By Granth Vanaik and Ananya Mariam Rajesh
(Reuters) – Amazon.com hopes to entice shoppers in the US 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 the very first travel discounts.
A year of inflation has pushed mortgage rates, rents and consumer food prices ahead of Prime Day, which falls on July 11 and 12 this year.
CFRA Research analyst Arun Sundaram said Amazon’s US Prime Day discounts tend to be larger this year than in previous years. The online retailer is offering 60% off Gap apparel, 50% off Sony headphones and 40% off Peleton 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 “Buy with Prime” directly from Amazon’s third-party sellers.
Last year, online sales in the US during Amazon’s Prime Day shopping event reached nearly $12 billion, up 8.5% from the prior year as inflation-plagued Americans plunged into discounted essentials and electronics, according to Adobe, which tracks online expenses.
Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, said Amazon Prime’s revenue growth will be slower this year as many US consumers are still tired of shopping post-pandemic and cautious about “misusing their wallets”.
They “want to spend more on experiences, travel and entertainment,” added Schulman. Running Point Capital Advisors has exposure to Amazon through Exchange Traded Funds (ETFs), among others.
He predicted that Prime Day 2023 could bring about $4 billion to $6 billion in incremental revenue for Amazon, up 10% to 16% from last year as shoppers also benefit from discounts on everyday staples like inventory items. , toiletries and cleaning supplies.
Brian Gleason, Criteo’s Global Chief Revenue Officer, said such discounts could be more attractive to customers in a tougher 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 Priceline’s Hotel Express deals, which offer 60% off hotels.
Prime Day is expected to face stiff competition from other retailers such as Walmart, which offers extensive deals during “Plus Week.” Adjusted to Walmart+ members, Plus Week started on Monday.
Home electronics chain Best Buy is also giving more discounts through its “Black Friday in July” savings event, which also started on Monday.
“This week has turned into quite a big shopping event, similar to Black Friday and Cyber Monday,” said Sundaram, adding that all retailers are fighting for market share.
Bank of America expects this year’s Prime Day sales event to generate $12 billion in gross merchandise value (GMV) for Amazon in the United States, up 12% year-over-year.
Amazon is planning another Prime sales event this year, according to screenshots from 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 on October 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)