Who wins/loses if Amazon pushes Prime Day to September?

Discussion
Source: Amazon
May 22, 2020
George Anderson

A Wall Street Journal report says that Amazon.com is looking to get its once vaunted distribution system back into its pre-pandemic shape and doing so will require pushing its annual Prime Day event from July to September. The e-tailing giant is also no longer limiting shipments of nonessential items to its warehouses.

The first piece of the news, moving Prime Day to the fall, may have significant ramifications for both Amazon and its rivals when the 2020 retail year shakes out.

Amazon has continued to grow Prime Day and has reported record sales each year it has run the event. The e-tailing giant said its 48-hour 2019 Prime Day results topped the combined sales on Black Friday and Cyber Monday 2018. Prime members bought a total of over 175 million items from Amazon directly as well as from its third-party marketplace sellers. Consumers went to the site to begin buying what they would need for back-to-school and even Christmas, in some instances.

Competitors running their own events in parallel with Amazon also benefited. Those seeing year-over-year online gains during the 2019 Prime Day period were Best Buy (60.7 percent), Costco (35.3 percent), Etsy (21.5 percent), Gap (100.4 percent), Home Depot (13.1 percent), IKEA (3.7 percent), Kohl’s (42.8 percent), Nike (153.2 percent), Sam’s Club (48.2 percent), Target (18.2 percent), Walmart (42.6 percent) and Wayfair (8.7 percent).

While marketplace sellers that have seen their own business operations set back by the novel coronavirus outbreak may welcome the news of having a couple more months to get ready for Prime Day, others looking to push out excess inventory may see it differently.

How will retail rivals respond? Will those that have had fewer issues keeping up with the demand for products during the outbreak, such as Walmart and Target, fill the promotional void left by Amazon with even bigger sales events of their own in July?

Walmart posted a 10 percent gain in same-store sales in the first quarter and the retailer’s online business jumped 74 percent on the strength of its grocery pickup and delivery services.

Target also reported big sales gains during the first quarter with same-store sales up 10.8 percent. The chain’s digital business, including target.com, Shipt same-day delivery and its store and parking lot pickup options, achieved a 141 percent year-over-year increase.

DISCUSSION QUESTIONS: Will Amazon’s 2020 results be helped or hurt if it moves Prime Day from July to September, and will the decision affect its results beyond this year? What do you expect Amazon’s wide range of retailing rivals to do in July?

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"The pandemic and economic downturn will impact Amazon’s 2020 results regardless of whether Prime Day is in July or September."

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25 Comments on "Who wins/loses if Amazon pushes Prime Day to September?"


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Ben Ball
BrainTrust

Moving Prime Day to September won’t push the needle much either way for the year. Even if competitors still offer big online events in July, the idea that consumers will fill their needs and ignore Prime Day in September is theoretical at best. I wouldn’t expect it to hold up in practice. If anything it might give Amazon a slight advantage as Prime Day will fall squarely in line with back-to-school timing. So shoppers may be even more motivated to take advantage of bargains at that time.

Richard Hernandez
BrainTrust

People don’t have the disposable income to buy as they would normally if the event were held this July. The question is – will they have disposable income in September? I don’t think that will be the case, even if Amazon heats up their pricing as most non-food businesses are doing presently.

Suresh Chaganti
BrainTrust

I believe the rest of the competition follows Amazon to align their promotional events around new dates. For one, there is little appetite or mindshare to focus on new non-essential stuff. There is still a lot of inventory to flush through the system. Marketplace sellers supply to many retailers, so their readiness is in question for July.

In situations like these, it’s somewhat like a sports league. Even if one team is more ready than others, it doesn’t matter. I don’t think other retailers will take chances to stick to their regular calendar.

Art Suriano
Guest
This year is challenging with many unknown factors and decisions taking place every day that are affecting business as we knew it. I think Amazon would be wise to push Prime Day to the fall. I’m sure if they had Prime Day now, it would be a huge success, especially because so many consumers are shopping online and at Amazon. The question is, does Amazon need to have it? Their sales have been extraordinary, so what is Prime Day going to do for Amazon that they aren’t already achieving? From a consumer’s point of view Prime Day is excellent, but they’ll shop at Amazon without it. I assume if things are somewhat back to normal by September, Amazon may have more success. It’s a win for Amazon no matter when they offer Prime Day, but it makes sense to run it when the company will get the most bang for their buck. Other retailers may see that as an advantage and offer a counter promotion early, but they’re still not going to succeed in taking… Read more »
David Naumann
BrainTrust

Given the current reduced spending climate caused by high unemployment and Amazon’s strained supply chain, the move of Prime Day to September will make it more successful than keeping it in July. Consumers have become more conservative in their spending due to the uncertainty of the coronavirus and the economy and Amazon hopes that the economy will be stronger by September. Amazon’s rivals that have shuttered most of their physical stores for a couple months are in desperate need of a sales lift and will likely be running a lot of promotions to drive sales. Retailers probably won’t focus on a specific day for a huge promotion like a Prime Day – instead, they will focus on a variety of many creative promotions to stimulate increased customer spending.

