Prime Day: Not just for Amazon, Target is also booming. So what now?

Target
Michele caprini
24 Jul 2018
On 17 July, Target, historical American retailer, scaled new heights for visits and sales on its online shopping site. The performance coincided with Amazon's record-breaking Prime Day, but differed substantially in mode.

17 July will be remembered as a historic date for Target, which has always been one of the most important players in the US Retail sector. On that day, according to its own findings, the Minneapolis-based company recorded the highest number of visitors and the highest sales volume for any day in 2018.

The performance is particularly important because it was recorded at the same time as Amazon's Prime Day, which took place this 16-17 July.

Target's annual summer sales event included offers with various discount levels for different merchandise categories. Among the most popular items were small household appliances, products for children, beauty and personal care, as well as home and technology.

Almost 90% of Target.com's orders will be processed by the points of sale. This testifies to the retailer's efforts to manage the traffic generated by online commerce through the local network.

Tuesday's offers were added to a promotion at a 15% discount for teachers on school supplies. If midsummer is usually not a great time for shopping in the United States, "back-to-school" is the second most profitable sales season in the industry.

Particular emphasis was placed on the communication of promotional sales being available for all customers, not only for those with a type of subscription to a certain service.

To encourage purchases during the event, Target offered a free six-month Shipt subscription to customers who spent over $100. Shipt is the day delivery service with registration to the service costing $99 a year.

The opposite of Amazon's practice, which requires Prime Day purchasers to have a Prime subscription.

A majority (63%) of consumers, when answering questions from Alix Partners, one of America's largest management consulting companies, said that they had decided to make a purchase on Amazon Prime Day this year. Half said they had already done so in 2017 and 39% said they will look for bargains at other retailers (31% in 2017).

Attention is now naturally focused on the profitability of these commercial events. The high costs of carrying out online promotional campaigns must also be taken into account, in addition to the discounts per day. A problem exacerbated by the extension of Amazon's sale to 36 hours.

According to Charlie O'Shea, Moody's retail analyst, the phenomenon "increases pressure on all stores, with negative consequences on profits across the industry... more than ever, we expect other retailers to offer a large dose of promotional campaigns before, during and after Prime Day, and some of the competitors face the tough decision on how much to lower prices".