Retailers once considered July to be a slow month as regular customers spent their money on travel and other activities rather than shopping at local stores. Then Amazon created Prime Day, a 48-hour sales event that turned the middle of July into a bonanza of consumer cash for the e-commerce giant. This past Prime Day was Amazon’s biggest yet, with the company racking up $14.2 billion in sales over the course of two days last week, an 11 percent increase from last year.
According to the data firm Adobe Analytics, Prime Day has grown every year since the promotion started in 2015. And as inflation starts to ease in some areas of the economy, Amazon was able to earn more as consumer demand rose. “Sometimes [Prime Day] hasn’t grown at the pace we’d like to have it grow, sometimes the growth has been more moderate, especially when we’ve been seeing an inflation crunch,” said analyst Vivek Pandya. “Now, we’ve seen inflation ease quite a bit.” In fact, Adobe found that e-commerce prices are down by 4 percent since 2023 and have steadily declined for most of the last two years.
Even though inflation is starting to cool, consumers are still on the lookout for deals to match their stretched budgets. Rather than “impulse-buying” like in the past, today’s shoppers often wait for promotions like Prime Day or similar July sales events held by Target and Walmart. “People are really focused on their budgets,” said analyst Neil Saunders. “Every retailer has to work that little bit harder to get the consumer to part with the cash. That’s not unique to Amazon, but I feel Amazon has learned the lesson really well.”
Questions:
- Why did Amazon create Prime Day as a sales event in July?
- Why do consumers often wait for sales events like Prime Day to do their shopping?