Retail Channels
20 July 2022
Prime Day 2022: Inflation's impact, and a look at the halo effect
Data shows price-conscious consumers sought essentials, while non-Amazon US retailers got a lift.

(Illustration by The Current)
Data shows price-conscious consumers sought essentials, while non-Amazon US retailers got a lift.
(Illustration by The Current)
If done with planning and foresight, Amazon Prime Day can have an impact beyond the day itself.
This applies to brands who sell as part of Amazon’s massive deals event. But it also applies to those of us eager to glean insights on what the two biggest online selling days of the year mean for ecommerce as a whole.
Given its far-reaching impact, Prime Day results in a font of data that can be helpful on a number of levels. For one, Amazon is said to be planning another Prime Day in the fall, so there’s a chance to apply lessons right away. The data also provides insight about what’s working in ecommerce, and the state of the economy as a whole.
So, while we already reviewed some of the headline data released right as the event came to close, it's worth taking a closer look across categories, and sources to see what else is worth learning. Here are a few of the key data points that have emerged since the event:
The early numbers showed Prime Day’s sales marked growth from a year ago. Amazon itself shared that the 300 million products purchased on July 12-13 were up from the roughly 250 million items it reported were bought in 2021. The company hasn’t released dollar figures. But when it comes to overall sales across all retailers, online spending on July 12 and 13 totaled $11.9 billion, according to the Adobe Digital Economy Index. That represents 8.5% growth over 2021.
Drilling down into consumer spend on Amazon, market research data firm Numerator’s Prime Day Tracker shows more growth.
Based on its initial read of data from the two days, the average order size for Prime Day was $52.26, up from $44.75 in 2021. Numerator added that 62% of households placed two or more separate items. The average household order size was $144.56.
Four out of the top five best-selling items on the day were Amazon-branded, from Fire TV sticks to Echo Dots. The lone non-Amazon item in the top five was home security cameras and doorbells from Blink. Meanwhile, variety packs from Frito Lay finished in sixth position.
Top categories included household essentials (29%), health and beauty (28%), and consumer electronics (27%), according to Numerator. Meanwhile, 87% of purchases made were either for a household or everyday goods, while larger ticket items shoppers would only purchase on sale accounted for 20% of spend, Numerator reports.
While electronics are typically big sellers at the event, the popularity of household essentials could suggest that shoppers are stocking up on the key items at a time when they are watching their wallets or have fewer discretionary funds available amid signs of economic tightening.
Indeed, 65% of shoppers spent the same or less this year. Further, inflation impacted 83% of Prime Day shoppers, Numerator reported.
Another cohort that is closely tracked on Prime Day can best be described as, “retailers not named Amazon.” While these big names in shopping don't sell on Amazon, they often run their own sales and promotions on Prime Day, and get a midsummer lift because of it. This has been termed the “halo effect” of Prime Day.
In the US, this year’s Prime Day brought growth for US brands and retailers selling on their own sites and platforms, according to data from Salesforce. When compared with the second Tuesday and Wednesday of July in 2021, the two days of Prime Day showed 8% growth for American online sales, the B2B software company’s shopping index found.
In one interesting twist, Walmart still benefitted from Prime Day, even though it didn’t run a specific promotion advertising deals around Prime Day. According to results of a survey of 1,000 consumers from supply chain software firm Blue Yonder, 49% of consumers said they took advantage of deals at Walmart on Prime Day. In 2021, the number that gave the same answer was 35%. Among retailers that did hold deal events, 40% shopped at Target in 2022 through its "deal days" event, versus 26% in 2021. Best Buy’s Black Friday in July event, meanwhile, attracted 26% of respondents in 2022, versus 15% in 2021.
Globally, sales on non-Amazon sites were down 12% in 2022 compared to Prime Day 2021, Salesforce reports, noting that this number was soft itself when compared with 2019 and 2020.
In a post analyzing the results, Salesforce Director of Consumer Strategy and Insights Caila Schwartz wrote that this was the result of oversaturation of product as demand for goods rose in key categories, as opposed to shopper behavior.
“High-ticket products like electronics and sporting goods saw meteoric holiday sales growth in 2020 and the first half of 2021 — resulting in a market with too much product and not enough customers,” Schwartz wrote.
