Despite shortages of stock, price rises and brands not wanting to give away margin the Prime Day sale has surged with sales up 30% according to analysts.
Cashed up consumers with COVID lockdown savings have flocked to the Amazon web site where Amazon’s own products including Ring doorbells and speakers were big sellers.
Amazon launched Prime Day in 2015 in the USA and 2019 in Australia to attract new subscribers who pay $54 a year or $6.99 a month for shipping discounts, video streaming and other perks.
The event helps Amazon lock in shoppers by offering them deals on Amazon gadgets and products from brands looking to shift volume stock. Several distributors actually manufacture stock for the Prime day sale.
According to Bloomberg, spending on Amazon will reach US$7.76 billion in the US and US$12.5 billion globally during the two-day sales, this is tipped to be up 17% from a year earlier, according to research firm EMarketer.
Instead of dangling discounts, brands are spending heavily on Amazon ads to lure consumers this is revenue that is being stripped from the likes of Google and Facebook. For brands the advertising investment is half that on the online store’s competitors.
Typical household spending was over A$130 on day one this was up 20% from the early hours of the previous sale last June, according to Numerator, which is tracking Prime Day spending from 973 households.
This year shoppers appear to be looking for utility products overindulgences and are spending more than anticipated even though many sellers are limiting the deals to protect their profits amid rapid inflation.
Bloomberg claims that branded products, which generates $250 million in annual Amazon sales from a selection of about 40 products, reports that Prime Day sales have surged 30% — far outstripping its expectation of single-digit growth.
Branded offered fewer discounts, but sales remain strong, Chief Executive Officer Pierre Poignant said. Top sellers are appliances and recovery products such as back rollers and massage products.
“We pushed for profits this year, and sales are surprisingly strong,” he said.
Channel Key, an e-commerce consulting firm with 70 clients that generate more than $100 million in combined annual revenue, said sales rose about 12% in the first six hours of Prime Day compared with a year ago. Health and beauty products and supplements were among the top performers, indicating shoppers are looking for deals on items they use regularly, according to CEO Dan Brownsher.
