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Will Amazon’s October Event Boost Sales or Dilute the Brand?
Amazon will host a shopping holiday in October for the second year in a row in a bid to capture additional pre-holiday sales. Prime Big Deal Days will launch during an unspecified period with special deals in 19 countries as Amazon seeks to position its own promotions as the gateway into the holiday season.
The announcement comes off a successful Prime Day, including the single-largest sales day in Amazon’s history on July 11. Amazon doesn’t provide exact sales data, but the company noted that it sold more than 375 million items to Prime members during the two-day event.
The fall version may be more subdued in comparison. Last year’s October shopping holiday, which was dubbed Prime Early Access Sale, failed to reach the heights of the main Prime Day event, according to CNBC. The e-commerce giant drove in $5.7 billion in revenue during the Prime Early Access Sale, compared to $7.5 billion for Prime Day, according to data from Bank of America. However, some analysts noted that Amazon still experienced heightened sales volumes compared to a typical October day.
Where the second Prime Day did succeed was in getting a head start on the holiday season. Almost one-third (31%) of Prime Early Access shoppers made holiday purchases during the sale, up from 11% of Prime Day shoppers, according to data from Numerator. Additionally, 14% of these consumers said they completed all or most of their holiday shopping with their Early Access purchases.
This year, Amazon could be aiming to get an early head start for what some analysts are predicting to be a dreary holiday season after student loan payments suspended during COVID resume, according to data from Earnest. A CNBC survey also noted that two-thirds of retail executives expect shoppers to search for sales. Locking sales in early, with potentially deep discounts, could ensure that Amazon captures a large share of a limited spending pool.
The additional shopping holiday could also provide an opportunity for third-party retailers that sell through the Amazon marketplace. Merchants that use Buy with Prime saw, in total, eight times the daily revenue from those orders during Prime Early Access compared to the month before Amazon announced Prime Day 2022.
The risk that remains is that a second shopping holiday could dilute Prime Day by reducing the urgency of the larger festival. However, this didn’t seem to play out last year, given the success of Prime Day 2023. Another possibility is that Amazon’s October event eats into Cyber Week sales, which could deflate another of the most important periods for e-commerce. However, Adobe Analytics reported a record-setting $11.3 billion in sales during Cyber Monday 2022 — a sign that shoppers will open their wallets for multiple sale events.
Discussion Questions
DISCUSSION QUESTIONS: Is Amazon’s October shopping holiday driving early holiday sales or stealing potential revenue from later in the season? Will turning a second shopping holiday from a one-off promotion into a potentially annual event dilute the power of Prime Day?
Poll
Loading …BrainTrust
Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Melissa Minkow
Director, Retail Strategy, CI&T
As the latest Prime Day numbers showed, there is great consumer appetite for bargains. As such, Prime Big Deals Days in October will likely boost sales for Amazon. However, as happened last year, Amazon’s activity will lead to some holiday and Black Friday shopping being pulled forward – especially as other retailers roll out their own deals early to compete. Amazon will probably take share because it is convenient and has good offers. However, other retailers will spread spend more thinly rather than generating incremental revenue. In terms of the brand, I don’t see Prime Big Deals Days having an adverse impact on Amazon.
Amazon has demonstrated that consumers respond to their promotions, and so they are inclined to continue to test consumers willingness to spend with a new promotion. However, as with most promotions, there’s always a question of whether the promotion drives new, incremental sales or simply pulls demand forward to the detriment of future promotions. I doubt that Amazon cares about the impact, and is far more interested in driving sales now. If and when demand during Prime Day starts to slow, I have no doubt that Amazon will create a new promotion that Prime customers will happily respond to.
Amazon has proven over and over again that it can generate incremental sales by offering consumers “special” shopping days. I do think additional Prime Days will dilute some of the impact of Prime Day as an event. However, I suspect that combined, the extra Prime Day(s) will be worth more to Amazon than the original one day. I also believe that Amazon will continue to innovate and develop its promotional strategy to stay ahead of the competition.
