Will the late Prime Day sabotage or catapult holiday spending?

Photo: Amazon
Sep 01, 2020

Amazon.com’s Prime Day, which traditionally takes place in July, is expected this year to land in October, possibly jumpstarting or rivaling holiday campaigns.

Indeed, Prime Day may be more popular than key dates during the Christmas selling season. Coresight Research’s weekly survey of U.S. consumers on the coronavirus fallout from August 12 found one-third expecting to buy on Prime Day, well above the one-quarter expecting to buy on Cyber Monday and 16 percent on Black Friday.

Amazon’s sales from the 48-hour Prime Day in July 2019 exceeded its Black Friday and Cyber Monday events combined.

Prime Day, which offers exclusive deals for Prime members, was delayed this year due to challenges Amazon has had filling orders due to the coronavirus crisis.

On its fourth-quarter conference call on July 30, Amazon said the event would take place sometime in the fourth quarter. The week of October 5th is reportedly a “placeholder date,” according to an email sent to third-party sellers obtained by CNBC.

Further COVID-19 outbreaks could push Prime Day into November which could cannibalize holiday sales to a greater degree. Peter Kearns, former Amazon executive and VP of partnerships at Buy Box Experts, told Fox Business that holding Prime Day in early fall would help Amazon “spread out consumer buying” and also “lessen the impact on associates around the holidays.”

In recent years, Amazon’s competitors also took advantage of the hoopla over Prime Day. A YouGov poll last year found Walmart, Target, eBay, Best Buy and Macy’s among the biggest beneficiaries from running special deals on the same dates.

In an article on Forbes.com from Kiri Masters, CEO, Bobsled Marketing, and a RetailWire Braintrust panelist, said she found that some sellers are seeking to avoid investing in Prime Day this year because it’s too close to their holiday plans. However, she believes the event will still offer opportunities to drive sales, acquire new customers and test strategies in a challenging year.

Ms. Masters wrote, “With the risks and unknowns all weighed and considered, the brands who push forward and invest in Prime Day are likely to see a good return — especially if their competitors are sitting this one out.”

DISCUSSION QUESTIONS: How disruptive might Prime Day be to holiday selling, and what difference would an early October vs. November date make? Would you encourage other retailers to run major campaigns around Prime Day or focus on traditional holiday campaigns?

Please practice The RetailWire Golden Rule when submitting your comments.
"My advice to retailers: jump on an October Prime Day bandwagon as soon as possible."
"Let’s not forget the other major event impacting holiday selling … the US Presidential election."
"My theory is that consumer budget constraints will lead to earlier, more strategic holiday spending."

Join the Discussion!

21 Comments on "Will the late Prime Day sabotage or catapult holiday spending?"

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Bob Amster

I tend to think in terms of pent-up demand and availability of disposable income. Whether Prime Day is held in July or October, if consumers want to buy and have the money, they will buy. Big competitors to Amazon are not going to let this event go unmatched. The challenge will be to order the right goods in time for whenever the events take place.

Richard Hernandez
Richard Hernandez
Director, Main Street Markets
1 year 1 month ago

Bob is correct – this will depend on the disposable income of families or how confident they feel to spend their money. Regardless, Amazon will have company from other retailers – you don’t know what will happen and no one likes to get left out when the sale is what matters.

Neil Saunders

I don’t think Prime Day will provide a major boost to holiday spending. However I do think it will distort and elongate the trading calendar. Essentially, it will mean the golden quarter becomes one big promotion fest starting in October. While all the deals and discounts may take their toll on margins, a longer holiday season is actually a plus. It will allow retailers to more easily manage the surge in digital demand which would otherwise put enormous pressure on fulfillment operations.

Nikki Baird

Historically, retailers have not been able to get consumers to think about holiday any sooner than, say November 15th. Holding a big event like Prime Day in November is really just promoting at a time when people are already starting to think about spending.

