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Amazon’s first fall Prime deals event got underway Tuesday (Oct. 11), as the company looked to give shoppers discounts for an early holiday shopping haul.
Prime Early Access Sale is arriving as retailers are seeking to jumpstart the holidays in October during a year that has been marked by rising inflation and uncertainty in the wider economy. For Amazon, it’s a move to duplicate the success of its midsummer Prime Day, which itself posted record results amid steep discounts in 2022.
Alongside its own connected devices like Echo Dots and Fire TVs, Amazon advertised deals on “popular home and kitchen products from Casper and Ninja, toys from Melissa & Doug and Hasbro, beauty favorites from Drybar and Caudalie, and top fashion picks from Calvin Klein and Orolay jackets.” Amazon also released a curated list of Top 100 Deals, which included popular and gift items.
As with Prime Day, Amazon is tying the event in with its entire ecosystem. Influencers are hosting live shopping on Amazon Live. A new partnership between Amazon and Grubhub is yielding a discount code on meal orders. Badges are signifying small businesses and climate-friendly products.
At the 16-hour mark, market research tech firm Numerator released data on the event so far that showed essentials were just as much a reason people were buying as the holidays, if not more. The Numerator tracker is based on about 3,700 orders across roughly 2,100 unique households, and Numerator allows that it is “not guaranteed to be representative of the U.S. population.”
Here’s a look at what the firm learned as of 4 p.m. on Oct. 11, framed around key questions:
How much are consumers spending? Average order size was $44.37, Numerator reported. About two-fifths of households shopping the Early Access sale had placed two or more separate orders. This brought the average household spend to roughly $79.72.
Are consumers holiday shopping in October? The survey showed that 31% of shoppers purchased holiday gifts. Of those, 72% said they completed less than half of their holiday shopping. Many items sold for under $20, while 4% were sold for over $100. Meanwhile, 14% of shoppers said they purchased large ticket items they would've only bought on sale. Another 20% of the purchases were everyday goods shoppers would've bought anyway, 40% were items for households or themselves and 18% were gifts for non-holiday occasions.
What are they buying? Top items as of 4 p.m. on Tuesday included Amazon Gift Cards, Echo Dots, and Melissa & Doug toys. Top categories included household essentials, health and beauty and apparel and shoes.
What role is inflation playing? The country's current bout of 40-year-high inflation impacted 83% of Prime Early Access Sale shoppers, according to Numerator. This included 30% of shoppers who said they waited for the sale to purchase a specific item at a discounted price, while 24% passed on a good deal because it wasn't a necessity. As a result of inflation, 11% of individuals looked at prices outside of Amazon before buying.What we’re watching: Prime Early Access Sale arrives amid a host of early holiday sales events, including Walmart’s Rollbacks and More sale that is also taking place this week. Whether it is consumer behavior or total sales, the results of these events will set the tone for a holiday season in which online shopping is forecast to grow 2.5% over 2022. Yet the results so far indicate there is just as much enthusiasm for deals on every day purchases, as household essentials and smaller-ticket purchases are topping the results so far. This could end up looking more like another Prime Day than a holiday sale. The question is whether it drives the same level of participation as the summer event.
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Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”