Ken Morris
BrainTrust

I think Amazon will tap into the holiday season bonanza by moving Prime Day. The move allows them to capture both pre-holiday and holiday sales without too much cannibalization. The move also gives their rivals an opportunity to fill the void in July and offer their own version of Prime Day, let’s hope it won’t be sub-prime day.

Jeff Sward
BrainTrust

July was already going to be a tough month to comp. Now July will probably tank for those retailers that had a great July last year. At least that’s a known at this point and can be planned for — sort of. But given the nature of the business, retailers will still make some kind of effort to annualize July. But without Amazons coattails, it’s going to be a tough month. The move into September puts Prime Day into much closer proximity to Alibaba’s 11/11 Singles Day event. (I would argue that 11/11 is already the new Black Friday kicking off the holiday shopping season.) Amazon’s move is completely understandable given the circumstances, but I’ll also bet that 2021 sees the event move back to July.

George Anderson
Staff

It would be interesting to see if Alibaba sought to take advantage and promote Singles Day more aggressively in the U.S. this year than it has in the past. The question is, how likely is it to do that?

Jeff Sward
BrainTrust

I think Alibaba is following a natural progression of competitive behavior. I wasn’t viewing it as exploitative or taking advantage. I was a little surprised at their level of promotion in this market last year, but then again, I was looking for it as part of the ever creeping forward of the holiday dynamic. So I think it’s highly likely they will ramp up this year. Just how much remains to be seen given all the market dynamics both here and in China.

Meaghan Brophy
BrainTrust

The pandemic and economic downturn will impact Amazon’s 2020 results regardless of whether Prime Day is in July or September. In normal years. Prime Day was so successful because it created a brand new shopping holiday without significantly impacting Back to School and Back to College sales numbers. This year, neither Amazon’s operations nor consumers’ pockets are ready for a blow-out shopping event, as people are still focused on stocking up on essentials. Pushing the sale to September is a smart move. However, I predict department stores will try to take advantage by having sales of their own in July. But as many department and apparel retailers have been advertising deep discounts online for a while now, I’m not sure how many consumers will bite.

Ricardo Belmar
BrainTrust
No one can predict right now what consumer appetites will be later this year for non-essential purchases. There is likely to be some pent up demand but this will largely depend on how much income consumers are willing to part with and how secure they feel about the economy and their jobs. Prime Day is likely to do well no matter what time of year Amazon holds it as long as they deliver the same level of discounting they have in the past. Perhaps this year it will require even more discounting to deliver sales at the same level as past years or even higher. Other retailers are likely to follow Amazon’s lead here and establish their own Prime Day competitive sales just as in past years. A September date is just past Back to School but also close enough to the holiday shopping season to cause consumers to alter their buying habits for the second half of the year. It’s entirely possible this could steal away sales from Black Friday shopping as many people… Read more »
Gene Detroyer
BrainTrust

Amazon is rolling the dice here. The questions in July is will people have the money to participate? On the other hand, will there be so much desire to buy that they will go overboard? The questions for September are exactly the same. I can’t predict which will hold sway. But I am betting on one issue being most important: there are 36 million Americans out of work now. We don’t know if that will be different in September, but can it get worse?

Lisa Goller
BrainTrust

Amazon wins big in 2020 and even bigger in the future. They’re spending this summer preparing for flu season so their e-commerce processes will be bulletproof in time for September and the holiday season. If we’re in lockdown again this fall, every day will be Prime Day for Amazon.

In the meantime, Walmart needs to make a last-mile acquisition, such as a food delivery tech brand, to arrive at more homes and complement its grocery leadership.

Georganne Bender
BrainTrust

The real question is will consumers be ready for a big spend in July? Probably not. Some states may not be fully open and federal pandemic unemployment assistance (PUA) runs out on July 25. Will we be back to work? The near future is uncertain; we will still be cautious about what’s next.

Amazon Prime Day in September won’t have a big effect on Back to School if school’s aren’t open. But Amazon Prime Day in September, coupled with all the other retailer promotions that will coincide with it, is close to Black Friday and the holiday selling season. All that “Buy now!” shopping when consumers have been conserving cash could be overwhelming.

