Amazon Prime Day Eyes Consumers' Shifting Shopping Habits

After nine years of Amazon hosting its Prime Day retail holiday, the question is not just what it means for holiday shopping in 2023, but also what it means for the shopping calendar in the years that follow. Originally meant to tout Amazon Prime memberships and sell Amazon-branded electronics and other items, the now two-day event featured the biggest sales day in Amazon history on its first day in 2023. It sold 375 million items worldwide on both days combined, with Amazon estimating customers saved more than $2.5 billion with sales. According to data analytics firm Numerator, the average order size rose from $52.26 last year to $54.05 this year. With 65% of households placing two or more orders on Prime Day, average household spending hit $155.67. With inflation and other economic factors still a concern, Numerator found that only 32% of Prime Day shoppers bought items they’d typically purchase on Amazon. Another 34% went for timed Lightning Deals, 43% focused on general Prime Day deals and 52% held out for items they were waiting to see on sale. That might foreshadow consumer behavior for the 2023 holiday season, but continued inflation has made it a calendar-wide phenomenon for much of this year. Vivek Pandya, manager of Adobe Digital Insights, noted that an inflationary environment has left consumers looking for relief across all categories, with Amazon offering solutions beyond Prime Day's earliest tech-tailored offerings and competitors encroaching on Amazon's "Prime" real estate with sales of their own. “What Prime Day amounted to was really indicative of what we were seeing coming out Presidents Day weekend, Memorial Day weekend, even July Fourth—consumers being very strategic in how they buy in this type of environment, where they're trying to maximize value and get their dollar to stretch further,” Pandya said. “They might be holding back a little bit, waiting for those discounts, then after a Prime Day, they pull back.” Everybody’s day As a result, the way Amazon’s competitors react to Prime Day has shifted as well. This year, Walmart countered with Walmart+ Week sales tied to its own loyalty program. Target, meanwhile, held sales on Prime Day in years past but launched its loyalty-focused Circle Week this year. Other retailers including Best Buy and Newegg also held sales around Prime Day—with Newegg's FantasTech sale entering its ninth year. Consumers treated all of it as they’d treat the period from Black Friday through Cyber Monday. According to Numerator, 54% say they still compared Amazon's prices to those other retailers before shopping on Prime Day. Of those, 36% compared to Walmart and 25% to Target. They aren’t particularly loyal, either, as 34% of Prime Day shoppers said they either had or would shop Target Circle Week. Another 33% said the same about Walmart+ Week, with just 37% proving Prime Day loyalists. “These other retailers are also very open to creating new offers for buyers during these two days,” said Fernando Angulo, senior market research manager at online visibility platform Semrush. ”They have been doing great in terms of traffic acquisition.” They’re also targeting Prime Day's potential weak point: logistics. Angulo noted issues in Amazon’s supply chain this year in Germany and his home country of Spain, where only 18 of his 55 orders arrived on time. According to Adobe, competing retailers also used curbside pickup for 20% of online orders on Prime Day, up from 19% last year, to circumvent delivery issues. Amazon-agnostic Amazon is shifting its strategies too. While a Fire TV Stick with Alexa Voice Remote was still the day’s best-selling product, Amazon offered big deals on decidedly non-Amazon items. Laneige Lip Glowy Balm, Apple AirPods and Bissell Little Green Portable Carpet Cleaner ranked among the day’s top purchases. Amazon pushed the spotlight to small businesses including Caraway, True Classic and Tushy, increasing their average daily sales on the first day of Prime Day more than 18 times any other day in 2023. It focused on policies like “try before you buy” and installment payments, with Adobe pointing out that delayed payment accounted for 6.5% of orders and $927 million in sales across Prime Day—up 20% from last year. In total, Adobe Analytics put 2023 Prime Day sales at $12.7 billion, up 6.1% from last year, largely because Amazon’s taking the entire calendar into account. Adobe found that apparel sales surged 17% on Prime Day and stationery/office supply sales jumped 76% as Amazon used its July 11-12 sales to focus on back-to-school shoppers. “The first early Prime Days were Amazon-focused and electronics/gadgetry-focused,” Pandya said. “Now we see discounts across different categories that include back-to-school items. Given that consumers are thinking about back-to-school in August, July is a good enough time for them to take advantage of the deals.” Sources: Adobe Analytics and Numerator This story is part of Adweek’s Beyond the Transaction special feature, which spotlights the people and strategies driving business growth and brand awareness.