Is Amazon Prime Day Just For The Big Guys? Many In The Indie Beauty Community Think So
Are you marking your calendars for Prime Day on Monday?
If you lead an emerging beauty brand, you may not be. Forecast by Coresight Research to generate $3.4 billion in sales this year, up from $2.4 billion last year, the 36-hour blitz of deals engineered by Amazon to spark purchases during a slow summer stretch receives a mixed response from indie beauty businesses, many of which are sitting out the day or tepidly participating due to the costs involved, concerns over discounting and a prediction that results will be lackluster for small players, while a fervent few are enthusiastically taking part to maximize exposure and lift revenues.
Expressing the worries indie beauty entrepreneurs often have wading into Amazon waters, Julia Teren, founder of Thesis Beauty, an eco-friendly brand that’s signed on to Prime Day, says, “With Amazon, we are acting a bit more conservatively overall as we don’t want to make it more enticing based on price than our website or our amazing retail partners, who have put in so much effort in bringing us to their shoppers.”
Upstart beauty brands’ Prime Day apprehensions are happening as Amazon courts them as it attempts to heighten its luxury presence, and demonstrate a persistent dissonance between the giant e-tailer’s low-price and ease-of-use features, and prestige aspirations. Last month, Amazon introduced an Indie Beauty Shop dedicated to indie beauty brands and, in the second quarter, sales of luxury beauty at the e-commerce destination soared 57% percent to $250 million, per data market insights specialist One Click Retail provided WWD.
Not every high-end indie brand is lukewarm on Amazon Prime Day. Raw Spirit, a luxury fragrance brand found at Barneys New York, Neiman Marcus and Bloomingdale’s, is on the booster side of the Prime Day divide. “We are participating in Prime Day because we would be crazy not to,” exclaims CEO and co-founder Joyce Lanigan. “Amazon is a very important part of our sales strategy as it is a key sales channel. We find it particularly important for those customers looking to replenish beauty products they are already familiar with who also love the benefits of being an Amazon Prime member.” Raw Spirit is offering $15 off its Citadelle and Bijou Vert fragrances on Prime Day, and $10 off each of the rest of its fragrances, including Mystic Pearl, Desert Blush, Midnight Pearl, Summer Rain, Wild Fire and Winter Oak.
No B.S., the skincare brand owned by Volta Digital, is pouncing on Prime Day, too, by unveiling its product Charcoal Detox Peel-Off Mask exclusively on Amazon timed with the online shopping event and supplying $10 off of the $45, 3-oz. item as well as offering discounts when customers buy it in tandem with other merchandise. Diana Briceno, CEO of Volta Digital, explains that, by introducing the mask for the Amazon Exclusives section, No B.S.’s backing of the product is coupled with a promotional push from Amazon to enhance its reach on the platform.
In general, Briceno, experienced with Prime Day from her stint at Palladio Beauty Group before she joined Volta Digital last year, believes it is a must for a brand. “It’s always a great opportunity to increase visibility for a product,” she says. “Even brands that want to avoid discounts, if you choose to do a discount for one event, it should be Prime Day. People are on a massive shopping spree on Prime Day, and they are more open to trying new brands.”
“It’s always a great opportunity to increase visibility for a product. Even brands that want to avoid discounts, if you choose to do a discount for one event, it should be Prime Day. People are on a massive shopping spree on Prime Day, and they are more open to trying new brands.”
The potential harm of Prime Day price cuts spooks Dan Sudman, CEO and co-founder of Carbon Beauty, a company managing the Amazon enterprises of brands the likes of Moon Juice, The Beauty Chef, Soapwalla and W3ll People. “We haven’t participated largely because our Amazon model is based around preserving MSRP, so we typically don’t offer any sort of promotional discounts. I’m also not all that confident a discount or other type of promo would be all that effective for our partners as Prime Day seems to be centered around the promotion of more mainstream brands.”
Carbon Beauty isn’t alone in staying out of the Prime Day fray. Several brands Beauty Independent contacted for this story, among them Sea Bottle, Phace Bioactive, Aleavia Skin Care, VENeffect and Alaffia, decided to skip it. VENeffect co-founder Cecil Booth says her skincare brand is “available on Amazon Luxury Beauty, but has not yet found a way to effectively activate digital marketing opportunities that are cost-efficient and fitting with the luxury positioning.”
Aleavia Skin Care, a brand that arrived on Amazon a year-and-half ago, is sidestepping Prime Day to manage growth and steer clear of discounting. President Kelly Graham reveals surveys of Aleavia customers show they shop on Amazon because of convenience and the fast, free shipping they receive as Prime members after paying $119 annually, not as a result of discounts, making Prime Day less relevant to the brand than perhaps to competitors. She says, “We may think about participating in Amazon Prime Day in the future, but, for now, it isn’t a necessity as we are a niche clean beauty product that people are longing for, sale or no sale.”
Teren’s view on Prime Day is close to Graham’s, although her brand is partaking in the event in contrast to Aleavia, and somewhere in between Briceno’s and Sudman’s. The brand is offering 5% to 10% discounts for Prime Day, lower than the 15% to $20% discounts it rolled out in earlier Prime Days, but Teren isn’t convinced Prime Day discounting fuels sales. In the past, she says, “There was a bump in revenue, which hardly could be attributed to a discount and most likely [can be attributed] to the huge influx of traffic,” she says, adding, “Overall, it doesn’t seem like Prime Day is a level playing field as it has become primarily driven by expensive paid promotions.”
