Amazon Echo Sold Thousands a Minute on Prime Day and Are Still on Sale
Sara Perez and Ingrid Lunden from TechCrunch reported yesterday that Amazon was selling thousands of Echo devices per minute during the Prime Day specials. It’s a great analysis of Prime Day and its impact not only on Echo sales but also touches on retailing in general. This comment is worth noting.
Insiders at the company, according to one source, say that Echo devices are selling at a rate of ‘thousands per minute’ at the moment. Echo Dot appears likely to sell out first, the source added, although there has been unexpectedly high interest in all of the Alexa-powered products.
The article also stated that Amazon has sold twice as many Echo products on this year’s Prime Day compared to 2016 and three times more when you add in international markets. The Echo is only available today in the US, UK and Germany and was not available outside the US at the time of Prime Day 2016. This report was made before Prime Day ended and likely means the final results were higher. Reddit was full of confirmation that an Echo fever had caught on.
Amazon confirmed all of this in a media release today that mentioned Prime Day sales overall were greater than even Black Friday or Cyber Monday. For the Echo in particular, the company had this to say:
Prime members’ most popular purchase was the Echo Dot, which was not only the best-selling Amazon device this Prime Day, but also the best-selling product from any manufacturer in any category across Amazon globally.
Prime Day Discounts Were the Catalyst
What drove all of this buying? Well the event of Prime Day was clearly part of it, but the discounting was the key as per the Reddit comment above. In the US, UK and Germany, Amazon was discounting Echo Dots by about 30% and the original Echo towers by 40-50%.
Did Amazon Sell 2 Million Echo and Dots Yesterday?
The lack of hard numbers from Amazon is par for the course. However, if we believe the statement from the TechCrunch source, then we can do some simple math. Prime Day lasted for 30 hours. That is 1800 minutes. The comment was, “‘thousands per minute.’ at the moment.” So, that doesn’t mean it was thousands at every minute. We would expect the overnight period to be lower than the early hours of the sale on Monday evening and the daytime on Tuesday. If the average was 1,000 per minute then Amazon sold 1.8 million Echo devices during Prime Day.
Consider this other scenario. If Amazon sold 3,000 Echo devices per minute for just three hours, that would be 540,000 alone. That number is higher than Evercore’s estimate of Google Home sales during the 2016 Holiday season. Voicebot analysis suggests that estimate was low, but you quickly get an understanding of the volume that Prime Day may have generated. Did Amazon just sell 2 million Echo devices? It is entirely plausible and you have to assume the figure was over one million.
How Many Echo Devices Are in Circulation?
The TechCrunch article and many others cite CIRP data suggestion 8.2 million households owned an Echo device at the end of 2016. Some households have more than one device so the total Echo sales figures are undoubtably higher. Voicebot analysis suggested that about 16% of Echo owners had multiple devices at the end of 2016. That would put total device sales at about 10 million in circulation at that time.
Edison data from a broad-based consumer survey in early 2017 found that 7% of US households owned a smart speaker. That number translates into 8.3 million households. Very close to the CIRP numbers for households and the overage could account for growth in early January or Google Home devices that were not part of CIRP’s analysis.
Another Edison study about three months later suggested that 42% of smart speaker households then owned multiple devices. Prime Day sales almost certainly added to that count as many Reddit posts confirm. Voicebot analysis estimates that 16.1 million Echo devices were sold as the end of June 2016 and that number is likely close to 18 million today.
The Echo Discounts Continue Beyond Prime Day
It’s not like Amazon to rest on its success. Therefore, it isn’t that surprising that Prime Day 2017 is over but the Echo discounts continue. Just in case people feel like they missed out, they can still feel good about getting a discount today even thought it isn’t quite as good as Prime Day. A quick review of Amazon’s site this morning shows a $20 discount on the purchase of three Echo Dots, and $100 off when you purchase two Echo towers or two Echo Shows. The Echo Dots are showing a ship date of July 17 so you know that Amazon bled through their shelf inventory yesterday and are waiting for new shipments to arrive from manufacturing.
What Have We Learned?
We can conclude two things from the Prime Day news. First, many people are buying multiple devices and Prime Day was a catalyst to add Alexa to more rooms in the home. Second, Amazon is selling a lot of devices and a clever pricing and portfolio strategy is helping them sustain, and maybe extend, market share.
Smart speaker based voice assistants have hit a consumer popularity curve and data from an IFTTT survey in April suggests usage is sticky. Consumer interest is riding high and we expect product pushes by Amazon, Google, Apple and Microsoft during Q4. It is a good bet that Holiday shopping 2017 will dramatically increase the smart speaker install base, and it’s already bigger than most people think.