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E-commerce

Deals abound, but site crash plagues Prime Day

Amazon’s annual shopping event, Prime Day, kicked off yesterday at noon in Australia, promising steep discounts on a wide range of items.

But shoppers were left disappointed in the early hours of the sale, when the e-commerce giant’s website and app crashed, reportedly due to the high volume of traffic.

“The good news is that after extensive marketing and hype, Amazon has clearly pushed demand for its Prime extravaganza to an all-time high – maybe even more than it anticipated,” said GlobalData Retail’s managing director, Neil Saunders.

According to Downdetector.com, a website that monitors site outages, Amazon began experiencing problems shortly after the event kicked off. Downdetector’s outage map indicates that users around the world had trouble accessing the site, though most glitches appear to have occurred in the US.

Saunders noted the irony of Amazon’s website crashing, since the company provides technology for other websites to handle large volumes of traffic.

“The failure of Amazon’s systems and sites is rare: the online behemoth is one of the most advanced digital retailers and is usually able to cope with even extremely high levels of demand,” he said.

“There is no doubt that this will erode sales and deter some customers from buying. The outage is especially problematic as many of Amazon’s Prime deals are promoted for a set window of time – something that could cause a great deal of frustration for potential customers.”

US$3.4 billion on the line

According to Coresight Research, Amazon was expected to bring in US$3.4 billion from Prime Day, up more than 40 percent from last year.

While it is too soon to say what impact the outage will have on the company’s revenue, Saunders believes Prime Day is likely to be a financial success even with the glitch.

In a perverse way, the site crash itself is an indicator of the event’s popularity. But with local Prime Day deals available to Australian shoppers for the first time this year, some wonder whether the event holds the same appeal in Australia as Amazon’s home market of the US.

A review of 435 Prime Day deals on Amazon.com.au by Market Track Global found that the average discount on items is 35.4 per cent.

Market Track Global noted that the deepest discounts so far are for the Braun TributeCollection Bench Blender at 82 per cent off and the NUK Thermo Express Bottle Opener at 80 per cent off, but many of Amazon’s own products are also steeply discounted:

“In the early going, you’re seeing a lot of deals for Amazon-branded and Alexa-connected products, and the discounts are compelling. We looked at about 15 early deals for Amazon and AmazonBasics brands and shoppers are saving over 40 per cent off on average for these products.”

Prime membership the true measure

However, the most significant measure of Prime Day’s success in Australia may not be the number of transactions made on the site over the course of 36 hours, but rather the number of people who sign up for Prime during the event.

Research firm Starcom noted that the biggest jumps in Prime membership have traditionally occurred during key shopping events like Black Friday, Christmas and Prime Day.

“Based on our initial analysis and knowing that in the US more new customers joined Prime on Prime Day 2017 than on any single day in Amazon history, we believe Amazon Prime Day, set to take place on July 16, will be a critical factor in boosting membership numbers in Australia,” Starcom’s director of audience & measurement solutions, Nicole Conroy, said.

According to Starcom’s research, 52 per cent of visitors to Amazon’s Australia site said they are likely to join Prime, which offers members free shipping and returns, access to exclusive deals and digital content, among other benefits, for an annual fee of $59.

Starcom also found that those who sign up for Prime tend to spend 4.6 times more, buy three times more frequently and feel more connected to Amazon than non-prime members.

Given the slow initial uptake of Amazon in Australia, the e-commerce giant has a strong incentive to boost Prime membership and, subsequently, sales Down Under.

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