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Amazon Prime Day 2022 will take place on July 12-13.
That was the announcement from Amazon on Thursday morning, ending speculation among brands and sellers. The deals event officially kicks off at 12 a.m. PST on July 12, and runs through the end of the day on July 13.
Held since 2015, Amazon Prime Day offers deals on products sold by national brands and third-party sellers alike. Now a two-day event but still called Prime Day, this year’s discount extravaganza is being held across 20 countries. From Amazon’s perspective, it’s all centered around offering discounts to Amazon Prime, the company’s long-running membership program that offers members free shipping and returns.
For brands and other sellers, it’s a big opportunity to get in front of millions of shoppers. While the deals that typically come to mind are for TVs, instant pots and Ring doorbells, there are a bevy of products offered from brands of all sizes on Prime Day. That makes the announcement of the date closely-watched throughout the ecommerce and retail community.
On its first quarter earnings call in April, the ecommerce platform tucked in news that its annual deals event will take place in July. Almost two months later, there’s much more fanfare around the official announcement of the dates. It’s now clear that it will be a mid-July event.
Amazon also previously shared key deadlines for sellers, which still apply.
The timing squares with what Jon Elder, who consults with Amazon sellers as founder and CEO of Black Label Advisor, expected when he shared tips for Prime Day sellers with The Current earlier this year. Check out The Current's full guide.
The announcement of the date for Prime Day signals that preparations are set to move into full gear. Amazon previously shared the following deadlines:
- June 20: The inventory shipment deadline for FBA sellers.
- July 8: The deadline for Prime Exclusive Discounts for Prime Day.
For sellers, that means the time to monitor inventory closely across Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM) has arrived, Elder said.
“Sellers will need to be extra watchful with their check-in times at FBA warehouses and have their FBM listing ready to go in case there are any delays,” Elder said Thursday.
Prime Day has become a veritable holiday on the ecommerce calendar, with activity building to a fever pitch in the days leading up to the event. Amazon is doing its part to help that push this along year. In fact, it is offering early deals starting on June 21.
On Thursday, the company announced a flurry of activities taking place in the days before Prime Day. They also demonstrate how Prime membership ties in with Amazon’s constellation of other subscription offerings. Offers include:
- Deals on Amazon devices, smart and Fire TVs that begin on June 21.
- Discounts on access to Amazon media platforms, including Wondery+, IMDbPro, Prime games, Audible Premium Plus, Amazon Games and Amazon Music, as well as a member benefit at Amazon Fresh grocery stores.
- Live shopping events on Amazon Live featuring celebrities and influencers including Porsha Williams, Joe and Frank Mele and Lala Kent.
- Buy Now, Pay Later with Affirm: From From June 28 through July 11, members can receive 0% APR on three monthly installment payments when they spend $50 or more on eligible products on Amazon upon credit approval by Affirm.
- Rewards through the Amazon Prime Rewards Visa Card from July 1 through July 29.
The deal activity extends beyond the Amazon sphere, as well. Brands and retailers outside of the platform often run their own discount events, creating a so-called halo effect that boosts ecommerce spending for all around Prime Day. With the elevated attention to buying goods, brands often see a boost while marketing through their preferred channels, as well.
This year, Prime Day arrives in the midst of a pandemic-era economic swing that happens to center on price. Record inflation is driving prices up, leaving many shoppers conscious of deals. At the same time, costs are going up for businesses, potentially limiting what sellers can offer.
There are already warnings emerging that Prime Day spending may be lower this year. A survey of 1,137 shoppers from RetailMeNot states that the average shopper is expecting to spend $388 on Prime Day this year, down from 2021's planned spend of $594. Nevertheless, it remains a magnet event, as 88% of shoppers plan to participate, the survey states. There are also signs of shifting shopper interests, as home decor and fitness equipment that were popular in the pandemic are each down five percentage points in terms of share of expected spend.
This dynamic adds importance to the incentives that Amazon is offering. Elder pointed out that this is the first Prime Day in which the company is offering the Buy Now, Pay Later benefit through Affirm, the fintech company with which the company signed a partnership in August of last year.
“This should boost sales for sellers across all categories as it presents customers with additional flexibility for making purchases this Prime Day,” Elder said. “My guess is that this is strategic to boost Prime Day sales to combat rising inflation and plummeting consumer sentiment.”
Spurred by Amazon, price was a key area where ecommerce had an advantage over traditional retail that helped it grow. Holding Prime Day at a time when deals are top of mind could be a shining example of how it remains an important part of the equation.
As if to underscore the point, Prime Day might not be the only Amazon deals event to be held this fall. According to a report in Business Insider, Amazon is planning to center Prime in a deal event this fall. In communications viewed by the news outlet, sellers are being asked to submit lightning deals by July 22, with a shipment deadline on September 12. The deals event could bring a boost to Amazon sales at a time when it is looking to get back to topline growth of its consumer business following a disappointing first quarter by its own lofty standards. For sellers, it means more opportunities to tap into Amazon's ability to attract shoppers, even as some could effectively be managing two events at once.
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The company is pulling back after breakneck pandemic expansion. Will it sacrifice the shopping experience along the way?
Amazon is in a period of rebalancing.
