturers who have specific brands and goods that fare better in showrooms rather than online photo lineups.

In addition, retailers who want to feature their deals on a site that offers easy competitive shopping can utilize TheBlackFriday.com site, which offers links to sale promotions for numerous highly reputable retailers.

All in all, Amazon’s Prime Day in July has led to increased activity not just to Amazon, but to hundreds of other retailers and etailers who have participated.

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Timothy Watkins Timothy H. Watkins

Acquisitions and dispositions of office buildings, shopping centers, warehouses and raw land, joint ventures, real property secured and mezzanine loans, and like-kind exchanges are the focus of Tim Watkins' practice. 

Boston - United States

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