Prime Day: Don’t get caught by the red numbers!

Launched last July, Amazon’s “Prime Day” was intended to be a celebration of the company’s 20th anniversary, where Prime members were eligible for thousands of deals rivaling (in theory) those of Black Friday. Such was its success that Amazon made it a yearly event, with this year’s touted to be even bigger than the last. With high expectations to fill, I decided to check out what it was all about, analyzing if Prime Day was full of doorbusters or merely a marketing stunt geared towards impulse buyers.

To perform my analysis, I scouted Amazon’s website during different times of the day, picking 14 articles which I could potentially buy. Ranging from TVs to kitchen knives and sunglasses, I varied my picks so as to have a broader spectrum of data points, and once Prime Day was over, I started looking online to find the best prices for each of my items — thus comparing them with Amazon’s deal price. What I found out didn’t particularly surprise me, as Prime deals did indeed offer discounts: 86% of my sample items had some kind of savings. But after a deeper investigation, Amazon’s deals were not all “golden”, and a clever marketing campaign seemed to be behind their yearly success.

When Amazon advertises a deal, they display a savings amount and percentage that is derived from a predetermined list price, a price that is very difficult to find anywhere else. As a result many of the deals have very appealing discounts. Using my items as an example, discounts advertised ranged from 25% to 84%, yet if compared to prices obtained through other non-discounted websites (which list a more accurate market price), Amazon’s advertised savings were inflated by a factor of 5.5!

Even so, these types of marketing schemes aren’t illegal by any means whatsoever, with many companies adopting the same strategies to lure customers into impulse purchases. But as Amazon’s market share increases everyday, their responsibility as a transparent company to its customers becomes greater, and by displaying these types of deals they are risking losing buyers that are each day better equipped to take calculated decisions. With web pages such as camelcamelcamel to help them out, fewer individuals will keep buying things they don’t need just because they think they are getting a better deal than they actually are.

Time to think twice about those “deeply discounted” haribo bears you know you won’t be eating ;)