While shoppers are scouring for deals, analysts are watching whether Amazon’s annual Prime Day sale on Tuesday and Wednesday can bring “momentum” to its slowing e-commerce business. As Prime Day has grown — from 34 million items sold during the inaugural 2015 event to 300 million last year — so has its competition. Rivals Target and Walmart are both holding sales that not only overlap with Prime Day, but are pointedly open to the public (Prime Day is a members-only affair). For its part, Amazon is attempting to woo shoppers with invite-only deals and a “noticeable” increase in personalization.
- Insider Intelligence projects Prime Day sales of $12.9 billion for Amazon, up from $11 billion last year. Target and Walmart are expected to rake in a combined $5.45 billion.
- A rival faction within the Amazon Labor Union filed a complaint Monday in federal court to try to compel a leadership election.
By Ruiqi Chen, Editor at LinkedIn News
Target’s 4-Word Strategy for Beating Amazon’s Prime Day Is a Stroke of Genius
Sometimes the best way to compete is to do something completely different.
Every year, Amazon offers Prime Day — a two-day event with shopping deals — in the middle of the summer. It’s a pretty successful strategy, driving billions of revenue at what would otherwise be one of the slowest times of the year for retailers.
It’s become such an institution — like back-to-school shopping — that Amazon isn’t the one getting in on the event. Walmart has its own event, called “Deals for Days.” And, of course, Target is back with its membership shopping event — this year called “Circle Days.”
There is an interesting difference, however, when it comes to Target. First of all, unlike Prime Day — which is actually two days — Target’s event is a week long. Also, Amazon and Walmart both charge a fee for their membership program and, therefore, their respective deals. Target doesn’t. And the retailer isn’t shy about telling you the best thing about its Prime Day rival: “No membership fee required.”
Those four words are such a brilliant way to differentiate what Target is doing. Look, it’s really not all that complicated: Not paying $139 a year is almost always better than paying $139 a year.
Yes, Amazon Prime has other benefits, and if those are valuable to you, that’s great. We pay for Prime because we buy a lot of things from Amazon, and the free shipping is probably worth it alone.
Target isn’t trying to compete with Amazon by getting Amazon’s customers to quit shopping at Amazon or paying for Prime so they can pay for its membership instead. You literally can’t pay for Target’s membership program. And Target’s strategy is to make it easy to have both.
First of all, it’s not the same type of thing. Target doesn’t even think of it as a membership program — at least, not in the same way as Amazon Prime. It calls it a rewards program. The main benefit is that members receive 1 percent back which can be used off future purchases.
Sure, there are a few other benefits. For example, Target has partnered with Apple to offer trials of its services, like Apple Arcade and Apple Music — but you can get those same offers elsewhere.
But, more importantly, it’s free. Target doesn’t charge anything for its Circle Membership. Granted, it doesn’t come with a lot of the benefits you get with Prime. For example, you don’t get a streaming video service with Target’s membership.
The point, however, is that it doesn’t cost you anything to sign up and save money during Target’s Prime Day competitor. Target is eliminating the friction of signing up for a paid membership in order to participate in its shopping event.
And if Target can get people to sign up for its free rewards program, that’s a win even if they aren’t paying for it. In the long run, those customers are a lot more likely to keep shopping at Target.
