Following Amazon.com’s Prime Big Deal Days, all eyes will be on the performance of the company. The 2022 Big Deal event didn’t generate the same amount of buzz as that year’s July Prime Day, as shoppers placed smaller orders and purchased lower-priced items, with inflation being cited as a major factor for shoppers.
This year’s July Prime day event broke records, with sales during the two-day event totaling $12.7 billion. Did 2023’s Prime Big Deal Days see similar results and outpace the performance of last year’s event?
Based on Affinity Solutions’ Consumer Purchase Insights, which uses actual credit and debit card transaction data, Amazon should experience a bump during this year’s event. In August, we found that consumer spending at non-store retailers (including Amazon) outpaced growth across all retail categories, with a 25 percent year-over-year (YoY) increase. This follows a 22 percent YoY increase in July.
Our data also found that since 2019, Amazon’s share of non-store retail spending during Prime Day were significantly higher than non-Prime Days during the same month. For instance, in 2019, Amazon’s share for Prime Day was 58 percent vs. 33 percent for the same month in total. In 2022, Amazon’s share went from 43.8 percent for the month overall to 63 percent on Prime Days.
Non-store retailers like Amazon are highly favored among consumers because they make shopping easy. Consumers value convenience, so they’ll continue favoring the channels that remove friction from the shopping experience. Additionally, with shipping costs going up and many customers getting free shipping through Prime, the option becomes even more enticing.
Amazon and other non-store retailers are also highly favored among low-income households, so the company should expect to see much of its sales come from this group during October’s event and the subsequent holiday shopping season. In August, low-income households (making less than $35,000 per year) led the pack among all households, outpacing middle-income consumers by over 7 percent YoY and high-income households by over 6 percent YoY. With many of these customers on the hunt for deals and low prices, we expect this group to be frequent shoppers during the Prime Deal Day event.
While Amazon is the dominant force in the U.S. with its shopping holidays, other retailers like Target and Walmart have tried to capitalize on the trend, offering their own deals to compete with Amazon. For example, in the days before Prime Day, Amazon shows a notable decline in sales, with market share dropping to 40 percent as Target and Walmart run pre-Prime Day sales to generate more revenue.
So, what can these retailers offer to entice shoppers to their own events?
One way to stand out is to offer discounts on high demand products and use them as loss leaders, if possible. This will draw shoppers who are looking for a specific item they can’t find at other sites and creates some goodwill among consumers for the uniqueness of their offerings.
Additionally, retailers can offer special incentives for participating in the sale, like a free trial to another service or a discount coupon to apply to a future purchase. Consumers love a good deal, especially with inflation ticking back up again, so this offer will go a long way towards building customer loyalty with new and existing customers.
Finally, retailers should offer free or discounted shipping. These offerings are now table stakes with the big three retailers, so providing some discount will help other retailers ease the strain on customers’ wallets and keep them within their ecosystem instead of shopping at another retailer.
Prime Deal Days are expected to again be a big driver for Amazon ahead of the holiday season, but by adopting some of the retailer’s techniques and creating some “special” events and offerings of their own — or even targeting consumers based on competitor purchases — other online retailers can benefit from the increased consumer interest in non-store retail purchases.
Jonathan Silver is founder and CEO of Affinity Solutions, the authoritative source of truth for news outlets, not-for-profits, research firms, and businesses in the US and the only source for purchase insights that can be analyzed by demographic, geographic, lifestyle segment, and political affiliation.
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