Why Prime Day will create a ‘halo effect’ at other e-commerce giants
Amazon’s Prime Day (AMZN) is currently underway — and its impact is likely to benefit other e-commerce retailers as well given a strong start to the summer shopping season.
The two-day sale, scheduled to take place on Tuesday and Wednesday, will offer significant discounts on everything from everyday products like toothbrushes and deodorants to high-end items like blenders and noise-cancelling headphones.
Amazon shares are up about 1% on Tuesday but are up more than 50% year-to-date.
Alexandra Garfinkle of Yahoo Finance reports:
“Prime Day is always a big shopping event, but this year it will be a catalyst for early Christmas shopping as inflation and rising interest rates make consumers more cautious about their spending,” said Michael Greene, SVP of global vertical strategy at Criteo.
Amazon’s Prime Day created an ecosystem where consumers have big savings opportunities that they’re likely to take advantage of on Amazon — and elsewhere.
“Not only Amazon benefits from the summer shopping joy,” said Greene. “Other retailers have launched competing events — like Walmart+ Week and Target Circle Week — that have resulted in increased traffic and sales. That, in short, is the ‘halo’ effect of Prime Day.”
That means Prime Day has not only created an ecosystem where Amazon makes money, but also one where shopping happens at all e-commerce retailers.
“I expect Prime Day this year to drive adjacent sales at other retailers more than any other,” said Kevin Dunn, vice president of industry distribution, retail and consumer packaged goods at LiveRamp. “Retailers appear to believe consumer spending will continue to rise and reach record highs by the fall holiday season. Inflation doesn’t slow consumer spending, but it does make shoppers look for the best price. Smart retailers will benefit from this trend.” Bring consumers to their own sales events online and in-store. Some of these retailers have already had some of the most aggressive sales I’ve seen in a long time.
In 2022, Prime Day generated a record-breaking $12 billion in sales and customers bought more than 300 million items worldwide. Sale ends July 12th.
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