Prime Day may be primed to fizzle.
Nearly a quarter of 1,115 consumers surveyed by Adobe say they’ll skip Amazon’s two-day discount blitz, which starts officially on Tuesday. The reason: Inflation, which in May ran at a 41-year high of 8.6%, has eaten up their discretionary spending budgets.
More than a fifth of respondents said they would refrain from Amazon’s shopping holiday because they’re concerned about the economy and their finances, while another fifth said they’re prioritizing necessities.
Prime Day’s collision with raging inflation comes as Amazon and other online retailers face a host of challenges caused by slowing growth in online shopping. Supercharged by a pandemic that prevented people around the world from getting to physical stores, Amazon, Target and other online shopping sites expanded warehouse space and logistics operations to handle booming sales to shoppers, who filled virtual carts from their couches. Now pandemic restrictions have largely been lifted and consumers are headed back to stores.
Established in 2015, Prime Day was an instant hit. Over the years, however, Amazon’s invented holiday has slowed. Sales at this year’s event are forecast to rise 17% to about $7.76 billion, according to Insider Intelligence, a financial research firm. By contrast, sales grew 65%, to $4.32 billion in 2019. Amazon didn’t respond to a request for comment, and the company doesn’t release internal numbers about sales over the Prime Day event.
Unsurprisingly, big name brands also are also feeling the fade from Prime Day, according to industry insiders. In 2020, firms saw Prime Day revenues that were three times higher than the previous two weeks, according to CommerceIQ, which helps e-commerce businesses manage their sales. Last year, the boost had dipped to 2.5 times. The Prime Day lift will likely slide to double typical sales this year, CommerceIQ forecasts.
“It’s not as sizzling hot as it was two years ago,” CommerceIQ CEO Guru Hariharan said of the event.
You could hunt for bargains, or build a disaster fund
Of course, penny-pinching shoppers might be more tempted by discounts than usual if they’re trying to save money this year. People may spend with future needs in mind, like a computer for the coming school year or replacements for aging household appliances, according to Tory Brunker, senior director of product marketing at Adobe.
“Consumers may be thinking it’s better to spend now before it gets worse,” she said of the economy.
Still, not buying anything is the ultimate money-saving tactic.
Meghan Greene, senior director of research at the Financial Health Network, says that’s something plenty of people are contemplating right now.
“Many consumers will be looking for tradeoffs to make their budget work, such as forgoing purchases when budgets are tight,” in addition to looking for discounts, she said.
Prices on Amazon have gone up in line with inflation rates, according to CommerceIQ data, undercutting Prime Day’s purported discounts. That means this years purchases would have been a lot cheaper during last year’s Prime Day.
You might be surprised by the deals
If you still feel like spending, Prime Day will sport plenty of discounts, though some come with caveats. Amazon has to pull out the stops to impress online shoppers because there’s always some kind of sale going on at e-commerce sites, says Sucharita Kodali, a retail analyst at Forrester.
That’s why the company amasses discounts on products from multiple brands in addition to its own devices, cramming as many deals onto its homepage as possible.
“Something like Prime Day, which promises HUGE deals with a changing rotation of new offers every time you go back to the site, is still novel,” Kodali said in an email.
You can also find midsummer discounts beyond Amazon. Prime Day now faces off against Best Buy’s “Black Friday in July” sale and Walmart’s “Deals for Days” event.
There are also signs that some discounts will be better than you might expect. Target, for example, has a lot of overstock to clear out because pandemic supply chain issues have started to clear up, including on flat-screen TVs.
The catch is that some of those items are no longer in vogue. Sweat pants and patio furniture aren’t the must-haves they were during the height of working from home. Expect them to be on sale this month, CommerceIQ says.