Amazon dangles deeper 'Prime Day' discounts for stressed US shoppers

Criteo SA (Pre-Reincorporation)

11/07/2023 06:00

By Granth Vanaik and Ananya Mariam Rajesh
       July 11 (Reuters) - Amazon.com  AMZN.O  hopes to tempt
U.S. 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-ever 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 U.S. Prime
Day discounts this year are mostly deeper than in previous
years. The online retailer is marking 60% off Gap  GPS.N 
clothing, 50% off on Sony headphones and 40% off Peleton
 PTON.O  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, U.S. online sales during Amazon's Prime Day
shopping event reached nearly $12 billion, 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 added. Running Point Capital Advisors
has exposure to Amazon through Exchange Traded Funds (ETFs),
among others. 
        He predicted Prime Day 2023 may add about $4 billion to
$6 billion 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  CRTO.O  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-ever Prime Day travel
discounts this year, 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  WMT.N  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 $12 billion in gross merchandise value (GMV) for
Amazon in the United States, up 12% on year-over-year basis.
    Amazon plans yet another Prime sales event this year,
according to screenshots of its seller notification platform
seen by Reuters. The company has notified its marketplace
vendors to submit deals for a "Prime Fall Deal Event" that will
begin in the fourth quarter. The exact date was unclear, and
Amazon had no comment on the fall event. Last year's sale was
Oct. 11 and 12. 

 (Reporting by Granth Vanaik and Ananya Mariam Rajesh in
Bengaluru. Additional reporting by Arriana McLymore in New York
City; Editing by David Gregorio)
 ((Granth.Vanaik@thomsonreuters.com; Twitter: https://twitter.com/Vanaik_Granth;))