I think most important for this holiday season is going to be capacity. Parcel shipping capacity, and retailer fulfillment capacity. We still can’t run DC’s (or stores, for that matter) at full capacity. Which means getting consumers to spread out their spending beyond the usual concentrated holiday season is going to be critical.

My advice to retailers: jump on an October Prime Day bandwagon as soon as possible. Not just to make sure Amazon doesn’t dominate the mindshare of consumers, but also to make sure that you can spread holiday demand over a wider period – simply so that you have the ability to fulfill it all.

Bethany Allee

What Nikki said. That’s an excellent point about having time to fulfill when supply chains still see disruption. Retailers must capitalize on the momentum Prime Day creates – whether it’s in October or November.

Amazon currently dictates what’s happening in retail, now they’re dictating holidays.

Raj B. Shroff

I think the closer Prime Day gets to the beginning of the holiday selling season, the more disruptive it will be. Although a friend sent me a picture from his Costco and they had Christmas trees out two weeks ago so I wonder if there are “seasons” anymore.

I would encourage other retailers to think through their categories and overlap with holiday purchases. Figure out where they can/can’t play, where they can/can’t win and run campaigns accordingly.

At the same time, front loading campaigns to be earlier in the season might alleviate the high likelihood of product availability, supply chain and delivery challenges closer to December.

Jeff Sward

An October Prime Day creates the opportunity for many retailers to have a better than would otherwise be expected holiday season. The more sales in the bank the earlier is key. Malls are going to be difficult at best to shop during peak holiday weeks. And think of the surge FedEx, USPS and UPS are going to experience. And all bets are off if another COVID-19 outbreak hits. So happy Halloween — uhmm, Merry Christmas — oh heck — happy holidays!

Stephen Rector

If a family has a set amount of disposable income for holiday shopping, the addition of Prime Day in October or early November just gives another option to spend. For other retailers, if they don’t mirror an event at the same time, they will lose out on an opportunity to sell their merchandise.

I think consumers will react positively to having another sale event to get holiday shopping done sooner vs. later.

This actually could be a blessing in disguise for all retail as there may be less pressure at the very end to fulfill last minute purchases as the spending was done earlier in the season.

Mark Price
Mark Price
Managing Partner, Smart Data Solutions, ThreeBridge
1 year 1 month ago

In a normal year, we could discuss whether or not Amazon would be able to actually shift the holiday season forward with the sheer magnitude of their reach and the loyalty of their Prime customers. This year, I think the greatest factor will be whether or not Congress passes the extra financial support legislation, and when. If an extra $600 per week appears in consumers’ accounts, then I do think Amazon will drive the season earlier. If not, then I think that consumers will hang on and wait for better deals and for the money to arrive.

Gene Detroyer

The one absolute is that there is a finite amount of money to spend in the consumer’s hands. They will spend what they can spend on the holiday season no matter if the holiday season stretches on for four or five months or is consolidated into two or three months.

I’d encourage retailers to watch their margins. You may steal some business from a competitor, but you are not going to expand the market.

Lisa Goller

Holding Prime Day in Q4 will give Amazon a bigger share of overall retail holiday sales. Yet 2020 sales will be lower than 2019’s total. As a result, a Q4 date would be positive for Amazon and consumers, and negative for rivals.

Amazon’s stealth and ambiguous timing makes it hard for rivals to plan simultaneous sales events to compete on Prime Day. This edge means Prime Day 2020 could resemble a global sales extravaganza like Alibaba’s Singles Day by focusing on Amazon as it jumpstarts holiday spending.

Since March, Amazon has refined supply chain processes and gathered more consumer data to improve Prime Day’s top line performance. The e-commerce giant will reach more consumers in Q4 than its usual July timeline, especially if there are new fall lockdowns.

Overall consumers will gain more choice, more competitive offers and a better chance of receiving items before the holidays.

Ken Cassar

Four factors will make this a holiday season like none before: 1.) Prime Day in October; 2.) the likelihood that Black Friday will not be the in-store shopping event that it has historically been; 3.) the likelihood that gift givers will see fewer of their gift recipients in person this year, and; 4) supply will be dodgy.

