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Here's what other retailers can do to compete with Amazon on Prime Day

Here's what other retailers can do to compete with Amazon on Prime Day


Before Prime Day was a thing, 7/11 was synonymous with free Slurpees. Now, the convenience store's famed summer holiday shares a calendar date with e-commerce heavy weight Amazon.

Prime Day, for the uninitiated, is Amazon's annual blockbuster sales event taking place on July 11. The second annual iteration of the event in 2016 was so popular it handed Amazon its biggest sales day in history, the company said. So, you can bet the digital retailer is aiming for another year of epic sales.


Amazon has promised to deliver big on deals and is even extending the shopping from 24 hours to 30 hours beginning at 9 p.m. ET on July 10.

But, if you're not Amazon, what's a retailer to do?

Two things are for sure, according to experts.

"If you try to compete with Amazon on Amazon's terms, you're not going to win."
Keith Anderson, Profitero

First, "if you try to compete with Amazon on Amazon's terms, you're not going to win," Keith Anderson, senior vice president of strategy and insight at Profitero, told Circa.

One thing that has cost rivals in the past was trying to beat Amazon by price matching. "Amazon is not just focused on driving a lot of volume during a short window of time," Anderson explained. "The challenge and the mistake that a lot of competitors have historically fallen into, and I can't say I blame them, but they've basically price-matched Amazon Prime Day or Prime Week promotions, which is a purely defensive play."

Amazon has had low price deals in the works for months, coordinating with vendors and suppliers.

"You want to capture your fair share of those eyeballs."
Keith Anderson, Profitero

That being said, secondly, Anderson says, that shouldn't stop retailers from riding Amazon's Prime Day publicity coattails. "You can be sure an elevated number of households is going to be thinking about buying online right now, so you want to capture your fair share of those eyeballs," he said.

Now in it's third year, it's clear Amazon's end goal with Prime Day is to get more people to sign up for the membership program. "They want people even more deeply entrenched in these unique and exclusive device and content ecosystems," Anderson explained. They've even made signing up for Prime as simple as asking Alexa, Amazon's smart home speaker device, to do so for you.

Once shoppers are hooked on Prime's perks, "then you can upsell them to Prime Fresh or some other thing," Chris Versace, CIO at Tematica Group, told Circa.

A more clever way to compete

For other retailers, experts agree, a smarter way to challenge Amazon during its sales holiday is to make their offerings about loyalty programs, instead of steeper sales.

"Discount those, waive those, incentivize at the transaction level, not at the item level, loyalty program tie-ins, all those kinds of things, in addition to item level savings, are a much more I think strategic approach to competition," Anderson said.

"The last thing [retailers] want to get caught in is a race to the bottom."
Chris Versace, Tematica Group

And Versace echoes that thinking, saying, "The last thing they want to get caught in is a race to the bottom, said a different way, if prices are your only competitive weapon, it's a slippery road to where you're headed."

Minions/Universal Pictures/Giphy

A better plan is to create ways to bulk up your own cult following.

Retailers worth watching

While not all retailers are releasing rival sales, JC Penney, Macy's, Kohl's and Best Buy are all promoting deals. Walmart, one of Amazon's most notable competitors, and Target, are skipping the event. For other retailers to jump on board gives the shopping day significance, analysts have said, and as USA Today puts it, those not participating seem to be "implying that a special event is no longer necessary."

Attendance aside, who's in the best position to compete with Amazon?

For his part, Anderson's money is on Jet.com, which is owned by Walmart. "One could argue that Prime membership comes with a lot of things that are convenient and nice to have, but maybe aren't necessary," he said. Jet's "relentless focus on low prices" is what, he says, makes Jet a strong alternative for shoppers looking for a bargain.

As Amazon continues to plow its way into other sectors, such as wine and apparel, it's focus has also shifted, both he and Versace say. But Versace has his eye on Costco to take on the e-commerce titan, interestingly, for similar reasons to Anderson's bet on Jet.com.

Costco "sells in bulk and they cater to ... the cash-strapped consumer," Versace said. "We're not seeing a lot of wage growth, we see that consumers have a high degree of credit card debt, we see student debts are hitting customers as well, we're also seeing a rise in auto loan defaults ... so the amount of disposable income that any individual is going to have is going to be less."

Income talk aside, on 7/11, both Anderson and Versace will be watching how Prime plays internationally. Especially as Chinese e-commerce giant Alibaba's Singles' Day continues to overshadow major shopping events worldwide, including all of U.S. sales on Black Friday.

For Amazon, looking outside the U.S., Versace said, "that's the avenue for real incremental growth."

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