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The Data behind Amazon’s Prime Day Sale

By now you are probably aware that e-commerce thrives on data science. From storing purchase data to generating predictive data, customer loyalty and engagement for e-commerce players largely depends on data science. Machine learning mixed with the right amount of analytics is the secret behind their recipe for harvesting large profits. The world’s largest online retailer Amazon was one of the pioneers in using data to its benefit.

Amazon has implemented the ideal route to maximize its sales using data science. One of the e-commerce giant’s key features is its premium experience called Amazon Prime, which is marketed as the best online experience any retailer could provide.

As of 2017, Amazon has a Prime membership of 80 million and it constantly strives to drive this number up. Since 2015, it has been spiking the Prime subscription and its sales exponentially with an event called ‘Prime Day Sale’. Similar in concept to the American Black Friday sale, Prime Day offers unbelievable deals on a wide range of Amazon’s products and services and these deals are available till the products last.

How does data drive sales on Prime Day?

So how does Amazon use data science as a tool to get more consumers into buying things from its website on Prime Day? The statistical analysis of the data squeezed from the previous sales patterns, which depends on numerous factors like location, category, and products is the key to recreating this magic every year, and it keeps getting better each time.

Data that blew the roof: 

After the 2015 Prime Day sale, retailers around the world were mind blown; it was the largest Amazon device sale worldwide and had surpassed the record for user traffic set by Cyber Monday and Black Friday by 19% and 23% respectively. The amazement at the figures was only until the 2016 edition arrived. It sold twice the number of television sets, headphone, and laptops. Sales climbed rapidly across the US and European market.

If this trend continues, data scientists predict that sales could hit between $800 million and $960 million for the 2017 edition.

Insights that improved the sales:

The very first Prime Day sale was noted as being bigger than ‘Black Friday 2014’, which had created a record for the sales and traffic it had generated. Amazon sold 398 items per second and its total revenue rocketed by 90% in the US, despite the enormous deals and discounts. Television sets, and electronic gadgets such as laptops and headphones sold the most.

Using this data, the 2016 Prime Day drove its sale up by 60% than the previous year, selling 636 items per second. Deals on televisions, groceries, clothing and other fashion products were promoted better. Amazon used a special algorithm that let it determine, which deals should be released as teasers and promotions to keep the users engaged. Data also reflected technical issues such as page rendering delay and the loss that resulted in; 1% loss was incurred for every 1-second delay in page load time and in the 2016 Prime Day sale, Amazon fixed the glitch, hastening its page load by 5 seconds.

Prime Day in India:

This year, Amazon has launched its flagship event, Prime Day in India too, aiming at acquiring a firm grip on sales in the country against the domestic competitor Flipkart. The fact that Prime loyalty service gained one of every three orders for itself in the Great Indian Sale gives solid expectations for the Prime Day.

Indian consumers are being presented overwhelming deals on items like electronics, beauty products and books for this 30-hour sale. Its data on sales shows that by signing up to the Prime services, customers tend to spend more than twice the amount as non-Prime members. With this data, Amazon can construct the perfect marketing plan to tackle the Indian market by predicting the client behavioral patterns.

2017 Prime Day predictions:

Data predicts that deals on Amazon’s electronic devices such as Fire TV Stick, Kindle and Echo will continue to be favorites. Prime membership is predicted to skyrocket before and after the sale day. As mentioned earlier, the overall sales could be between $800 million and $960 million. In all, the Prime Day sale this year has a lot of data scientists enthused about what is to come and how it will be.

Data is the driving force behind a lot of fascinating things in the world and sales are no exception to it. It is interesting to see how data has driven one of the globe’s biggest online sales towards progressive success. This is only one example of the fact that all it takes to change the world and keep it moving is a smart algorithm!

We love sales and we love how psyched we all get (okay, most of us get) about them! So here are some of the memes about Amazon Prime Day that got us rolling on the floor (and they are so relatable!):

Source: Quickmeme

Source: Imgur

Source: Komando

What are some of your predictions for the 2017 Prime Day sale? Tell us in the comments section.

About MGADS

Manipal Global Academy of Data Science offers cutting-edge learning solutions in the field of data science. MGADS faculty comprises of academicians, data science experts, and IT professionals to guide you in today’s competitive environment. If you are keen on becoming a data scientist, MGADS will equip you to do the same.

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