Throw out everything you know about holiday shopping, this one is without precedent. Walmart, Target and Amazon will set records this year. For everyone else, success this season will be driven by each retailer’s ability to adapt quickly during an unpredictable fourth quarter.

Rich Kizer

It is true that it all hinges on disposable income. But in huge part it also rests on emotion and I think Prime Day is Round 1. It will only fire up consumers, and Round 2 will come up in November.

Kathleen Fischer

This is an unprecedented year so it is difficult to predict how consumers will spend this holiday season, however overall spending is likely to be down. With a Prime Day so close to the holiday season, Amazon may be set up well to get a jump on consumers’ dollars over other retailers if they decide to utilize traditional timing for their holiday campaigns.

Oliver Guy

It could well have a beneficial impact for others by bringing forward holiday spending for all. 2020 has been a difficult year for many and it could be a diversion for some people.
The term “revenge spending” was a new one for me this year and some may feel they are seeking to start thinking about Christmas earlier than usual.

Brett Busconi

October vs. November might yield some additional buys for Amazon – if they hold the event in November it might automatically slot some buyers for holiday purchases vs. Prime Day deal/impulse purchases.

If Prime Day is held in October, I think it makes sense for others to plan around it — the big ones will do so regardless of date. If it is in November, I guess the holiday push just starts earlier for competitors. We thought the holiday push would start earlier this year, anyway.

Jasmine Glasheen

My theory is that consumer budget constraints will lead to earlier, more strategic holiday spending. Families that suddenly find themselves in the low-income bracket as a result of the pandemic will spend more time planning purchases for their loved ones.

We’re talking less impulse purchasing and more (online) coupon clipping. The most important move for Amazon and other heavy-hitters is to start planning their holiday promotions early, make them significant, and make sure that customers have time to plan for them.

Peter Charness

With all the uncertainty, and the complete rearrangement of the normal seasonal shopping curve, go early and go deep. All those people home working and browsing the web while no one can see what’s on their screen … home office themes will be big!

Shelley E. Kohan

Let’s not forget the other major event impacting holiday selling … the US Presidential election. A change in the White House may make consumers tighten up the purse strings while no change in the white house may erupt in more social divide.

Prime Day will be monstrous this year with pent up demand, so all retailers should be on notice. Too early and it may miss the holiday selling opportunity, too late and it may be a loss based on the results of the election. I would say early November would be a better bet to balance out demand and supply chain capacity. Also, most consumers over-spend on holiday versus non-holiday.

October is too early. All Retailers should ABSOLUTELY join the bandwagon, as Nikki says.

William Passodelis

I think that there are two camps right now: people who are hurting and NOT doing well, and people who are not doing badly. That group I believe is feeling pent up frustration and I believe those people have money to spend, and I think they will spend on Prime Day. This might be about an early start to holiday season needs and gifts, but I believe will also be things for themselves. I believe that others will capitalize on Prime Day with their own specials — as they should capitalize on this event — as it is becoming tradition.

Casey Craig

This year’s holiday season will be tough for retailers and cash-strapped consumers alike. Retailers absolutely should be looking for new ways to provide quality savings and discounts to shoppers throughout the holiday season, including offering additional deals around Prime Day. Amazon’s exceptional performance this year shows that retail customers appreciate the convenience, flexibility, and safety of the online shopping experience.

An October date for offering Prime Day deals should be excellent timing for kick-starting the holiday season without overcrowding November and December with deals. This year gives retailers the opportunity to establish a strong and consumer-friendly online presence, and providing enticing online deals in early October is a perfect way to do that.

"My advice to retailers: jump on an October Prime Day bandwagon as soon as possible."
"Let’s not forget the other major event impacting holiday selling … the US Presidential election."
"My theory is that consumer budget constraints will lead to earlier, more strategic holiday spending."

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