US consumers spent a record $6.4 billion online in purchases this year for the 48-hour Amazon Prime Day sale, this was up 7% over last year with the average sale $56.64 claims Bloomberg.
For its ninth year of the shopping mega sale, the retailer titan had attempted to entice customers with a huge number of deals and a new “invite-only” option, but the question is, did Amazon’s strategy work?
Inflation and the increase of goods have globally increased, and the most recent Amazon profit reporting does not offer a clear picture of their revenues accounting for inflation.
In Australia, the latest data from the Australian Bureau of Statistics (ABS) shared that the monthly Consumer Price Index (CPI) indicator rose 5.6% in the 12 months to May 2023.
Whereas across the pond in America, the U.S. Bureau of Labor Statistics released May 2022 to May 2023 data revealing consumer goods (food and energy not accounted for) increased by 5.3% which was added to the increase of 8.1% for the year ending in April 2023.
This week in America, Amazon Prime Days sales grew 5.96% in the first 24 hours but had failed to reach the 9.5% – 11% Adobe and Insider Intelligence had previously estimated year over year.
Despite reports suggesting Amazon shares went up by 1.6% during the sale, Investopedia has reported that for the last couple of years, Amazon has seen negative returns since Prime Day has begun.
“Of the eight Prime Days so far, just three (2017, 2018, and 2021) have yielded positive returns for Amazon shares, while five (2015, 2016, 2019, 2020, and 2022) have yielded negative returns,” Investopedia wrote.
Additionally, Amazon’s AWS segment of the business and a significant operating profit contributor, is experiencing reduced growth.
According to Forbes, AWS had a “record low of 16%” in the first quarter and it is expected to lower further.
Part of the challenge for Amazon is that it has oversaturated the market with its brand and maxed out on the number of customers it will have. Further, consumers are starting to cut costs on big-ticket items and household goods to stretch their budgets.
For the time being, the numbers reflect modest growth for Amazon but to truly understand how well this year went, we’re still waiting on having a clearer picture of the financials reflect how inflation and cost of products have affected Amazon Prime Day 2023.
