Marketing
Amazon Prime Day: Predictions, projections, expectations
Amazon's biggest annual sale event, Prime Day, is taking place July 11-12. Industry watchers share predictions on what's become an online retail institution.
June 29, 2023 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com
During the first-ever Amazon Prime Day event, launched July 15, 2015, to celebrate the omnichannel retailer's 20th birthday, more than 34.4 million items were ordered, with 398 items ordered per second.
Amazon's short list of highlights for that inaugural event noted Prime members bought more items on Prime Day than on Amazon's Black Friday that year — and that had been Amazon's biggest Black Friday in its history.
Fast forward to Prime Day 2022. Prime members purchased more than 300 million items, with 100,000 items ordered per minute — marking the year as Amazon's biggest Prime Day in its history. Another notable highlight: 2022 was the biggest Prime Day event for Amazon's independent sellers, most of which are small- and medium-sized businesses, and sales growth in Amazon's store outpaced Amazon's retail business.
This year Amazon Prime Day is being held July 11 and 12.
"Prime Day is all about making our Prime members feel like a big deal, with deep savings and access to some of the best offers from brands they love," Jamil Ghani, vice president of Amazon Prime, said in the press release announcing the annual event. "With invite-only deals, we're adding more value to the Prime experience and have made it easier for our Prime members to access exclusive doorbuster deals at incredible prices without waiting in line."
Will 2023 be a record breaker?
This year's event features an all-new "Invite-Only" deals program. Prime members can request an invitation to score the best deals that are expected to sell out, such as a Fire TV, headphones and a facial cleansing brush, according to the release. Chosen members will be notified during the sales day on how to purchase items at the exclusive deal price.
But whether Prime Day will be as successful as last year is a question mark for several reasons. One is inflation and the impact it's having on consumer discretionary spending. Second is the fact that savvy competitors, including Target, also hold special sales and promotions ahead of and during Prime Day.
On the same day Amazon released Prime Day dates, Target announced its Circle Week — the retailer's biggest sale of the season — will happen July 9 through July 15 with exclusive savings for Circle members. Circle is the retailers' free-to-join loyalty program.
A third reason, and the most unknown in terms of impact, is how generational shifts will play into sales.
"This is the first Prime Day where the oldest Gen Z consumers are adults with disposable income for the first time," Spencer Kieboom, CEO and founder of Pollen Returns, stated in an email note regarding Amazon Prime Day. Pollen Returns is an automated returns pickup solution.
Kieboom, and co-founder and Chief Commercial Officer Christian Piller, also noted that Amazon, like several retailers, is now charging for returns. The policy could make a consumer second guess a purchase decision.
Nearly half, 44%, of online sale shoppers plan to return one or more items in 2022, following big sales events including Prime Day, according to a recent InRule survey. The data revealed 43% prefer to ship their returned item back to the retailer as compared to the 27% who prefer to go to a physical store to complete their return.
Another statistic could clearly play into the success of Prime Day — 26% stated that they are deterred from online shopping if they had complications with a previous return process.
"Prime Day will be Amazon's first real test of this policy [return charge]," Piller said in an email note.
One reason Amazon Prime Day has gained popularity, according to Yoni Mazor, co-founder and chief growth officer at Geitda, is due to its timing. Geitda is an Amazon FBA data auditing analytics and reimbursement service.
"The summer season in the retail industry is traditionally slow because consumers are less focused on shopping as the weather improves in many regions — favoring travel, summer camps and outside activities instead," Mazor said in an email interview.
Amazon's Prime Day fills the void and is a "brilliant move," he added.
Lots of inventory may deliver big discounts
Mazor predicts the annual shopping event will be heavy discounts and that the main categories for shoppers will be electronics and apparel.
"It appears that manufacturers and retailers have overstocked in these categories because of macroeconomic reasons as the economy is slowing down, but also because of the outcomes of COVID-19 complications," he said.
The pandemic, which hit in the early spring of 2020, quickly brought manufacturing to a crawl which led to retailers and brands not having enough inventory.
"Once stay-at-home orders relaxed, consumers began to shop and demand surged, while manufacturers and retailers did not have enough inventory to meet the quick surge in demand," said Mazor, adding that this year presents an opportunity for manufacturers and retailers in the fashion and electronics categories to aggressively offload overstocked inventory that they are carrying."
For consumers that means big discounts. But whether big price cuts will push Amazon Prime Day to new record setting marks for items bought is an unknown given the past year of inflation and consumers dealing with higher prices on everything from gas to eggs.
"The current state of the economy can be a hit or miss for Amazon Prime Day 2023.
"The argument in favor of consumers spending on Prime Day is that if the deals provide deep savings for consumers, it will help battle the causes of inflation. Consumers will jump on the opportunity to save big and reduce the impact of inflation," said Mazor.
But on the other end of the consumer behavior spectrum is that an economic slowdown and inflation have taken a "deep toll," he said, and the event "may prove itself to be dry due to the macroeconomic environment."
The e-commerce industry is trailing around 15% to 16% of the total U.S. retail industry, said Mazor, and the number should grow given how young consumers are so digitally native.
"To top off the success and growth of Amazon Prime Day for the past two years will not be a simple feat. One potential reason that Amazon Prime Day 2023 will be more successful than last year would be that manufacturers and brands will offer such great savings that consumers will simply not be able to resist holding back and will aggressively shop the available deals offered this year."
About Judy Mottl
Related Media
Subscribe
Get the latest news and resources from Retail Customer Experience.