If the October event risked diluting the brand, Amazon wouldn’t repeat it. It was clearly a success in 2022. As Neil points out, it may pull some holiday dollars forward but always at the expense of competitors’ market share.
Great point Dick! If it wasn’t a successful strategy, then they wouldn’t repeat it. Consumers value a great deal and the second Prime event, Prime Early Access Sale, is a great way for Amazon to capture early holiday shopping purchases. Consumers will never get tired of promotions and the more good deals they get from Amazon, the more loyal they become.
In Amazon’s mind and likely in the shoppers’ minds, the two events are unique unto themselves. They carry two differnet strategies. Prime Days are to for sell, sell, sell, and bargain, bargain, bargain. One Day Primes Days will be as over-the-top as Singles Day.
The October Event is all about pre-empting the season. With Amazon’s reach, it is the perfect strategy. Let’s not forget that Amazon is a mall and all the individual retailers will benefit. Bring on the Jingle Bells.
Amazon is now in the position of annualizing major sale events. So it’s not about a big boost, it’s about comping. It’s not a potential annual event, it’ is a now and forever annual event. And of course sales are pulled forward, just like sales are postponed as soon as the event is promoted. But we are comping those dynamics also. None of this dilutes Amazon’s power. If anything, it increases it. Nobody in the market can ignore an Amazon sale svent. But for the moment, Amazon doesn’t necessarily have to follow anyone else’s lead. Amazon acts, the market follows.
This event feels closer to the previous event than the two have felt before. I’m not convinced that numbers will be that strong, but I do believe that those who shop this occasion will be buying for holiday.
Consumers do love a bargain and will be eager to see what Prime Day offers, but the timing for this event effectively pulls December sales into October rather than generate additional revenue for the holiday season.
Amazon’s October sales will pull sales forward…from Walmart and Target.
Will Amazon’s October event boost sales? Are you kidding? We’re not talking about a ONE BIG DAY sale that happens 14 times in one month like the events other retailers run. This is Amazon; sales here are not a weekly occurrence.
The October event will definitely pull sales forward. Gene summed it up perfectly: “Amazon is a mall and all the individual retailers will benefit.” Amazon may be a juggernaut, but a least it shares.
Amazon will drive early holiday sales among shoppers who seek the certainty of availability. Alluring prices will keep us coming back to Amazon throughout Q4.
Prime Day’s power keeps growing. It conditions consumers to expect deals and forces rivals to mobilize for earlier holiday promotions.
Amazon continues to pre-empt its competitors by offerings such as this. This event solidifies Amazon as the leading online retailer & forces other retailers (online & bricks & mortar) to develop defensive strategies & tactics. In addition, this event does not appear to cannibalize sales from Prime Days. As noted last October’s event had no impact on this year’s summer Prime Days.
I think this is a similar situation to the Thanksgiving Day doorbusters. You don’t really change aggregate sales, you just make them less predictable.
it’s not the direction I think we should be headed in, but then, I didn’t think Thanksgiving would ever be a moneymaker and that has proven to be true. I do not lament the passing of that very short lived situation.
I’m pretty sure most retailers have more than one annual sale. Why not for Amazon! (And I think they were pretty happy with last year’s results!
Amazon’s October Prime Day is an indication that holiday shopping will start earlier than usual and retailers will use the longer sales window as a sales tactic as brands compete for market share. Overall, the retail industry can expect to see moderate growth on average. As we’ve seen with past Prime Days, other retailers will likely follow suit in doing their own sales. Additionally, there will probably be more discounts offered compared to prior years, especially in industries like fashion where they have more inventory on hand.
Eventually, October’s “Prime Day” event is a marketing effort to trigger a response from customers and persuade them to turn to Amazon for all of their shopping needs. Customers won’t mind another Prime Day event if they are getting excellent bargains on everything. It would be intriguing to see how Amazon will attract customers on regular days without leveraging any discount bait such as Prime Day.
Ultimately, Amazon is the undisputed leader in online retail, so there’s a certainty that a second Prime Day event must be a well-thought-out plan.