Amazon’s Prime Day kicks off in Australia for the first time today. It’s the latest in a series of global shopping events to infiltrate the local market, boosting traffic and online sales as well as adding new pricing pressures to local retailers.

Starting in 2015, Amazon’s artificial holiday began with the Seattle-based retailer offering deep discounts as an incentive to join its Prime membership program. The company now has 100 million paying Prime members around the world and analysts expect Prime Day to generate $3.4 billion in sales worldwide. But the holiday isn’t just about Amazon anymore. According to data from Adobe, there was nearly ten per cent growth across the entire ecommerce market on Prime Day 2017.

Locally, events like Click Frenzy, Afterpay Day, Black Friday and Cyber Monday are making their mark on the retail calendar. According to figures from Australia Post, for instance, Click Frenzy sales were up 14 per cent year-on-year and Black Friday and Cyber Monday grew by 27 per cent in 2017.

November overtook December as the biggest month of the year for fashion purchases in 2017 thanks to the combination of flash sales, and this despite Boxing Day online sales also growing by 35 per cent last year. Black Friday, Cyber Monday, Click Frenzy and Singles’ Day helped lift online fashions purchases 30.2 per cent year-on-year in November 2017.

“More and more retailers are opting into online shopping festivals, using the sales frenzy to kick start their Christmas campaign. We expect this trend to continue this year, as online spend grows in Australia, up 18 per cent year on year, accounting for $21.3 billion on goods online,” a spokesperson for Australia Post said.

Despite the robust sales growth, retailers and experts are wary that the consumer perception that retailers are on sale all the time — or they will be soon — will create new challenges for the industry.

A recent report from Australia Post sums up the predicament: “The growth of online sales events, such as Black Friday and Click Frenzy, is also changing consumer buying behaviour. More shoppers are holding off on purchases until these events, to potentially ‘grab a bargain’, meaning retailers have to manage fluctuating inventory levels and fulfilment challenges.”

Prices and Margins

Another concern around the rise of online sales event is the focus on discounts and the impact on margins.

While promotional activity has always been a core part of retail, according to a spokesperson for the National Online Retailers Association (NORA), much of the discount-based sales have moved online while physical retailers have adopted other drawcards to bring shoppers in store.

Take the example of the sneakerheads lining up from a limited edition shoe or a new store opening.

“In the offline world customers are celebrating new, new, fresh, fresh, as opposed to the hardcore old days of discounting — I think that has moved online,” the NORA spokesperson said.

“Shoppers need a reason to shop. Promotional activity has normally answered that. The only concern in the ecommerce industry is that the broad thematic is around discounting,” the spokesperson said. “How many of these can we do a year? If we do one every day, or every month or every two weeks? If so, what’s the net effect? Certainly, sales would go up but what about margins and sustainable, profitable model for retailers?”

Anna Lee, Chief Operating Officer at The Iconic, told Which-50 she isn’t concerned that consumer behaviour may shift to only shopping on sale days.


“No not at all,” Lee said. “Sale days are a normal and expected part of the retail trade calendar, so not taking part in sale days could, in fact, change our customers’ behaviour and affect their loyalty — customers could shop with another retailer taking part in a sale day and therefore become its loyal customer as opposed to ours.

“Our customers are at the heart of everything we do, so we participate in sale days — both local and international — that we know our customers love and expect us to be a part of,” Lee told Which-50.

The biggest challenge of sales days is maintaining a high level of service across a high volume of orders, Lee said.

“With major sale events comes high volumes of orders. Customer experience is our number one priority at The Iconic, so we need to make sure we live up to our promise of delivering a seamless shopping experience and maintain the high standards our customers have when purchasing from us.”


Julie Mathers, founder and CEO of online retailer Flora & Fauna, told Which-50 she is selective about which sales to participate in.

“It’s easy to get swept into someone else’s marketing plan, but is that right for what’s happening in your business?”

“We actually pick and choose. What’s really important is that you focus on your business first, your promotional plan and your customers and their needs. We do participate in them but we really review what else is going on in the business to decide which ones we do,” Mathers said.

Julie Mathers, CEO and founder, Flora & Fauna

Mathers is cautious that participating in sales too often could mean customers simply wait for discounts, putting additional pressure on already tight margins.

