Amazon Takes Heat for ‘Lame’ Deals on Vaunted ‘Prime Day’

(Los Angeles Times/TNS) -

It was billed as Black Friday in July, but some customers are saying the discounts offered for Amazon.com Inc.’s Prime Day are more like yard-sale finds.

Wednesday’s one-day sale, which celebrated Amazon’s 20th anniversary, was called “lame” by customers in numerous tweets, with several saying the only useful thing they bought was Tupperware.

The sale is available only to Prime members, who pay a $99 annual fee for free two-day shipping and access to entertainment.

Discounts for the event started at midnight and rolled out throughout the day. The Seattle-based e-commerce giant said last week that the number of discounts offered will surpass those it issues for Black Friday, the huge shopping day following Thanksgiving.

Not to be outdone, Wal-Mart on Monday announced its own rival one-day sale — also on Wednesday. It included more than 2,000 online-only discounts. For at least 30 days, the retailer said, it also is reducing the minimum order to qualify for free shipping to $35 from $50.

Online shopping is an increasingly critical part of retailers’ business plans. In a report from market-research firm Forrester, online-only retailers like Amazon far outstripped traditional brick-and-mortar rivals in customer experience. And customer experience, according to the report, leads to revenue growth.

From 2010 to 2014, Amazon’s U.S. revenue growth rate of 31 percent was almost 16 times that of Wal-Mart, which was just under 2 percent, according to the report.

Wal-Mart picked up better customer-experience ratings when shoppers used the company’s website. Online shoppers scored the retailer about five points higher than customers who interacted with the company through any other way, according to the report.

And those online shopping experiences are paying off. The Bentonville, Ark.-based company’s global online revenue growth rate from 2010-2014 increased 31.3 percent, while its U.S. same-store brick-and-mortar sales were basically flat.

Analysts said the heavy promotions reflect increasing competition for shoppers who are still reluctant to spend despite an economy on the upswing.

“Both companies are likely to grab share from retailers that don’t participate in heightened promotional activity,” according to a report from Bloomberg Intelligence. “Deals may drive shoppers to buy school and college merchandise early, leaving fewer dollars to spend elsewhere.”

With Prime Day, Amazon is betting heavily that it can recruit new customers to its Prime program, analysts said. The company is pushing a 30-day free trial of the service, which could turn into paying members.

Wal-Mart also is feeling the pressure to win more online shoppers.

The company said in May that it would test a three-day shipping service priced at $50 a year, similar to Prime.