What’s Behind Amazon’s Latest Boastful Press Release?
Amazon is known for giving few concrete details and lots of questionably useful facts in its press releases, so investors have to weed through the noise if they want to understand the impact of the company’s most recent Prime Day, an annual promotional event that wrapped up on Tuesday.
The company said that this year’s Prime Day generated more sales than either Black Friday or Cyber Monday, but for Amazon, the event is more about boosting customer loyalty than it is about selling lots of batteries and cookware. And the company gave a number of indications that it’s working on engaging customers more.
For one, Amazon said that the Echo Dot, its miniature Alexa-enabled device, was the best selling product in any category on Prime Day. Amazon lowered the price considerably on the device, offering it for $34.99 instead of $49.99, but it was likely a small price to pay to hook more people on the Amazon ecosystem.
Amazon, with its Echo family, already has a huge lead on Alphabet and its Google Home voice-controlled speaker, and the Dot buying spree further extends that. Amazon also gave customers a discount if they ordered an item using Alexa, getting people in the habit of buying items in new ways.
Of course, Prime Day is also about picking up more Prime members, and the company said that it picked up more subscriptions on this day than on any other. While statements like this without actual numbers to back them up aren’t terribly useful, Piper Jaffray analyst Michael Olson thinks it’s a good sign that Amazon tends to make this claim two or three times a year, since it implies “compounding” interest in Prime.
“Driving more Prime adoption and pushing consumers to have an Alexa enabled device will, over time, increase order volume and train users to become comfortable with voice ordering, a pre-cursor to becoming comfortable with automated consumption,” he wrote.
Big Picture: Amazon boosted its Prime subscribers and sold more Echo devices on Prime Day, drawing even more customers into its ecosystem.