Prime Day Spawns Copycat Sales as Retailers Look to Shed Inventory
Gearing up for Prime Day July 12-13, Amazon touted its operations network Tuesday, blogging it spent two decades building and investing in a network that’s “nimble and prepared for shopping events like Prime Day and the holiday rush.” This year, it's “as prepared as ever,” Amazon said, after two years of retail impact from COVID-19-based disruption.
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Amazon is offering same-day delivery in 17 countries, including 140 metro areas in the U.S. and Europe, with some products available for delivery “within hours of purchase,” it said. The company said it's working to ensure “we have a wide selection in stock for customers.”
Amazon said it ordered items in advance to ensure products are “closer to customers,” and it cited new technology in fulfillment centers to help meet customer demand, improve efficiency and “advance the safety and experience of employees around the world.” That includes robotics and artificial intelligence for moving and storing packages, computer vision systems to help in sorting and labelling, and machine learning to move “millions of packages” daily.
Amazon’s fulfillment machine has over 110 aircraft, 50,000 trailers, 400 fulfillment centers, 150 sort centers and 1,000 delivery stations worldwide. The company invested over $1 billion in safety technology in delivery vans, driver training programs and other improvements so drivers “deliver safely and seamlessly,” it said. In-vehicle safety technology reduced accidents by nearly a half since 2021, the company said.
Deals will go live throughout the 48-hour Prime Day event with Amazon’s largest-ever product selection, which Prime members can get with fast and free shipping, it said. The company promoted “easy” returns via Whole Foods, Kohl’s and UPS, where customers can return just the item without a box or label required, plus a QR code.
Commenting on a Wall Street Journal article saying Prime Day sales growth has slowed, eMarketer Intelligent Insider analyst Blake Droesch said on a Friday podcast, “It’s not all about generating the same sales revenue as you can in a two-day period.” Instead, the sales event is about enlarging the “Amazon flywheel,” he said, highlighting advertising, which is becoming a larger piece of the company’s revenue.
“Having a day like Prime Day, getting advertisers on board into the Amazon e-commerce platform and having that advertising filter out into its larger media properties is a focus” for the company going forward, Droesch said. “It’s also about selling Amazon Fire TVs," he said.
Insider Intelligence’s Senior Director-Briefings Stephanie Taglianetti noted Amazon-branded CE products are expected to “grab the spotlight” next week. Sales are important this year at a time when consumers are cutting back on spending, she said, citing slowing revenue growth at Amazon and its first quarterly loss since Q1 2015 (see 2204290045). “Amazon confirmed it’s having an extra Prime Day in the fall this year as it’s dealing with some extra stock,” Taglianetti added.
That’s a retail-wide trend, Taglianetti noted, saying retailers are relying on tentpole sale events to push consumers to spend. She noted Walmart is having a concurrent sales event while Prime Days is on, “so it seems like retailers are relying more heavily on these events to encourage people to spend and to drive loyalty.” Target, too, is having a sales event next week (see 2206170032).
Average Prime Day orders were $54 last year, down $5 from 2020, said podcast host Marcus Johnson, citing Numerator figures; a RetailMeNot survey showed the average Prime Day shopper plans to spend just under $400 next week, down from the $600 they planned to spend last year, Johnson said. Those were budgets for the July retail sales event across retailers, with 60% allotted to Amazon, she said.
Insider Intelligence analyst Paul Verna posited that the only metric that’s important to Amazon during Prime Day is “the incremental spend compared to if they didn’t do Prime Day.” That the e-tailer is expanding the event to a second fall time slot “means they’re trying to approach it differently,” he said. “There’s a lot of competition now” Verna said. Prime Day is largely about “driving traffic into the ecosystem and especially around Amazon goods.”