Amazon Sets Prime Day Sales Record; Other Retailers Enjoy Digital Promotional Success

Jeff has been reporting, analyzing and opining about the retail grocery business since 1973. He has served as publisher of Food Trade News and Food World since 1978 and as president since 2007. He can be reached at jeff@foodtradenews.com.

Technically it was a two-day event, but Amazon’s annual “Prime Day” promotion broke all online records for digital revenue amassed during a 24 or 48 hour period. This year’s event was expanded from 2018’s 36-hour promotion and wasn’t plagued by the level of technical difficulties that the company experienced last year.

While “Godzilla” has yet to release official sales data from “Prime Day,” research firm Adobe Analytics estimated that sales for the event neared $4 billion with the second-day’s revenue topping the $2 billion mark. The annual promotion surpassed the sales of “Cyber Monday” and “Black Friday” combined.

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Amazon did disclose that it sold more than 100,000 laptop computers, 200,000 televisions and 300,000 sets of headphones. And while food carved out a relatively small slice of the large pie, sales reportedly increased in that arena, too, as Amazon more aggressively ramped up promotional activity at its Whole Foods platform. All told, the Seattle-based mega-merchant said it sold more than 175 million items.

However, according to another research firm, Captify, while Amazon signed up thousands of new Prime members before the promotion (at $119 per year), a record number of new signees canceled their memberships the next day (18 times as many as the day before the event began). Prime members have up to 30 days to cancel their memberships and still would have been able to qualify for the deep discounts offered.

One “halo” effect of “Prime Day” has been the success of other retailers’ digital efforts to also capture some of the promotional mojo. This year Target unveiled its 24-hour “Deal Day” promotion and claimed it was the “highest single day of traffic and sales” on its website this year. No membership was needed to qualify for Target’s promotion and the Minneapolis-based mass merchant was offering a free six-month membership for same-day delivery service via its Shipt division (usually $99 annually).

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Walmart, too, got in the game with a slightly different approach. The Bentonville Behemoth actually began its online event (at walmart.com) a day before Amazon did (July 14) and continued the promotion for four days.

Reports indicate that more than 250 retailers participated in some type of promotional event to at the least offset some of the success that “Prime Days” has generated in the past. And while it appears that those counter-marketing efforts did little to slow Amazon’s momentum, the online “Christmas in July” type promotion spurred measurable online revenue gains by many that participated.

Ironically, Amazon’s share price dipped slightly after the promotion ended. Amazon opened at an eye-popping $2,015 per share when “Prime Days” began on July 15, spiked to $2,021 on July 16 and was a mere $1,978 per share at the close of business on Wednesday July 18.

Hey, we all know that Amazon can mystify the gods of Wall Street and deserves credit for arguably being the most innovative and risk-taking retail companies of the past 25 years, but one question lingers in my mind: will they ever be able to grab grocery market share at the same level as other retail segments they’ve successfully penetrated?

Local Notes

Ahold Delhaize USA’s Retail Business Services (RBS) unit will open a fresh processing facility and culinary innovation center in Kingston, RI this fall. The facility will process fresh food items for area grocery stores, including cut fruit and cut vegetables; leaf, grain and pasta salads; sandwiches, wraps, and other items commonly found in deli or grab and go sections of supermarkets. Initially the facility, which will fall under RBS subsidiary Infinity Fresh Kitchen, will serve the Hannaford and Stop & Shop brands. The retailer purchased the processing plant from large produce grower/supplier Taylor Farms which will manage the workforce and operations. “As the services company of Ahold Delhaize USA, the largest retail grocery group on the East Coast, Retail Business Services is charged with finding innovative solutions that enable the local grocery brands we support to focus on serving their customers,” said Roger Wheeler, president of RBS. “Infinity Fresh Kitchen is the latest example of this innovation, which will help our retail partners bring the latest fresh, convenient items to their customers.” In addition to significant capacity for processing fresh food items, the facility will include a Culinary Innovation Center that will continually test new, fresh, private brand food concepts. The new fresh food facility is expected to add about 250 jobs. Giant/Martin’s will open its second (of four) Heirloom Markets in Philadelphia on August 2 at 3401 Chestnut Street in the city’s University City (Penn, Drexel) neighborhood. The 9,950 square foot unit follows the company’s first Heirloom specialty store which opened in January on Bainbridge Street.  Future stores are planned for the Northern Liberties neighborhood located at 1002 North Second Street, and one in Queen Village, at 201 South Street. And a tip of the hat to Giant/Martin’s, Weis and Redner’s for once again hosting their annual charity golf outings. All three retailers do a great job of saluting their vendors while also raising millions of dollars for mainly local charities.

From the obit desk, we have some deaths to report. I was saddened to hear of the passing of Jack DiFiore, 89, former president of A&P’s Super Fresh division, and one of the good guys in our business. A native of Camden, NJ, “Gentleman Jack” joined the Tea Company in 1949. He rose through the ranks, becoming president of the chain’s Super Fresh unit in 1984. He later became COO of A&P’s Waldbaum’s banner in the 1990’s before retiring. I have only good things to say about Jack – he was kind and fair and always willing to discuss the challenges that his company was facing…Elijah “Pumpsie” Green is also dead. Green, 85, was the first African-American baseball player to don a Red Sox uniform. That may not seem so remarkable if it hadn’t occurred in 1959, 12 years after Jackie Robinson helped integrate the sport. It was the racism of longtime Sawx owner Tom Yawkey that prevented any black players from joining his team long after all other Major League clubs had become integrated, so Green’s rather brief pinch-running appearance on July 21 of that year in Comiskey Park in Chicago became notable. Green’s career was pedestrian in nature; the shortstop/second baseman batted .246 in 344 games for both the Red Sox and Mets. While Green’s debut with the Sox was historical in nature, he’s also part of one of baseball’s funniest and wackiest stories. In 1962, after a blowout loss to the Yankees in New York, the team bus, in route to the airport for a game the next day in Washington, got stuck in traffic. After a while nature called, so Green and his teammate pitcher Gene Conley (who also played in the NBA) got off the bus to find relief. When they returned, the bus was gone, and with time on their hands, both Green and Conley visited a local saloon. Green returned to the team the next day (but missed both games of a doubleheader), however, Conley was nowhere to be found. While still in a drunken stupor, he attempted to board a plane to Israel, but with no passport he was not allowed on the flight. Conley spent the next three days at the Waldorf-Astoria and at Toots Shor’s bar, before reporting back to the team.

Thinking about doing something different this summer? Perhaps staying at a slightly offbeat place? Why not rent the Oscar Mayer Wienermobile for a night? Beginning July 24, interested parties can go online (at Airbnb.com which will connect you to a link) to request a one-night stay in the “doghouse” for $136 on August 1, 2 or 3 in downtown Chicago. While the 27-foot tube steak-shaped vehicle has no bathroom, kitchen, TV or wi-fi, it does come with a mini-fridge stocked with hot dogs, and a roller grill. The bed, near the steering wheel can be converted into a couch with a throw pillow that reads “I’m just here for the hot dogs.” The promotion celebrates National Hot Dog Day which occurred on July 17. I can think of worse places to get a good night’s sleep.