Prime Day is just the tip of the iceberg when it comes to holiday shopping this year

Last week marked the biggest October Prime Day for Amazon.
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Francis Scialabba

· 4 min read

Amazon’s biannual Prime Day sales event is over, but it’s hardly over when it comes to expectations around shopping during the holiday season.

Like last year, shoppers are still pinched for dollars, and now resuming student loan payments are another factor retailers have to keep in mind. But Amazon’s second Prime Day sale simply greased the wheels for the holiday shopping season. Experts told Retail Brew that retailers across the board should, of course, anticipate more spending in the coming months but to also temper expectations given current economic conditions.

  • Last week marked the biggest October Prime Day for the company, as shoppers saved more than $1 billion and Prime members purchased more than 25 million items with same- or next-day delivery.
  • According to Amazon, apparel, beauty, home, and toys were the bestselling categories across the two-day shopping event.

“Prime Big Deal Days was a strong start to the holiday shopping season, offering Prime members an exclusive early opportunity to save and surpassing our expectations. This event outpaced last year’s holiday kick-off event, with more Prime members shopping this year,” Doug Herrington, CEO of Worldwide Amazon Stores, said in a statement.

The second Prime Day is very much an experiment for Amazon as the company hopes to drum up demand in the middle of summer during its first sale and then preempt the holiday shopping season with the second sale, Rob Garf, VP and GM of retail at Salesforce, told Retail Brew.

  • However, drumming up demand incentivizes other retailers to match that energy with their own sales holidays. Target’s Circle Week took place the week before Prime Day, but there were still markdowns available into the following week, including to some of the retailer’s loyalty members.
  • Walmart also had a bevy of discounts during its own sales event meant to go up against Amazon.

Wait and see: Salesforce data shows that there was a 4% year over year decline in online sales for non-Amazon sales in the US during Prime Day(s) and a 3% drop globally in discount rates. Garf and Salesforce predict that there will be a 30% bump in discount rates throughout the week preceding Thanksgiving and through Cyber Monday, where he said 25% of all sales will be concentrated.

  • “We have been seeing a smoothing out of demand throughout that entire week,” he said. “Thanksgiving is a really popular day now, especially after people are done with their Thanksgiving meal. We see between 4pm and 7pm local times…traffic spikes and buying spikes.”
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But not all categories are created equal. Sporting goods, beauty and makeup, and luxury handbags saw the most traffic among non-Amazon brands, with a 22%, 16%, and 27% growth in online sales respectively. Luxury handbags, as Garf mentioned, was a uniquely interesting category given that there was a 29% decline in discount rates, and he said overall luxury has been one of the most resilient categories during the pandemic years.

Figuring it out: Amazon is in a more unique position this year after CEO Andy Jassy publicly stated that the company is in one of the most difficult financial positions it’s been in the history of the company. In April, he penned a shareholder letter that explained Amazon’s cost-cutting measures that included laying off 27,000 corporate employees through the end of last year, and dealing with the challenges of a new economic environment.

  • Neil Saunders, managing director at GlobalData Retail, mentioned that Amazon has done away with many business verticals and operations that haven’t panned out, including shutting down 99 business facilities and its 4-star and bookstores storefronts.
  • Instead, Saunders said Amazon wants to focus on what it does best, which is affordable prices and the convenience of purchasing everyday goods and more at a click of a button. But that doesn’t necessarily mean a second Prime Day is a guarantee moving forward.

“They also realize that consumers are starting to buy and plan for the holidays earlier and earlier. This was true last year; it’s true this year,” he said. “Amazon really is responding to consumer needs and consumer demand and giving consumers an excuse to stop and kick off the holiday season. Now, whether they’ll keep doing that in the years ahead remains to be seen.”

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.