If Amazon Couldn’t Prepare For Prime Day’s Traffic Overload, Can Anyone?
Amazon went viral on Prime Day for the wrong reasons; the e-Commerce giant experienced site outages within an hour after deals started at 3 pm EST. The glitches revealed that Prime Day promotions may have worked a little too well. Despite the problems, Amazon still saw an 89% year-over-year sales boost within the first 12 hours of the shopping event.
The RTP team discusses whether any retailer can truly prepare for a major sales spike if Amazon can’t, and whether it’s even possible for Amazon to prepare a dry run for an event as massive as Prime Day.
Debbie Hauss,
Editor-in-Chief: Amazingly enough, Amazon survived site outages during the start of Prime Day 2018, reporting an 89% increase in sales in the first 12 hours of the event, compared to last year. Although total sales for the event have not yet been publicized, some deals are reportedly still available hours after Prime Day officially ended, including Alexa devices and Nintendo products. This could indicate Prime Day 2018 might not reach its expected $3.4 billion. Also, Amazon stock prices took a hit following the site glitches: After rising more than 1.5% early on Monday, it closed at only about 0.5% up; and was continuing to fall approximately 1% in after-hours trading. Generally, I don’t think the site outages are going to have a long-term negative impact on Amazon; in fact, I think some consumers may have tried harder to complete their purchases, knowing there was a lot of competition for the deals.
Adam Blair, Executive Editor: Covering Amazon has become a bit like covering today’s crazy political scene: you start to see conspiracies everywhere. So my first thought when reports trickled in that Prime Day was experiencing glitches was, ‘I wonder if Amazon is doing this on purpose to get more attention?’ After all, nobody remarks when the soup is hot, the steak is done right and the dessert is delicious; they only demand to see the restaurant manager when things go wrong. A more likely explanation, though, is that no e-Commerce infrastructure — not even the mighty Amazon’s — can withstand the artificially created traffic spike of a Prime Day without at least a few hiccups. (And the technical glitches don’t seem to have interfered materially with what looks like another record-breaking Prime Day.) Whether it was self-inflicted or accidental, Prime Day will serve as a “stress test” to help Amazon prep for the upcoming holiday season. It would be a good idea for other retailers to work out their e-Commerce kinks prior to Q4.
Glenn Taylor, Senior Editor: The results have been too good for Amazon since Prime Day sales kicked off to truly cause long-term concern for them, but Internet bandwidth (or its lack) isn’t something that should be taken lightly under any circumstance. Retailers should take note that this has to be a priority immediately, especially with the back-to-school season around the corner. In my recent conversation with Jim Fosina, CEO of Fosina Marketing Group, he shared the possibility that Amazon is so calculated and mathematically on top of things that it’s possible the company knew a slight overload would occur on its site — one that got people talking until everybody knew about it. While we will never know if that’s the case, it does show that the company can thrive even when a slight wrench is tossed in its plans, especially on its biggest day of the year. The “dogs of Amazon” factor definitely helped matters throughout the outages — people were genuinely excited to see what new dog would pop up on their screen. If anything though, the site mishap is going to give Amazon an excuse to fortify its AWS platform even more ahead of the holiday season to ensure that it is firing on all cylinders. The rest of the industry will have to do the same.
Bryan Wassel, Associate Editor: It should come as no surprise that even Amazon wasn’t able to keep up with the traffic of Prime Day: Amazon’s share of the U.S. e-Commerce market is 49%, accounting for 5% of all retail in the country, according to TechCrunch. A retailer on this scale can’t do a dry run, if only because its major sales involve a significant fraction of the U.S. population accessing its web site simultaneously. Still, whatever caused the crash will be useful data for Black Friday and the holiday season, helping the e-Commerce titan prep for what may be its biggest year yet. We’ll see if the recent collaboration between Walmart and Microsoft will put a dent in Amazon’s online dominance, or if the crash was just a hiccup on its route to total domination of the channel.