Amazon prime day is one of the most anticipated shopping events of the year, offering customers exclusive discounts on a wide range of products.
So we delved deeper into three sought-after categories in electronics on Amazon namely: Headphones, Smartphones, and Smartwatches.
By analyzing almost 12000 unique products in each category, we aim to provide insights into pricing dynamics, discount trends, and how exactly Amazon prime day has played a role in shaping them.
As a leader of the E-commerce platforms, it is also vital to learn about the intricacies behind Amazon’s ecosystem and how your brand can secure Amazon’s buy button, the ultimate button that ensures you make a sale.
The stage was set on July 15th and 16th for Amazon prime day sales 2023. By analyzing SKUs (Stock keeping units) which are unique IDs for each product before and during the prime day, we unraveled the following insights.
Our numbers show a clear increase in the array of products being offered to consumers during sales events, particularly evident on the day of Prime. Among these offerings, a significant proportion consists of newly launched products specifically for the Prime Day Sales event.
Among these categories, Smartphones saw the highest number of new launches with an increase of 18.6% (132 new phones), tailored especially for Prime buyers. The high number of new launches indicates the demand and competition for Smartphones is robust.
The Headphones market comes in second with an average increase of 16.8% (86 new headphones) indicating a competitive market, though this market is slightly less saturated than smartphones.
In contrast, the Watch industry comparatively experienced a lower number of new launches but with a substantial increase of 14.6% (36 new watches).
Within this diverse array of offerings, an interesting question comes forth: Did Amazon Prime really grace its products with lower prices and discounts?
Our numbers show that almost 47% of products maintained their pre-prime day prices showcasing Amazon’s wide range of offerings that cater to everyday market needs.
However, in contrast, only 25% of SKUs present on the 15th of July had discounts offered on them.
What is even more surprising to note is that approximately 11% of all the SKUs on that day were actually more expensive on prime day than the days preceding it.
This indicates a strategic way to capitalise on the increased shopping activity and demand that ensues during Prime Day.
Upon closer inspection, Watches are graced with substantial discounts offered with a whopping 34%.
Yet, this category shows that a moderately significant portion of SKUs (47%) retained their original price without offering any discounts on them.
Smartwatches also depict a comparatively lowest premium of almost 5%.
Among the three categories, Smartphones stand out with the highest count of products with no discounts as 55% of Mobiles show no difference in prices.
With only 21% of Mobiles and Accessories having discounted prices it raises the question as to whether they really are cheaper during Prime. However, it is important to note the market is extremely competitive and even a modest percentage of discounts can lead to substantial savings.
On the other side, this category even charged a premium of 5%.
This premium could indicate supply-demand dynamics. Since Amazon tends to experience increased demand on Prime Day, it sees an opportunity to maximise profits and test higher pricing without deterring sales.
Pricing evidently plays an important role in the market. So delve into the different types ofpricing strategies you can implement to gain a competitive advantage on Amazon
Did the pricing within the three categories take place strategically? Was it necessary for Watches to offer discounts? Could the Mobile industry ensure they don’t take a hit by maintaining prices? We analyse this below:
Volatility is calculated by measuring the rate of change in the difference between prices. This relative change in price is important to understand which market experiences more price fluctuations and which is relatively stable.
Markets with high price volatility highlight the heightened sensitivity of consumers when it comes to price.
Our analysis reveals a noticeable trend across the three categories, where the category of Watches has been subject to drastic fluctuations compared to the category of Headphones and Smartphones.
While Headphones have faced moderate modulations in price during prime, mobiles exhibit the smallest markdowns.
This acts as an indicator of the consumer’s buying behaviour in the market where the prices of phones are relatively inelastic.
However, in the avenue of Watches consumers seem to be extremely price-conscious and discounts significantly influence them.
Case Analysis: To showcase this pattern, our numbers have been distilled for clarity using 2 SKUs each from the category of mobiles and watches.
In the realm of Smart Mobiles, the Price and Rank of mobiles indicate a mild positive correlation between them. This suggests the demand or popularity of mobiles isn’t solely dependent on the prices offered on them.
Discounts offered on Mobiles don’t seem to exceed a certain threshold, with the first SKU – B08444SXZJ offering a maximum discount of 2% and the second SKU – B09QXM4YL1 offering none. But even this minor discount showcases a spectacular improvement in rank by almost 2,000 tiles.
This showcases a dynamic interplay of factors in the category of Mobiles where consumers also heavily consider various other factors such as technical specifications and brand reputation.
Despite the absence of price adjustments during Prime, the second SKU consistently displayed unchanging prices.
However, on the first day of Prime i.e. 15th July, the rank seems to have spectacularly improved showcasing an increase in demand for this mobile irrespective of the absence of discounts.
One key aspect to note here is that by keeping prices unchanged, Redmi’s product substantially dropped by almost 30,000 tiles.
By analysing Redmi’s competitors and their pricing in the market during that period, this downfall could have been avoided. This shows how critical Competitive pricing is in staying competitive in the market.
- But when the spotlight shifts to smartwatches, the story paints a different picture where a pattern of high elasticity is observed.
Garmin’s [SKU – B09RZFLB4J] kept their price constant at Rs 98990 with their rank worsening day by day.
However, exactly at the onset of Prime Day, a discount of almost 15% was offered which significantly improved their rank by 87%.
The correlation between price and rank for watches exhibits an extremely strong relationship.
This insight highlights the extraordinary price sensitivity exhibited by consumers within the Smartwatch industry.
On the other hand, Flipplus appears less attuned to market dynamics.
By keeping their [SKU – B0BMLP2VD2] price constant throughout, even on a critical day like Prime, their rank experiences a drastic fall.
A comprehensive remedy to price right would have been to adopt a dynamic pricing software to ensure their products were priced right.
Utilizing Dynamic pricing, showcased by the successful revenue boost by other E-commerce brands ensures an efficient approach to pricing management.
To keep up with this dynamic environment, it is imperative to learn how AI pricing engines can help you do that.
To learn more about our AI-powered dynamic pricing tool BRIO, reach out to us.