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Retailers already discounting as Amazon Prime Day sets the mood for peak trading 2020

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Retailers already discounting as Amazon Prime Day sets the mood for peak trading 2020

Next week’s Amazon Prime Day is set to signal the start of the 2020 peak trading season, analysts agree, although one warns that it could prove a lacklustre start. Data suggests that retailers are already discounting heavily ahead of the event, to be held on October 13 and 14. This year’s Amazon Prime Day, delayed from July, is being held across more countries than ever, with Turkey and Brazil taking part for the first time and among the 19 markets set to be included in the event.

 

eMarketer principal analyst Andrew Lipsman says this year’s Amazon Prime Day will stand apart from its predecessors. “Amazon Prime Day this year will be unlike any other since its debut five years ago. Against the backdrop of a pandemic and recessionary headwinds, this year’s event promises significant changes that will shake up the entire retail landscape heading into the holidays.

 

"Prime Day kicks off nearly three months later than its typical mid-July timing. This will result in a different focus: de-emphasizing products for summer and back-to-school, and making the event an early lead-in to the holiday season.”

 

He says the event operates, in practice, as a “huge membership drive” for Amazon Prime, since all deals are only available to signed-up members of the subscription scheme. “Prime Day lowers Amazon’s customer acquisition costs and increases customer lifetime value,” says LIpsman. “The company reported that last year’s Prime Day event delivered the highest-ever number of new Prime membership sign-ups over a two-day period.”

 

Other retailers are well placed to benefit from the event, says Brian Green, head of commercial sales, EMEA at Adobe. He suggests that Prime Day will set the level for the rest of the Christmas shopping season

 

Green says: “This Christmas, savvy shoppers will want to get the best discounts online and ahead of time, as Covid-19 creates uncertainty over high-street closures, dents consumer confidence, and wreaks havoc on retailers’ supply chains. Amazon Prime Day couldn’t come at a better time – the Christmas shopping season has unofficially begun.

 

“Whilst the online giant took the lion’s share of digital spend during the pandemic, retailers should take Amazon Prime Day as an opportunity to boost their own spend as we begin the Golden Quarter. Online shoppers might be eyeing up products on Amazon, but now more than ever, they’re doing their due diligence and checking prices on competing sites, too – especially as the majority are now working from home. Matching prices is one place for brands to start, but they can also ensure the online experience sets them apart. With great website design, personalised content and offers, friction-free payment and seamless delivery, they can benefit from Amazon’s halo effect at a time when they need it most.

 

“All eyes are now on the success of Amazon Prime Day in the UK and overseas. It will be the bellwether for the rest of the Christmas shopping season when it comes to online spend – retailers should take note of consumer behaviours and plan accordingly as notable key moments such as Black Friday approach.”

 

LovetheSales.com says it’s already seeing high levels of discounting among rival retailers as the two-day Prime Day event approaches. Its analysis suggests that the volume of online discounts is up by 23% this month, compared to last October. It says Currys PC World is leading the way with a 156% increase in the number of products that are discounted in October, compared to a year ago, followed by Argos (+105%) and AO.com (+78%). Consumer searches, meanwhile, suggest that sought after products will include the Nintendo Switch, Amazon Echo Dot, Amazon Kindle, and the KitchenAid Artisan Stand Mixer.

 

But it warns that Amazon’s sales during the event could fall well short of the £5.35bn it turned over last year.

 

Analysis from the discount marketplace suggests that online searches in the lead up to Prime Day are down by 44% in Amazon’s domestic US market, and by an even greater 54% in the rest of the world. It’s predicting that Amazon sales will fall by £2.63bn as a result.

 

Stuart McClure, co-founder of LovetheSales.com, said: “Prime Day sales have been increasing year-on-year for the past five years, according to Amazon. However, the etail giant has spent billions ingraining Prime Day as a July event. The data shows a steep drop off in either lack of awareness of lack of appetite for this year’s October Prime Day. And with Black Friday just around the corner, many shoppers might just give Prime Day a miss this year."

 

This year’s peak trading is set to be very different from previous years. Customers who plan to buy online have already been warned to start shopping as early as they can since the shift to ecommerce that has already been seen this year is set to see an additional strain as peak starts.

 

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