October 12, 2020 | technology | No Comments
Online retailer Amazon’s annual Prime Day shopping extravaganza starts at midnight U.S. Eastern Oct. 13 and sales are expected to exceed those of last year’s Black Friday and Cyber Monday combined.
The Seattle tech provider and online retailer’s event, which runs two full days, could net $9.9 billion in total sales, eMarketer estimates.
That figure is more than 38% above last year’s Prime Day. Amazon doesn’t release sales figures for the event, but researchers pegged last year’s sales at roughly $7.16 billion.
J.P. Morgan analyst Doug Anmuth more conservatively estimates Amazon will take in $7.5 billion of revenue from the event this year, up 42% from an estimated $5.3 billion in 2019.
“The biggest difference this year is that Prime Day is running three months later than its typical mid-July timing. [And] as such Amazon is promoting the event as an early start to holiday shopping vs. Prime Day’s typical focus on summer and back-to-school shopping,” he wrote in a recent research note.
Prime Day has been delayed by the coronavirus pandemic.
According to Fareeha Ali, research and editorial director at Digital Commerce 360, this Prime Day also stands out because the retail landscape has shifted online with many new Prime members expected to join.
“Retail has been flipped on its head this year because of the coronavirus pandemic,” she told TheStreet by email.
“With store closures, e-commerce growth exploded much more than expected. And Amazon, as the No. 1 retailer in North America, benefited from more consumers shopping online. ‘
“It’s likely that Amazon gained many new customers this year — particularly Prime members — who will be eligible to shop Prime Day deals,” she said.
Prime members pay $119 a year, or $13 a month, for their subscriptions. For that cost, they get free and fast shipping, free streaming access to movies, video and music, free online storage for photos, discounts at the company’s Whole Foods chain and more.
Amazon’s shares are up 8% over the past five days and 81% for the year.
Ali also pointed out that since Prime Day is so close to the major Black Friday/Cyber Monday holidays (as opposed to the usual mid-summer event) this year, it’ll likely skew consumer behavior.
“In particular, it could shift what consumers buy, including buying more holiday gifts rather than buying for themselves,” she added.
Amazon said it would spend an additional $100 million on promotions to help hard-hit small businesses reach more consumers.
Small businesses generally have been hammered during the pandemic as shoppers were forced to stay home.
Last month the tech giant also offered Prime members a $10 credit to use on Prime Day when they spend $10 on items sold by select small businesses in Amazon’s site.
“It’s likely, as in past years, that Amazon will heavily promote its own products, especially its Alexa-enabled devices. Those products typically have the biggest discounts, are promoted on the home page throughout Prime Day and will top Amazon’s best-sellers list post-Prime Day,” Ali said.
This week rivals Target (TGT) – Get Report and Walmart (WMT) – Get Report are both hosting similar sales against Prime Day.
Target’s Deals Day runs at the same time as Prime Day, Oct. 13 through 15. Walmart’s Big Sale started on Oct. 11 and run through Oct. 15.
The timing “could have a slight impact,” Ali said. “This isn’t the first year Walmart and other large retailers have promotions on the same days as Prime Day.
“However, at the peak of the pandemic when Amazon had low stock and long delivery times, consumers turned to other retailers online like Walmart and Target.
“It’s possible that now more shoppers are more familiar with other retailers’ websites and might comparison shop more on Prime Day.”