Prime Day provided a boost on the heels of a quarter that showed slowing ecommerce sales growth. In the second quarter, US ecommerce sales were up 2% year-over-year, while global sales for the same period declined 6% year-over-year, Salesforce reported. During a period of elevated inflation, however, prices are going up. The average selling price for the second quarter rose 9% in the US, and 4% globally.
As back-to-school shopping kicks into gear and brands and retailers start to get ready for the holidays, it's a fair bet that a big focus will remain on prices. Especially as many retailers continue to attempt to clear out inventory that is mismatched to demand as a result of supply chain challenges, the discounting behavior that appeared on Prime Day appears poised to continue all year long.
Accurate inventory is now essential for Amazon FBA sellers, writes Emplicit's Evan Sherman.
Amazon used to be a lot more laissez faire about how Fulfilled By Amazon (FBA) sellers used their fulfillment centers. Sellers could send in inventory, and, while the space wasn’t unlimited, if their sales were not as forecasted they would simply pay long-term storage fees. Sure, if a seller’s inventory management was poor enough they would have their inventory storage limits reduced and pay higher storage fees, but this was just an incentive not to let things slide too much.
However, in 2022 Amazon reduced storage limits overall to the point where some FBA sellers had sales and catalog size impacted, and in March 2023 Amazon revised their inventory system. There is now an incentive for FBA sellers to be highly accurate with inventory management because Amazon will reward them with increased storage limits. Precision is a carrot now, rather than a stick.
In this article, we provide five strategic methods that sellers can utilize to optimize inventory management on Amazon.
Achieving successful inventory management on Amazon requires a profound understanding of past demand patterns and the capacity to accurately forecast future demand. Seasonality, market trends, historical sales figures, competitor activity and planned promotions all play a crucial role in determining the trajectory of sales.
At Emplicit, we advocate for the analysis of multiple historical data points, encompassing previous 7, 30, 60, and 90-day sales figures. Our logistics experts factor in internal factors such as stock availability, marketing spend, promotions, and sales and margin targets, and external factors such as seasonality, Amazon trends, new category restrictions and market entrants. A comprehensive review of shipments in working, shipped, or receiving status is also beneficial. Striking a balance between what has been sold, what is available, and what's en route to an Amazon fulfillment center is key to precise forecasting.
Inventory management isn’t a static task; it requires constant vigilance and flexibility. FBA sellers should regularly review and modify their demand forecasts, adjust their replenishment suggestions based on demand shifts, and update their minimum reorder points as required.
Sellers should review sales daily, plan replenishment frequencies to suit their needs, and maintain appropriate inventory levels at Amazon. Weekly replenishments can help keep a seller’s inbound pipeline full, minimize out-of-stock instances, and account for unforeseen supply chain disruptions.
Amazon’s organic and paid algorithms prioritize products with high sell-through rates. This means best selling products end up selling better. Focusing on high-performing items allows FBA sellers to reduce monthly storage costs, avoid aged inventory and the associated fees that Amazon imposes, and curtail the need for costly removal orders. And sales velocity is the quickest way to get Amazon to increase your storage limits. Concentrate on the 20% of items that generate 80% of sales.
At the same time, sellers should prune their catalogs by removing slow-selling items. These items negatively affect Amazon’s Inventory Performance Index (IPI) score, which directly influences the space Amazon allocates to a seller’s inventory in their fulfillment centers.
If sellers are tight on inventory space, as well as the best-selling products, they should prioritize products with higher margins until Amazon provides additional storage, and they should reduce marketing spend accordingly – something which necessitates a close relationship between inventory and marketing.
Ranking products by sales and margins, and calculating the storage space each product takes up will go a long way towards understanding and anticipating demand on Amazon.
Amazon’s capacity management system is a new system for allocating inventory limits to FBA sellers and allowing sellers to gauge their inventory capacity at Amazon’s fulfillment centers. It also enables sellers to bid on increases to their inventory limits.
Previously, Amazon had restock limits which were updated weekly based on the seller’s previous 90-day sales. Restock limits were determined by Inventory Performance Index (IPI) metrics such as sell-through, excess inventory, and stranded inventory. However, because the restock limits were updated weekly, it was challenging to plan accordingly, especially heading into a peak season or if a seller was about to run a promotion.