“We haven’t participated largely because our Amazon model is based around preserving MSRP, so we typically don’t offer any sort of promotional discounts. I’m also not all that confident a discount or other type of promo would be all that effective for our partners as Prime Day seems to be centered around the promotion of more mainstream brands.”
Matthew Beer, CEO of e-commerce strategy and management firm Fortress Brand, doesn’t think brands should pass up Prime Day. “Everything is a learning experience. You should participate no matter what, even if it’s just one SKU to get your feet wet,” he says. “If you do well, great, you’ve learned something. If you flop, great, you’ve learned something. Cyber Monday is just around the corner and participating in Prime Day is the best way to test your Cyber Monday strategy.”
HAN Skin Care Cosmetics is taking the single-SKU approach. The brand’s $16 Rose Berry Cheek & Lip Tint will be 20% off for the deals extravaganza. “This is a pilot for us because it’s our first time. We want to see how it performs on Prime Day,” says HAN founder Susan Wong. “We wanted to limit it to one SKU because we don’t want to potentially hurt our retail partners.”
Despite his recommendation that brands join in, Beer acknowledges Prime Day isn’t as inexpensive as Prime shipping. “The fees have increased substantially. It used to be free for sellers and, then, $500 last year and, now, $750 to enroll a product,” he says. “In my opinion, this high cost was done deliberately to weed out products that won’t sell. I think this will create a much better consumer experience over previous years as there will be higher quality products.”
In addition to the Prime Day enrollment fee, brands frequently augment Amazon ad budgets for Prime Day. Lili Geller, founder of Gemtye, divulges the hair accessories brand is elevating its Amazon spend from $20 daily to $30 daily for Prime Day and the week leading up to it. Gemtye is offering a modest 5% off its products on Prime Day, a suggestion of Quartile, a marketing agency it has hired to amplify Amazon sales.
“I feel like I’m such a small fish compared to the bigger people that are out there. I personally don’t think we are going to see such a big difference. I’m hoping I will be pleasantly surprised.”
Geller doesn’t anticipate Prime Day having an enormous impact on her business. “I feel like I’m such a small fish compared to the bigger people that are out there. I personally don’t think we are going to see such a big difference. I’m hoping I will be pleasantly surprised,” she says. “I’ve never as a consumer participated in Prime Day, but I would think that people go for big-ticket items that they are trying get deals on.”
Beer has seen low-ticket items sell mightily on Prime Day. He says bestselling Prime Day items tend to be priced from $20 to $30 and advises brands to dole out 30% to 40% discounts on products. Purvi Desai, founder and CEO of skin care and bath products line Zaaina, has discovered products with price points cheaper than that are swift sellers. “We have noticed our products between $9.99 and $19.99 are the right range customers feel comfortable spending on,” she says. “Therefore, we send bulk quantities of our products which fall into that range to Amazon Fulfillment Center. We also promote our Amazon listing on all of our social media channels to prepare.”
Brands playing their Prime Day cards right register substantial sales jumps. Beer shares, “We’ve seen anything from a 20% boost from the previous Monday to as much as double.” The good news for brands on the Prime Day outs is that their sales may mount despite their abstention. Beer says, “We see sales bumps across the board, even for people who choose to sit it out. You can get a small sales bump simply from the ‘halo effect’ from all that extra traffic Amazon is getting.”
Prime Day shouldn’t be viewed in isolation, however. Briceno emphasizes Prime Day success can lead to success beyond Prime Day. “It has a long-term impact. If you get momentum on Prime day, you can surf it to help you after Prime Day,” she says. “When I’ve promoted one item and not other items, the items that are promoted on Prime Day get a positive halo effect for two to three months after Prime Day. The ones that you don’t promote go to the bottom of the rankings. If you don’t promote a product, someone else is moving higher than your product in the rankings.”
- Amazon Prime Day, a 36-hour online deals event starting Monday, is expected to generate $3.4 billion in sales this year, up 40% from $2.4 billion last year, according to Coresight Research.
- Many indie beauty brands sold on Amazon, including Sea Bottle, Phace Bioactive, Aleavia Skin Care, VENeffect and Alaffia, are skipping Prime Day. One of the main reasons for their nonparticipation is to stave off any possible damage their brands may suffer from discounting.
- Matthew Beer, CEO of e-commerce strategy and management firm Fortress Brand, advises brands not to sit out Prime Day. He believes even putting a single stockkeeping unit into the Prime Day milieu can be a positive learning experience. In general, Beer finds products priced from $20 to $30 carrying 30% to 40% discounts are strong Prime Day sellers.
- Indie beauty brands largely don’t expect much from Prime Day-spurred sales, but Beer says the results from Prime Day participation can be considerable. He shares Prime Day sales for brands have been 20% to 100% greater than sales the Monday prior to Prime Day.
- Involvement or lack of involvement in Prime Day can have impacts beyond Prime Day. Products that aren’t promoted on Prime Day may suffer from lower rankings after the event relative to promoted competitive products.