What Did Amazon Do This Week? - 16-07-2023 [+40 LINKS]

AMAZON PRIME DAY WAS GOOD, NOT GREAT

Created in 2015, Amazon’s Prime Day isn’t as old as most people think and while it does generate Amazon billions in revenue every year, it’s not always a home run.

Overall, Prime Day was a success with Amazon making almost $13 billion (up 6.1% YoY). Shoppers spent roughly the same on both days and according to Adobe Analytics, 375 million items were purchased worldwide and there were more deals than ever. The top tech brands purchased came from Apple, Samsung, iRobot or the usual suspects. Smartphones remained a popular category. Records fell but no one is throwing around the word ‘smashed’.

Those who did purchase goods tended to buy cheaper than in previous years with more than 50% of goods being under $20 and just 5% spending $100 or more. Likely by design with Amazon and co reading the global room, but also generally people have less money in their pockets. The average basket was just £2 more than last year at $54.05 which won’t send any stakeholders diving into their Scrooge McDucky pools of money.

Increasingly data from different sources show a different behaviour forming; customers really waiting until Prime Day to buy goods and for others. An opportunity for Amazon to build on the excitement, but also a worry for Amazon as they will strain their systems and people in order to fulfil orders. One way they could help themselves is by helping customers ship all household orders in one box - over two-thirds of Prime customers placed multiple orders.

People bought for their homes (28% of purchases). While consumer electronics remained a strong driver of purchases, people spent more on homes, pets and other non-electronic items (21%) than ever before. Possibly due to economic crises happening, but also a shift in priorities and the post-pandemic TV/electronic goods upgrade lull. According to Numerator the top-selling goods were…cat treats. Here’s how the early data is breaking down:

While 2023 saw the biggest Prime Day ever, results did squeak in rather than roar which lends itself to rumours that are circulating that Amazon may cancel its Prime Day sales event after 2023. The share price bumped just 2%. Growth fell below multiple analyst’s expectations of 9.5% YoY and even with high inflation and economic uncertainties spending was robust, but will the growth be enough to justify all the work, stress and squeezing merchants that come with every Prime Day? Also, reliance on influencers and areas that aren’t Amazon’s wheelhouse will cause internal folks to raise eyebrows. Consumer budgets are unlikely to be any better this time next year in the markets that matter most to Amazon. The company might just focus on other areas and grow them instead.

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