2023-07-11 20:08:04
Amazon.com hopes to entice US consumers to open their wallets by offering deeper discounts on a wide range of goods and services during “Prime Day”, this year’s 48-hour shopping event, including first-time travel discounts.
A year of inflation has pushed up mortgage rates, rents and food prices for consumers ahead of Prime Day, which this year takes place on July 11-12.
Arun Sundaram, an analyst at CFRA Research, said Amazon’s Prime Day discounts in the US this year are generally bigger than in previous years. The online retailer is offering 60% off Gap apparel, 50% off Sony headphones and 40% off Peloton exercise bikes, according to Bank of America.
Amazon Prime members can also save up to 40% on items such as Sherpani bags and ZOA Energy drinks, by checking out with the “Buy with Prime” option, directly from Amazon’s third-party merchants. Amazon and sellers outside of Amazon.com.
In January, the company said that websites using the “Buy with Prime” feature saw their conversion rate increase by 25%. This feature provides the online retailer with an additional revenue stream during Prime Day, as it collects fulfillment, payment processing and service fees at a time when shoppers are slowing down on discretionary spending.
Last year, online sales in the United States during Amazon’s Prime Day reached nearly $12 billion, up 8.5% from the previous year, as Americans, victims inflation, rushed to buy basic necessities and discount electronics, according to Adobe, which tracks online spending.
Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, said Amazon Prime’s sales growth will be slower this year as many US consumers are still tired of post-pandemic shopping and reluctant to “abuse their wallet”.
They are “looking to spend more on experiences, travel and entertainment,” Schulman added. Running Point Capital Advisors has exposure to Amazon through exchange-traded funds (ETFs), among others.
He predicted that Prime Day 2023 might add between $4 billion and $6 billion in additional revenue for Amazon, up 10-16% from last year, as shoppers also take advantage of product discounts from essentials of everyday life such as pantry items, toiletries and cleaning products.
Brian Gleason, Criteo’s Global Chief Revenue Officer, said these discounts might be more attractive to shoppers in a tougher economy.
Amazon is also offering its first-ever Prime Day travel discounts this year, teaming up with travel booking site Priceline to offer an additional 20% off Priceline’s Hotel Express deals, which offer 60% discounts on hotels.
Prime Day is expected to face stiff competition from other retailers, like Walmart, which has plenty of deals during its “Plus Week.” Aimed at Walmart+ members, this week kicked off on Monday.
Consumer electronics chain Best Buy is also offering new discounts as part of its “Black Friday in July” event, which also kicked off on Monday.
“This week has turned into a major business event, similar to Black Friday and Cyber Monday,” Sundaram said, adding that all retailers are battling to gain market share. Bank of America predicts this year’s Prime Day trade event will generate $12 billion in gross merchandise value (GMV) for Amazon in the United States, up 12% year-over-year.
According to screenshots of its seller notification platform, seen by Archyde.com, Amazon is planning a new Prime Day sales event this year. The company informed sellers in its marketplace that they must submit offers for a “Prime Fall Deal Event” that will begin in the fourth quarter. The exact date was not specified, and Amazon had no comment on the fall event. Last year, the sales took place on October 11 and 12. (Reporting by Granth Vanaik and Ananya Mariam Rajesh in Bengaluru. Additional reporting by Arriana McLymore in New York City; Writing by David Gregorio)
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