Amazon lures ‘Prime Day’ shoppers with huge discounts

Amazon.com hopes to tempt US shoppers on Tuesday to open inflation-thinned wallets by offering deeper discounts on a wide range of goods and services during this year’s “Prime Day” 48-hour shopping event, including its first travel discounts.

A year of inflation has lifted mortgage rates, rents and food prices for consumers ahead of Prime Day, which falls on July 11-12 this year.

CFRA Research analyst Arun Sundaram said Amazon’s US Prime Day discounts this year are mostly deeper than in previous years. The online retailer is marking 60% off Gap clothing, 50% off on Sony headphones and 40% off Peleton 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 using “Buy with Prime” directly from Amazon’s third-party merchants.

Last year, US online sales during Amazon’s Prime Day shopping event reached nearly $12bn, up 8.5% from the previous year, as inflation-hit Americans pounced on discounted essentials and electronics, according to Adobe, which tracks online spending.

Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, said Amazon Prime sales growth will be slower this year, as many American consumers still have post-pandemic shopping fatigue and are cautious about “abusing their wallets”.

They are looking to spend more on experiences, travel, and entertainment, Schulman said. Running Point Capital Advisors has exposure to Amazon through exchange traded funds (ETFs).

He predicted Prime Day 2023 may add about $4bn to $6bn of incremental revenue for Amazon, up 10% to 16% from last year, as shoppers also take advantage of discounts for everyday staples like pantry items, toiletries and cleaning supplies.

Criteo’s global chief revenue officer Brian Gleason said such discounts may have more appeal to shoppers in a more difficult economy.

Amazon is also offering its first Prime Day travel discounts, partnering with travel booking site Priceline to offer an additional 20% off on Priceline’s Hotel Express deals, which offers 60% off hotels.

Prime Day is expected to encounter stiff competition from other retailers like Walmart which is offering extensive deals during its “Plus Week”. Geared to Walmart+ members, Plus Week began on Monday. Home electronics chain Best Buy is also giving out more discounts through its “Black Friday in July” savings event, which also began on Monday.

“This week is turned into a pretty major shopping event, similar to the likes of Black Friday and Cyber Monday,” Sundaram said, adding that all retailers are fighting over market share. Bank of America projects this year’s Prime Day sales event will generate $12bn in gross merchandise value for Amazon in the US, up 12% on year-on-year basis.

Reuters