Why it occurs earlier in summer season
Amazon confirmed Thursday that its annual Prime Day Deals event will be postponed earlier this year as the ecommerce giant seeks to spur spending on the retail calendar during what is usually a slower time.
The company has not yet confirmed the exact date. The two-day shopping extravaganza originally took place in July, but Amazon said it will now happen in the second quarter, implying an event in June.
Amazon has released a revenue outlook of $ 110 billion to $ 116 billion for the second quarter, beating Wall Street’s forecast of $ 108.6 billion as it included an expected increase from Prime Day.
During a conference call on the results, CFO Brian Olsavsky said Amazon intends to hold Prime Day in early 2020, but those plans have been thwarted by the Covid pandemic. Instead, the event was postponed until October, resulting in an unprecedented start to the holiday shopping season.
“There are a number of factors,” Olsavsky said about why Amazon is bringing the event up. Among these reasons, the CFO named the Olympic Games in July and the “holiday month” for many families.
“It could be better – for customers, salespeople, and salespeople – to experiment with a different period,” he said. “We experimented the other way around … in 2020 by moving it to October. However, we believe it could be better timing later in the second quarter. So that’s what we’re testing this year.”
Over the past several years, Prime Day has spurred retailers like Walmart, Target, and Kohl’s to run competing promotions. And it will probably do it again.
“It creates excitement out of nowhere, straight out of a vacuum,” said Juozas Kaziukenas, founder and CEO of Marketplace Pulse, of Prime Day.
“People are just going to buy more things … and maybe June is a good time to do it earlier,” he said. “Because it’s very exciting when things go back to normal and people are likely to buy more clothes and more travel-related items – that they haven’t bought in a long time.”
In the past, Amazon has used Prime Day to promote and promote its fashion offerings, a growing part of its business. This could be the biggest opportunity to do so as many Americans emerge from their pandemic cocoons and freshen up their wardrobes.
The new timing could also lead to an earlier start to school for many parents. After the winter holidays, the back-to-school season is the second largest retail event.
By moving Prime Day into the second quarter, Amazon could also try to mitigate the comparisons it will face if the stay-at-home locks are exceeded last spring when business was booming. In 2020, Amazon’s revenue rose 40% to $ 88.91 billion in the second quarter, in large part due to customer inventory levels during the health crisis.
“You have a huge number to beat,” said Neil Saunders, managing director of GlobalData Retail. “All retailers will suffer. It’s not tampering, but it definitely gets retail where it needs to be for the numbers to look very positive.”
Other retailers like Walmart and Target also saw sales spike in the second quarter as they were viewed as major retailers and stayed open last spring. Others have had to temporarily close stores due to Covid restrictions.
Amazon didn’t reveal how many sales it had on Prime Day last year, but it said third-party sellers made more than $ 3.5 billion in its market, an increase of nearly 60% from 2019 and a record for small ones and large companies, medium-sized companies that make up the market.
“Prime Day is kind of a false holiday,” said Kaziukenas. “But I think there’s enough excitement and enough marketing that whatever they put out will sell.”
– CNBC’s Annie Palmer contributed to this coverage.