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The e-tailer plans to delay its flagship shopping event, which has previously taken place in July, until at least August, Reuters reports. This is likely a response to the coronavirus pandemic, which has caused Amazon to prioritize delivering essential goods at the expense of nonessential orders, leading to long delivery times in some cases. Amazon may feel it can’t successfully conduct Prime Day while the pandemic is impacting consumers’ needs and potentially lowering their spending.
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Putting off the event to buy time for consumer spending and its delivery capacity to improve could help Amazon maximize Prime Day’s performance this year — but the pandemic may still damage its results. By holding Prime Day later, Amazon can potentially wait for consumer spending to pick back up to some degree if the effects of the pandemic lessen.
The delay also gives Amazon more time to strengthen its delivery capabilities so it can ship Prime subscribers nonessential products in one or two days as it has in the past, which could help it avoid losing some sales. Still, Amazon thinks it might take a $100 million hit because it may have to sell devices in its inventory at a discount.
Because of this, and the potential for the pandemic to continue to suppress consumer spending, Prime Day 2020’s sales may take a step back from 2019, when both days of the event brought in over $2 billion in online sales, according to data from Adobe Analytics sent to Business Insider Intelligence. This could mean that Prime Day 2020 will fail to become the largest shopping event in Amazon history, something Prime Day has accomplished for several years in a row.
Delaying Prime Day should impact the e-commerce industry overall by forcing retailers that compete with the event to adjust their strategies and postponing holiday shopping.
Retailers that try to go head-to-head with Prime Day will need to adjust their strategies to compete with the event whenever it occurs. Merchants including eBay, Target, and Walmart held their own sales events on and around Prime Day in an effort to steal sales and capitalize on the increase in shopping activity.
But these retailers may not be able to manufacture this kind of activity without Prime Day. This would mean that any plans they had to attract consumers and bring in revenue during the event in July will probably need to be put off too, potentially further altering their revenue expectations in an already complicated year.
Holiday shopping may start later in 2020 because many consumers have made early holiday purchases on Prime Day in the past, possibly creating a more concentrated sales season. Seventy percent of shoppers’ purchases on Prime Day 2019 included a holiday gift, according to a survey from RetailMeNot.
This means that many consumers’ holiday shopping was spread out over several months — but with Prime Day coming later in the year, it could mean more consumers get a later start on holiday shopping, making the last few months of the year even more important to retailers’ overall performances.
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