With Amazon’s Capacity Monitor program, sellers are given a monthly capacity outlook based on the cubic feet of space occupied by their products in Amazon’s fulfillment centers and their IPI metrics. Amazon not only provides a current month outlook on available space; they provide an estimate for the next three months which can aid in the inventory planning process.
To take advantage of the new system, it’s imperative FBA sellers understand their product's physical footprint in relation to the allotted space Amazon provides (Amazon does still provide unit estimates). Knowing a product’s cubic feet and the product tier designation allows for effective planning of inventory replenishment. Exceeding space limits means overage fees from Amazon, however, if a seller knows they have a peak in sales coming up they can bid for additional capacity (in cubic feet). However, selling-through this additional inventory means Amazon waives those fees, so it’s a win-win.
At Emplicit, we have seen the capacity monitor program benefit our clients, with many clients seeing an increase in the amount of inventory they can ship in – likely due to healthy sell-through velocity and other IPI metrics. The program has fundamentally changed the way we approach managing our inventory on Amazon, so everything sellers do regarding inventory planning should be within the context of Amazon’s capacity monitor program.
Smart sellers should already be considering the impact of their product packaging on their FBA fulfillment fees. If the actual product size allows, sellers can generate significant savings by reducing the size of their packaging. Amazon’s Small Standard rates are 15-20% cheaper than Large Standard rates depending on weight, and Amazon’s Small & Light rates are 15-27% cheaper still than Small Standard rates. However, fulfillment cost savings are not the only reason to reduce packaging size, smaller packaging can significantly increase Amazon inventory cost-efficiencies.
With Amazon’s capacity management system providing inventory space based on cubic feet rather than number of units, the space each product takes up is now more important than ever. While larger packaging sizes can sometimes improve sales in brick and mortar retail, sellers should consider developing smaller Amazon-only packaging. This will not only reduce fulfillment costs, but allow more units to be stored in the same inventory space. The combined savings can more than offset the cost of a redesign and second packaging print run.
Additionally, smaller packaging may qualify sellers for Amazon’s Compact By Design badge. This helps brands stand out, and increases click-throughs and conversions. (We suspect there are algorithm tweaks for brands with certain badges too, but it’s difficult to prove.) Amazon-specific packaging can help with Transparency (anti-counterfeiters) and help combat unauthorized resellers.
While it might seem like a significant investment and not something the inventory team typically gets involved with, reducing packaging size is a long-term way for FBA sellers to optimize inventory management.
Amazon Global Logistics (AGL) offers a streamlined solution for sellers whose products are manufactured in China. AGL eliminates the need to use freight forwarders who would usually receive a shipment from China, then split up that shipment and forward on to multiple Amazon fulfillment centers per the standard FBA process. Instead, sellers can book shipments directly with Amazon, complete the necessary export/import documentation, and ship directly to US, UK or European fulfillment centers – sending the entire shipment to a single fulfillment center.
If leveraged properly, AGL can save sellers thousands of dollars in warehouse and 3PL fees and reduce the need for inventory to be processed multiple times before it arrives at Amazon’s fulfillment center, meaning inventory gets where it needs to be quicker.
AGL offers two shipping options – Standard Ocean Freight and Fast Ocean Freight – with the standard option giving sellers the opportunity to either ship via a full container load (FCL) or less than container load (LCL). Shipping partial container loads with Amazon doesn’t slow shipments down versus other carriers because of Amazon’s scale. Amazon’s economies of scale mean that AGL can offer shipping prices from mainland China and Hong Kong that most sellers are unable to match. And Amazon’s expert customs brokers get products cleared through customs quickly because Amazon has a vested interest in shortening the time to market.
This one-step international shipping direct to Amazon was actually something we pioneered before the advent of this service from AGL – working with our client Shapermint and their manufacturers in China and logistics team to ensure packaging and shipments were FBA compliant. However, now AGL offers this service, it’s an even easier solution to a common challenge. We suspect AGL will roll out in other international manufacturing markets, but Amazon is tight-lipped for now.
Amazon inventory management is complex and needs constant attention. Sellers can hire a fractional inventory specialist because this is not something that should be trusted to an Amazon generalist. If sellers get inventory right, it will keep pace with sales. But if they get it wrong, their inventory can become the main thing holding them back.
Evan Sherman is the director of logistics at Emplicit.