Why Amazon’s Prime Day is in July
A recent report from CNN has unveiled some fascinating details about New York City.
Amazon Prime Day has returned once again, commencing on Tuesday. However, selecting a couple of arbitrary days in July may seem perplexing. Therefore, let us delve into the reasoning behind Amazon's seemingly illogical choice to host potentially one of its most significant sales events in the midst of the summer.
Amazon organizes Prime Day in July annually to boost sales figures during traditionally sluggish summer months. Additionally, it assists Amazon in promoting an early kickoff to the back-to-school and college shopping season, as stated by JPMorgan analyst Doug Anmuth.
Amazon (AMZN) experimented with its first-ever Prime Day in July 2015 to commemorate the company's 20th birthday. The intention was to create a day that resembled Black Friday for Amazon (AMZN) enthusiasts, but with even more discounts than the traditional November shopping tradition. Amazon (AMZN) proudly declared in a statement announcing the sale, "Move over Black Friday - say hello to Prime Day."
According to Coresight Research, Amazon achieved a sales total of $900 million during its inaugural Prime Day. Having recognized its immense success, the company decided to reintroduce the event for a second year, offering even more enticing deals. Coresight's estimation suggests that sales escalated to a remarkable $1.5 billion.
Afterward, Amazon incorporated an additional day to the sales event. Bank of America foresees that Prime Day might amass approximately $12 billion in earnings this year, experiencing a 12% increase from the previous year.
According to analysts, Prime Day constitutes just a small fraction, approximately 1% to 2%, of Amazon's yearly sales. Nevertheless, Amazon leverages this sale event to cultivate loyalty amongst its Prime subscribers and encourage new customers to join the program.
Prime Day assists Amazon in attracting fresh participants to Amazon Prime, its annual fee-based service that includes complimentary shipping and reinforces pre-existing customer connections with the corporation's goods and enterprises, such as Whole Foods. Historically, the vast majority of Amazon's offerings on Prime Day have been restricted to Prime members.
This upcoming Prime Day marks the premiere of Amazon's upgraded delivery system.
Amazon has typically run a single domestic delivery system that dispatched orders from various warehouses situated throughout the nation. For instance, if a customer in Detroit ordered a product that was not available in the local warehouse, Amazon would send it from a different location in the country. However, this year, the company has established eight regions in smaller geographical areas with the goal of transporting products over shorter distances.
The alterations might have an effect on the items that customers come across while browsing for products on Amazon's online platform. As per Amazon, products that are in close proximity to customers will have a higher placement on the results pages.
Amazon is also encountering heightened competition this year from Target (TGT), Walmart (WMT), Best Buy (BBY), and various other retailers who are offering discounts that align with Prime Day.
The promotion is additionally commencing as internet prices decline.
According to Adobe Analytics' Adobe Digital Price Index, the prices of online products dropped by 2.6% in June compared to the previous year. This decrease is the most notable one since May 2020.
In June, Adobe recorded a decline in prices for the tenth month in a row compared to the same period last year. More than half of the categories tracked by Adobe experienced a decrease in prices.
The costs of electronics, computers, and household devices remained notably reduced. On the other hand, grocery items experienced a rise in prices, albeit at a decelerating pace.
