Amazon Offers Prime Day Bargains With Consumers in Control
On Tuesday, Amazon.com Inc. initiated its autumn sale exclusively for Prime members, aiming to gain an advantage in what is predicted to be a lackluster holiday shopping period.
U.S. online sales rose 4.8 percent to $222 billion in November and December, according to Adobe Inc., surpassing last year’s 3.5 percent increase but well below 2019’s pre-pandemic level of 13 percent.
Consumers are persistently struggling with persistent inflation, even as their debt obligations and savings shrink. The continuation of student loan payments suspended during the pandemic is also expected to weigh on expenses.
Penny pinching is a prevailing theme during Amazon’s two-day sale, said Adobe analyst Vivek Pandya. He predicts intense comparison shopping as other retailers, including Walmart Inc., look to ditch the event. Competition and Unsold inventory necessitates heavy discounts, Pandya said.
“With more retailers coming into the market [and] people comparing prices between multiple options, it puts shoppers in the driver’s seat to try to manage costs in this inflationary environment,” he said.
Adobe also predicts that buy-now-pay-later services will hit a record this holiday season as cash-strapped U.S. shoppers struggle with higher prices and rising borrowing costs.
Amazon launched its Prime Day summer sale in 2015 to attract new subscribers who pay $139 a year for shipping discounts, video streaming and other perks. The event helps Amazon lock in shoppers before the holidays and deepen its relationship with existing customers by offering them exclusive deals on Amazon devices and other products.
The Seattle-based company added another event last year, called the Prime Early Access Sale, where shoppers largely avoided high-priced items and loaded up on discounted pantry items instead. This year’s fall sale has been renamed Prime Big Deal Days.
Over the two days, total U.S. online sales will reach $8.1 billion, up 6.1% year-over-year, according to Adobe.
Consumers seem willing to start their holiday spending early as long as they find the discounts attractive enough. About 64% of shoppers said they would start shopping in October this year, compared to 53% a year ago, according to a survey by online shopping watchdog RetailMeNot.
About 58% of those surveyed said they would shop on Amazon’s Big Deal Days and plan to spend $154, about $100 less than those surveyed planned to spend on July’s Prime Day sale.
“People are definitely looking,” RetailMeNot editor Kristin McGrath said. “How well these sales work and how much people actually buy remains to be determined.”
