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Does Amazon Have More Riding on Prime Day This Year?
Amazon.com has made it official. Its annual Prime Day sales event will kick off on July 11 and conclude on July 12. The big question facing Amazon and all its rivals likely to run competitive promotions is whether consumers will use this as an excuse to increase their spending or sit it out as they continue to limit purchases due to inflation.
Similar questions were asked last year about Amazon’s Prime Day prospects in the lead-up to the event. Amazon didn’t provide sales details when the dust cleared but called the 2022 promotion its “biggest Prime Day event” ever.
Adobe Analytics estimated that Prime members spent 8.5 percent more during the 2022 event than they did a year earlier.
The retail and technology giant promises plenty of big discounts on name-brand products with its lowest prices of the year on merchandise from companies including Bose, Hey Dude, and Theragun.
Amazon said that new deals will go public every 30 minutes over the two days and that members can get access to some of the best bargains by signing up for its “all-new Invite-only deals program.” Prime members who are selected will receive notifications on purchasing items at exclusive prices.
Subscribers to Amazon’s program can sign up to get deal alerts on items they recently searched or viewed on the platform. Members can sign up by visiting the Prime Day page on Amazon’s app. Push notifications will be sent once the event launches.
In its typical fashion, Amazon is offering pre-Prime Day deals to keep consumers spending ahead of the promotion. Some of Amazon’s best deals are on its own devices.
Amazon is also looking to jumpstart its back-to-school and college sales with shopping guides meant to alleviate some of the work students and their parents must do to prepare for the upcoming academic year.
Prime Day will run into consumer spending headwinds created by inflation. Research from the National Retail Federation (NRF) shows that retail dollar sales, excluding auto dealerships, gas stations and restaurants, were up 4.4 percent year-over-year for the first five months of 2023. Dollar growth has trailed inflation, pointing to lower unit purchases year-over-year.
Discussion Questions
DISCUSSION QUESTIONS: Does Prime Day for Amazon take on added significance this year due to recent consumer spending trends? Do you expect Prime members to spend more or curtail their purchases compared to last year?
Poll
Loading …BrainTrust
Jeff Hall
President, Second To None
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
This Prime Day will be very telling. Consumers are weary from the historic inflation, and nowhere is this more felt than in discretionary spending. While selling hot products at low prices will always be compelling to consumers, I expect this Prime Day to be muted. Given the size of the Prime base, this year’s results will be an important bellwether for the industry and perhaps a sign of what’s to come.
Customers are currently very receptive to deals and bargains. However, they’re also much more careful about what they buy, focusing on things they really want and need rather than making loads of impulse buys. This means Amazon has every chance of success this Prime Day, but getting it right is more of a balancing act. There is no doubt that other retailers will jump on the bandwagon and offer their own deals. The results will provide another insight into the health and mindset of consumers.
Given the general pull-back of consumer discretionary spending across all sectors of retail, the significance to Amazon will be on how well it offers truly compelling price points for items consumers need, vs. want. I would expect Prime members, given the macro environment, to likely spend a bit less than last year – given inflation has dragged on and we’re all a bit weary from it.
With dollar growth trailing inflation, competition for wallet share is intense. Amazon’s immense well of data tells them exactly what buttons to push to generate traffic and sales, so even if this is a robust Prime Day, I would not expect that energy to extend to the rest of the market. Prime Day will have removed a lot of discretionary spending from the market, leaving everybody else scrambling for the remaining tight dollars. And if this Prime Day is not robust, well…buckle in. Student debt repayment starts again. Inflation continues, even if at lower levels. Interest rates could very well go up again. It’s just tough to be cheerful right now.
Prime Day 2023 will test whether Amazon’s pricing and promotions align with increasingly cautious consumption.
Big brand discounts, up-selling apparel and ongoing deal drops could convince Prime members to spend more this year. Savings and personalized marketing will be key.
First, a pragmatic note. Since Amazon doesn’t release actual numbers, they can spin sales any way they want to. As to the question, every Prime Day is – or isn’t – as significant for Amazon as the ones that proceeded it. Amazon keeps changing Prime Day offers slightly from year to year making comparisons difficult if you are an optimist and impossible if you are a cynic. That said, I expect that the reports will be that Prime members spent more this year than in 2022. Whether they actually will have in an “apples to apples” comparison is quite another question.
We are in an economic environment that impacts every area of retail, food, entertainment, hospitality, etc. Prime Day is not just a major sale, it’s an economic indicator.
Amazon is known for competitive, if not the lowest prices. Prime Day puts the spotlight on low prices. The public knows this and will wait for Prime Day and act/spend accordingly.
Prime Day will be a good harbinger of what to expect this holiday season. No doubt consumers are financially challenged at this time, with its impacts across the board. It is most evident in their grocery shopping which highlights inflation’s impact. The decision by the Fed to keep hiking interest rates could change consumer spending from the current yellow flag to a red flag. That being said most consumers like deals. The July challenge for Amazon & its competitors is to present deals which encourage spending.
Amazon has created a new retail holiday in Prime Day, not an easy task. It attracts loyal customers looking for a good deal, plus new shoppers who don’t want to miss out.
Prime Day is beneficial to other retailers as well. My company works with independent retailers who run promotions during Prime Day to great success. Making it an annual event just makes customers look forward to the next one.
Prime Day is the new Black Friday as a barometer of consumer spending. This is going to be an interesting one to watch in terms of how much discounts there are going to be as an indication of retail inventory availability, and how much sales it generates as an indication of consumer confidence
Shoppers will continue to look for deals. The tell is that sale increases year over year are not keeping up with inflation and price hikes. With that in mind, especially with schools opening soon, perhaps there will be more significance that,t in return, will drive more traffic to Amazon compared to other outlets.
I’ll say this: Amazon’s “Prime Day” event this year will be massive. The same question as last year persists: would Prime members spend less on items owing to inflation? Yet, despite all of the “talks,” Amazon recorded their “biggest Prime Day event”. Customers will not turn down a sales event like this as long as there are attractive offers in front of them. Whether driven by habitual mass buying or impulsive decision-making, customers will be drawn to attractive deals presented during the event.