The company has long scaled at a relentless pace as it sought to not only provide a marketplace for commerce, but the infrastructure that enabled it, as well. Amazon found another level of overdrive over the last two years, as demand spiked to unseen heights during the pandemic and the company tried to build to keep up.
This wasn’t necessarily a period that saw the kind of invention that Jeff Bezos made an existential tenet of the company, but it nonetheless seems to be shaking out as a cycle that included risk and fallout.
In this case, the risk was not a new device like a smartphone or a move to bend the future to Amazon's will like drone delivery. Rather, it was an expansion that took its already-vast operations to new heights.
Nowhere was this more evident than the company’s logistics network. As CEO Andy Jassy described it to analysts Thursday on an earnings call, the company doubled the size of a fulfillment network it took a quarter-century to build in two years. It also built out a last-mile delivery network that was the size of UPS, which is one of the top two carriers in the U.S.
In 2022, all of that expansion ran into 40-year-high inflation, war in Ukraine and a pullback in demand for goods amid reopening. The company first admitted the problem: It had overbuilt.
But the solution is not to tear down. It had to keep expanding as only Amazon does, while still cutting back in a period of “belt-tightening,” as executives have put it.
That’s evident in watching developments out of the logistics network alone. Amazon pulled out of some areas, and canceled plans to expand into some new warehouses. Yet, as Business Insider reported, it still added 79 million square feet – a footprint that is equal to half of next-closest competitor Walmart’s entire distribution network. It is also expanding Buy with Prime, a new program that will allow direct-to-consumer brands to offer Prime benefits, and, by extension, access to Amazon’s logistics network. Another service, called Amazon Warehousing and Delivery, is designed for upstream storage, necessitating more space to be made available in the network.
At the same time, it will seek to keep doing more for consumers.
Jassy indicated as much when he was prompted to outline his priority areas. Beyond cost-cutting, he said speed is the second highest priority for Amazon. As if to conform this, he said later in the call that one-day shipping is getting off the ground in North America.
Selection is another priority area. At Amazon, that phrase translates to a few things, but top of mind is “expanding the third-party seller marketplace.” Third-party sellers accounted for 59% of sales in Q4. Beyond sales, Amazon’s work with the sellers who post their products on the marketplace is also lucrative for the company. Amazon allows these sellers to tap its logistics network to offer Prime through the Fulfillment by Amazon program. Its business segment called third-party seller services grew 20% year-over-year in the fourth quarter, right in line with the massively profitable cloud computing division Amazon Web Services.
Price, Jassy said, is another area of importance, especially with the consumer pullback on discretionary purchases being observed amid inflation.
“I think pricing being sharp is always important,” Jassy said. “But particularly in this type of uncertain economy, where customers are very conscious about how much they're spending, having the millions of deals that we put together with our selling partners in the fourth quarter was an important part of the demand that you saw.”
Finally, Jassy cited a priority of improving the customer experience. He said Buy with Prime would give subscribers the ability to use their benefits across the web, and noted that virtual try-on for shoes brings change to the shopping experience.
But it’s in this area that the tradeoffs that may be happening under the surface may rear their head again. GlobalData Managing Director Neil Saunders noted that online shopping generally is becoming “more difficult" on Amazon.
“While the Amazon marketplace is far from a terrible place to shop, it has become more complex and cluttered with a multitude of products, delivery options, and prices levels for shoppers to sift through,” Saunders wrote in note released at the time of the earnings call. “The result is that impulse buying has dropped and that more people are migrating away to other retailers. This is not yet a serious problem as erosion has only happened at the margins, but it is something Amazon will need to address and arrest to prevent further decline.”
Taking a rhetorical step further, the journalist John Hermann wrote this week that a “junkification” of Amazon is taking place, while arguing that “everything is going according to plan" for the company.
He placed the growth of the third-party seller marketplace at the center of this trend. But it also comes as Amazon grows its advertising business, with many taking note of a growing number of ads on the platform. The company also wants to keep growing Prime, and is now using content such as Lord of the Rings and NFL’s Thursday Night Football as key acquisition channels. Both had “record” signups of new Prime members, CFO Brian Olsavsky said.
“We see a direct link between that type of engagement and higher purchases of everyday products on our Amazon website,” he said.
It will have to do each of these things at once, while entering a period that will require it to be “more targeted with its growth ambitions,” as Saunders put it.
"Since its inception, Amazon has had a culture of throwing dollars at many different things to see where they led and what they could learn," Saunders said. "That approach worked well for a younger, fast-growth business. It works far less successfully for a more mature entity. In our view, management deserves credit for recognizing this and quickly responding. However, the shift requires a lot of care because Amazon needs to find a new balance between being ambitious and innovative and being more frugal with its spending – which will be very challenging."
Jassy said the changes of the pandemic made its logistics a "different network." That may be true of the whole company. Rather than an isolated cycle of overbuilding and pulling back, this may prove to be a period that changes Amazon altogether. The bets will still be there, but the risk will be magnified with fewer dollars that don't pay off to go around. As hinted by the logistics buildout of the pandemic and even Buy with Prime, they also may look more operational.
Less delivery robot, more delivery optimization.
As Jassy put it: “We're going to be very thoughtful about how we streamline our costs, and I think you see a lot of that, but we're also going to continue to invest for the long term.”
The recipients of those investments will say a lot about where it wants to head in this next year.