“As a brand we focus on ethical retailing and exceptional customer experience. That’s what we are known for, not discounting, and we are still growing 400 per cent year-on-year. If you discount too much your brand changes. The huge sales peak is great but it can’t be at the expense of ongoing margin or regular sales.”

When it does participate in the sales, the site enjoys an increase in traffic, Mathers said, meaning new people are discovering and experiencing the brand.

“First-time buyers discover you through a discount mechanism and if that isn’t where your brand plays, which it isn’t for us, those customers aren’t always sticky.”

Even when Flora & Fauna hasn’t explicitly participated in sales the site has benefited from an increase in visitors.

“In many where we haven’t participated we’ve noticed an increase in traffic anyway so just make sure you have some great offers on the web site at that time to capture those visitors,” Mathers said.


Outside of its regular seasonal sales and clearance sales, womenswear retailer Birdsnest participates in Click Frenzy in May and November, Boxing Day, and has been involved in Vogue shopping night and Afterpay Day.

Last year the Cooma-based retailer participated in Black Friday and Cyber Monday for the first time.

“Since they are American Thanksgiving sales, we weren’t early adopters of those sales, but they seem to have picked up a lot of momentum globally and in Australia,” Pen Carroll, Birdsnest Marketing Manager, told Which-50.

Carroll said the retailer participates in the sales primarily to move excess stock and secondly to acquire new customers. She noted it is important to find the balance between attracting sale shoppers with customers who are motivated by service, exclusivity or quality.

Pen Carroll, Marketing Manager,

“Having the sale shopper is important, but having all sale shoppers can make it pretty challenging to move full-price stock. We want to be able to grow the customer base whose key drivers are around service, curation of stock, quality of stock, exclusive labels and styling advice,” Carroll said.

Carroll noted there is a concern in the industry around the danger of “turning more people into sales shoppers through the flood of discounts and sales that are out there in the marketplace.”

She noted Birdsnest, which grew revenue at 12 per cent last year to reach $30 million, doesn’t want to play in the discount space. “Sales aren’t our driving marketing initiative,” Carroll said.

Instead the retailer aims to differentiate itself on service, advice and product to grow its customer base.

More recently, sales have moved away from pre-existing holidays to events manufactured around a platform or marketplace. Take Alibaba’s Singles Day event as an example. The event was created a decade ago to encourage Chinese shoppers to buy goods online, and it’s now the biggest sale in the world. Last year it processed $US25.3 billion ($A33 billion).

August and Afterpay

Closer to home and retailers offering the buy now, pay later option product Afterpay have taken to a new sales day — Afterpay Day. The sale, which was first held in 2017, made August one of the biggest months outside of the Christmas period, according to Australia Post.

The first online-only Afterpay Day in August 2017 generated $15 million with more than 70,000 orders. A second event was held on Valentine’s day in 2018 and expanded into online and in-store discounts. A third sale is scheduled for August.

Afterpay CMO Vicki Aristidopoulos told Which-50 the event generally delivers retailers more than a 50 per cent uplift in store and online sales over the 24-hour period.

Vicki Aristidopoulos, Chief Marketing Officer at Afterpay

“The event harnesses Afterpay’s engaged community and connect retailers to our customers and our customers to our retailers. During the event many retailers also support the event through their own marketing channels,” Aristidopoulos said.

“We run Afterpay Day one to two times a year. Outside of these events, Afterpay remains a popular choice for customers and retailers because it enables customers to plan and budget throughout the year on full-priced items. Eighty per cent of our customers tell us they use Afterpay as a budgeting tool, so that helps both customers and retailers by allowing them to spread the costs on purchases over four instalments.”

Too big to ignore

Even with the concerns around frequent discounting, the events are too big for retailers to ignore.

According to a spokesperson for Adobe, the big discount sales days are only going to continue to grow.

“Savvy, experience-minded retailers recognise that while digital disruption and soaring customer expectations can present logistical and operational challenges to implement, they ultimately improve consumer satisfaction and are critical to overall business success,” a spokesperson said.

“As consumers become more and more conditioned to wait for big discount sales rather than pay a premium, retailers must adapt, innovate and keep pace with the changing environment around them.”

In order to survive in an increasingly competitive environment, the advice from Adobe is for retailers to focus on providing a seamless, personalised customer journey across all devices and channels.

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