Prime Day: Amazon's Ploy To Get More Users To Sign Up For Prime Before The Q4 Shopping Season?

Amazon.com, Inc. AMZN recently announced that to celebrate its 20th anniversary on July 15 it will organize a shopping event 'Prime Day' on its platform exclusively for Amazon Prime customers.

Tom's Guide Editor-in-chief, Mark Spoonauer, was on CNBC Monday to discuss about this event.

Winning New Customers

"I think this can be bigger than Black Friday in terms of the sheer number of deals they are going to be offering that day," Spoonauer said. "And it's designed basically to win over new customers, not just award existing customers. There is an estimated 50 million Amazon prime numbers and you get everything from free 2-day shipping to free movies and apps and games as well as unlimited cloud storage, but they need to grow that pie especially heading into the critical Q4 shopping season. So, this fake holiday is to really get more people signed up for the service."

Can Be As Big As Cyber Monday Or Singles Day Overtime

Spoonauer was asked if Amazon's Prime Day can beat Cyber Monday or Alibaba Group Holding Ltd BABA's Singles Day. He replied, "I think, overtime it has that potential. But the reason why they are doing this is they want more people to be aware of the service and it's really amazing how much people spend who are prime members versus those who are not."

"Based on some estimates it's about $1,600 or about $1,500 a month versus at about $600 for those who are non-members. So, more than double for prime members in terms of the monthly spending. So, the more people they sign-up the more money that they are going to generate not just on this day, but throughout the year," Spoonauer concluded.