Amazon.com Inc.’s two-day Prime Day sale began Tuesday and is expected to give the world’s largest e-commerce company an early advantage over brick-and-mortar competitors who are still grappling with pandemic-haunted consumers before the Fight against black fear Friday crowds.
Since Prime Day was postponed from July of this year to October, Amazon was able to pull forward the crucial Christmas season single-handedly – a long-predicted “Christmas”. More than three in four consumers plan to shop earlier this year than a year ago, with a third citing health and safety concerns, according to a poll published Friday by the International Council of Shopping Centers. Meanwhile, a Harris poll conducted with Bloomberg found that nearly half of consumers plan to do most or all of their shopping online.
It’s a winning combination for Amazon and many of the merchants who have deals on the site. Perch, which sells women’s leggings, virtual reality glasses, and a number of other products in various categories, said some popular items were two to three times as fast as 2019. Perch will make money from the event even after doubling the advertising budget, as Amazon brings so many buyers to the site, said Chris Bell, chief executive officer.
“The only question now is how much of it will cannibalize the traditional Cyber Five bump,” he said, referring to the five-day period that begins with Thanksgiving and marks the peak of vacation spending.
Amazon has been preparing for a record breaking vacation. Earlier this year, more than 175,000 people were hired for its extensive network of fulfillment centers after a surge in online orders briefly overwhelmed the company. Amazon posted record earnings last quarter, and investors have propelled the stock 85% higher this year, giving the company a market value of around $ 1.7 trillion. The stock rose roughly 1% on Tuesday afternoon in New York.
“Vacation spending will continue to shift from brick and mortar to online, and Amazon is very well aligned with these trends,” said Andrew Lipsman, an analyst at eMarketer Inc., who has spent nearly $ 10 billion online over a two-day period US dollar expected period with more than US $ 6 billion spent on Amazon.
The average Prime Day purchase so far is around $ 45, and 40% of household shoppers have already placed two orders, according to Numerator, which tracks online shopping. According to Sprout Social, which monitors consumer sentiment on social media, there were 136,372 tweets on Prime Day as of 1:00 p.m. New York time, with 36% positive, 12% negative and roughly semi-neutral tweets.
Amazon’s delivery machine, designed for convenience, now offers the added benefit of security compared to shopping in-store. That means the company could continue to see double-digit sales growth despite a weak labor market and a standstill in Congress due to other stimulus packages like the $ 600 weekly unemployment benefit that expired this summer.
Prime members who haven’t lost their jobs might actually spend a little more money and feel the urge to indulge themselves, as most households have less travel, dining and other expenses, said Jack Kleinhenz, chief economist at National Retail Federation.
“People may be more confident to buy a little more and think, ‘Oh, I owe it to myself during a difficult time,” he said.
Amazon competitors, who still get the most in-store revenue, need to balance business with protecting public health. Eight out of ten shoppers say they fear packaged stores could spread Covid-19, which means retailers who don’t offer online deals could lose.
The industry has been trying for weeks to persuade consumers to consider earlier issues. American Eagle Outfitters Inc. and Kohl’s Corp. executives expect an earlier demand. Retail veteran Deborah Weinswig got two dozen retailers to start a new 10/10 shopping vacation to resolve capacity issues and encourage customers to buy earlier. Target Corp. and Walmart Inc. also launched their advertising days this week.
The latter launched its own delivery service, Walmart +, last month, and Target ships packages from its stores. However, according to Consumer Intelligence Research Partners, Amazon has 118 million US Prime members. The company holds subscribers to delivery discounts and other perks. Amazon started Prime Day in 2015 as a day of offers to attract new subscribers and retain existing customers. Prime members spend more on the site than non-members.
For years, retailers have been trying to get shoppers to spread their purchases over the vacation by making deals early and often. The phenomenon has been known as “Christmas creep” and never fully occurred as many shoppers hesitate and wait for Black Friday and Thanksgiving deals before seriously buying gifts. The pandemic has finally made “Christmas Creep” a reality, according to analysts, as shoppers worry about running out of items and online orders coming in on time.
“Amazon Prime Day will open the Christmas season and Christmas business for many consumers,” said Chip Bergh, Managing Director of Levi Strauss & Co. “We know the shipping capacity constraints due to the rise in e-commerce, so consumers are encouraged to agree early to buy. “
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