Amazon’s Prime Day Was Earlier Than Usual This Year. Here’s How it Went.

(JUNE 23, 2021) -  Amazon said this year’s Prime Day shopping blitz resulted in the “two biggest days ever” for independent merchants that sell on its website, without providing specifics.

The e-commerce giant’s announcement followed the conclusion of its second Prime Day in eight months after moving last year’s shopping holiday to the fall because of the pandemic. Amazon doesn’t report its total sales during Prime Day, but the retailer in October said sales by its third-party sellers surpassed $3.5 billion for the 2020 event.

Prime Day, which was held Monday and Tuesday across 20 countries, typically creates a revenue surge for Amazon during a summer period when sales can slow. As the event has grown, so too has its importance for the company and its competitors, many of which now have their own deal days. Walmart Inc. is holding a “Deals for Days” event that ends Wednesday, while Target Corp.’s “Deal Days” is running Sunday through Tuesday. Best Buy Co. and others also promoted sales.

Amazon said Wednesday that customers spent $1.9 billion on small-business products during a Prime Day promotion that enables shoppers to receive a $10 credit if they spend $10 on the website’s small-business section, more than double the tally during the October event. The company didn’t provide a total figure spent on small businesses.

Here’s what you need to know about Amazon Prime Day 2021, and the event’s influence throughout retail.

Why did Prime Day happen earlier this year?

Amazon launched Prime Day in 2015 as a way to boost sales. The event, usually set for July, has emerged as a smaller-scale, summer version of Black Friday that is a kickstarter for online shopping in an otherwise slow period. Amazon also has extended the sales period to two days. And it has offered an important boost to Amazon’s quarterly revenue. Amazon’s U.S. Prime Day sales are expected to increase 18% from the previous event to $7.3 billion, according to research firm eMarketer.

Amazon said more than 250 million items were purchased by Prime members world-wide.

Amazon finance chief Brian Olsavsky in April said the company moved Prime Day earlier because of transportation constraints due to the Independence Day holiday. Mr. Olsavsky also said the earlier date made it easier for vendors and selling partners. Moving Prime Day to June will also juice up the company’s second-quarter financials. Like many retailers, Amazon’s April-through-June quarter this year will be the first for which year-over-year sales changes are comparable with the start of the pandemic last year, when Amazon’s sales ballooned due to high demand for online shopping.

How big has Prime Day gotten?

Analysts closely follow Prime Day not only because of its impact on Amazon but also due to its influence throughout the retail sector. Amazon competitors such as Walmart and Target years ago began offering their own deals around Prime Day to grab shoppers already online for Amazon’s event. Including sales from other retailers online, Prime Day will generate roughly $12.18 billion in sales in the U.S., a 17% increase from last year’s Prime Day, eMarketer predicts. Amazon has invested more into the event as its popularity has increased, hosting Prime Day concerts and announcing exclusive deals with celebrities such as the singer Lady Gaga.

While the event has grown, customers this year may not have spent as much on average as prior years. The average Prime Day order this year was $44.75, compare with $54.64 during last year’s event, according to Numerator, a firm that tracks data from online purchases.

Amazon has seen an increased amount of competition in recent years. As the company’s power has grown and been more scrutinized, some smaller e-commerce players have championed themselves as non-Amazon options. New York-based, for example, which pools inventories from local businesses to create a local version of Amazon-like services, advertises itself as being faster to deliver products than Amazon. Retailers such as Express Inc. and J.Crew Group Inc., meanwhile, have in recent years started their own marketplaces to reel in brand-loyal customers.

Amazon critics have also often used Prime Day as an opportunity to air grievances with the company’s treatment of its hourly warehouse workers. Some employees have complained about the rate at which they have to fulfill packages and a strict system inside warehouses that tracks their every movement, with more pressure on delivering packages during Prime Day and the holidays. Some workers have previously held walkouts during the shopping event.

How has Amazon’s influence affected other businesses?

While not all retailers offer Prime-like deals, many businesses have had to emulate Amazon to stay competitive. Some small businesses that don’t sell on Amazon have felt forced to provide one or two-day shipping to keep up with customer expectations set by the retail giant.

Many businesses have turned to platforms such as Shopify to set up their e-commerce operations. Shopify, which has seen tremendous growth in the past year, gives access to cloud-based third-party services such as payments and fulfillment while allowing merchants to maintain more control of their branding and customer relationships than larger marketplaces. The service also enables businesses to list merchandise on the bigger marketplaces offered by Amazon, eBay Inc. and others.

Are Prime Day deals worth it?

Retailers offer significant discounts throughout Prime Day across categories. Last year, toys on average sold for 7.8% less online during the event, while electronics sold for 7.1% less, according to Adobe Digital Economy Index.

Amazon this year promoted up to 50% off from its devices line, which typically consists of bestselling items such as its Echo smart speakers. Other Amazon devices were listed for discounts of as much as 30%, and some TVs or laptops sold for 20% off or more. Amazon said the Fire TV Stick 4K was its most popular item purchased during Prime Day.

While customers can find discounts on items, Black Friday and Cyber Monday deals still appear to have the upper hand. Discounts across categories such as toys and appliances can be at least twice as steep during the period that includes Black Friday and Cyber Monday, Adobe reported.

It is also getting more pricey for merchants to advertise on Amazon, potentially straining the ability of sellers to discount items. Ad costs on Amazon have risen 50% year-over-year, according to research firm Marketplace Pulse. Amazon also implemented tighter limits around the amount of inventory merchants can hold at Amazon warehouses, further straining sellers’ pocketbooks.

How should customers navigate promotions like Prime Day?

Consumers have an array of options when foraging online through the sales event. Ample review sites rank deals and link to promotions, while browser extensions such as InvisibleHand compare prices across the web.

But shoppers should also be wary. Amazon is still a minefield for fake reviews. Some items have thousands of fraudulent reviews. Some sellers have influenced rankings, typically by offering customers refunds or other deals to provide high ratings, with social-media sites often serving as a communications channel for the transactions.

Amazon last week called on social-media companies to work together in solving the issue, which Amazon has said runs against its policies. The retailer said it stopped more than 200 million suspected fake reviews in 2020 before customers saw them. It said in the first three months of this year, it reported to social-media firms more than 1,000 groups that appeared to foster fake review transactions. - (The Wall Street Journal)