George Anderson
Staff

You’re spot on. Retailers are already reporting that they don’t expect the sales bump they saw in April, which coincided with stimulus checks reaching millions of Americans, is likely to last. With unemployment numbers astronomically high and still climbing and millions likely to see pay cuts or worse unless the government further backs employers on meeting payrolls, the situation may not be substantially better in July or September. Merchants are adapting and innovating as quickly as they can, but it’s difficult to see how the “now normal” (that one’s for you George) going back to anything close to the previous normal short of proven treatments and/or vaccine for COVID-19.

Georganne Bender
BrainTrust

Thanks, George! We are all certainly learning how to pivot.

Neil Saunders
BrainTrust

From an economic or logistical perspective, Prime Day in July would not have worked. As such, moving it to September is sensible. Will the current crisis have abated by then? I doubt it, but things will have normalized somewhat and Amazon will have more flexibility to service its “big event.” As for rivals, they will latch on to Prime Day – whenever it is – and will try and run their own promotions and deals to attract trade.

Rich Kizer
BrainTrust

I expect Amazon’s competitors will do what aggressive retailers anywhere would do: run after first dollar capture. The best retailers watch each other, and consistently try to out-position and out-perform the competition. We will see the competitive cannons start firing as we see earlier battles for consumers’ minds. It will turn into a “positioning” battle. Amazon wins.

Paula Rosenblum
BrainTrust

Well, moving Prime Day to September will make it even more an early holiday shopping buy event. Bargain hunting consumers will go looking for something cheap.

What do I expect Amazon’s rivals to do in July? What retailers always did in July to bring customers off the beach. Run promotions on excess stock (there’s gotta be a lot of it) to drive traffic, or just take it easy (my father literally used to close for the month). Because it’s not even clear if colleges will be on premise or telesessions, I’m not even clear that dorm room supplies and technology will sell.

September will show a lot more action, especially in apparel.

Liz Adamson
BrainTrust

Nothing has gone according to plan this year. For some, the supply chain was interrupted due overwhelmed or closed factories, for others demand has dropped for their particular product line, for those in essential goods they can’t keep up with the skyrocketing demand. Historically Prime Day has boosted sales during the normally slow summer e-commerce season. Having it in September will definitely be different, especially so close to Q4. Prime Day will still give the Q3 sales boost Amazon has seen in the past, but we will likely see a very different mix of products than we have in past years.

Peter Charness
BrainTrust

Amazon’s ability to deliver to its usual standard of service is very, very challenged right now. Another peak of “non-essential” product – which would be somewhat of impulse buys anyways with one-week or longer delivery cycles – is what they would face in July. I wonder if the decision to move Prime Day out is to clear the current spending on non-essential malaise a bit (and hope it’s better in September), but to also shore up their capacity.

Andy Taylor
Guest

The two-day Prime Day event in 2019 was bigger than Black Friday and Cyber Monday combined for many Amazon sellers and vendors, and while the wider economic and health situations will likely play into how successful the event is this year, it’s clear Amazon has conditioned consumers to view it as a time to make purchases. This year’s event definitely has the potential to pull holiday sales forward given its proximity to Q4, and other retailers would be wise to continue the trend of piggybacking on Prime Day to ensure they’re in consumers’ consideration sets during the event this year.

I expect Amazon to break its own records for the event once again, while vendors and sellers on the platform will need to start mapping out strategy now to ensure inventory, fulfillment and ad campaign preparedness for both Prime Day and the Q4 holiday shopping season.

SanjeevSularia
Guest

Amazon Prime Day 2019 lasted 48 hours. The 2020 event will have to be longer than that to fuel consumer spending. Pushing back Prime Day to September will work better for Amazon with some consumption appetite restored by then, as long as there is either no second wave of the pandemic or a much milder second wave.

The September Prime Day could easily turn into a prime quarter, extending into the holiday season with competitive pricing increasing pressure on all retailers to offer more and more deals. The aggressive promotional strategy will be the key to attract the newfound customer behavior, where a lot of American consumers have learned how to shop online for the first time and have gotten more comfortable with it.

In the race to acquire this new digital savvy customer segment and to reward the more evolved comparative shoppers, offering competitive and compelling deals for an extended period will become an essential part of every retailer.

Richard J. George, Ph.D.
BrainTrust

I see little real negative impact. This will give customers more time to replenish their bank accounts and more time for Amazon to take a breath and prepare for their 2020 version of Prime Day. However, if I were a competitor, I would fill the July void and develop a fall option as well. For these competitors, I would remind them of the advice of Frederick the Great, “Do not attack the enemy when he adheres to the rules, but profit from his slightest mistakes without delay.”

Kathy Kimple
BrainTrust

Regardless of when it occurs, Amazon might find Prime Day is less of an “event” this year, unless the discounts go really deep. Have a look at the emails you have been receiving from the retailers and brands you follow: since mid-March, most have been regularly running the kinds of offers you typically see on Prime Day or Cyber Monday.

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