July 11 (Reuters) – Amazon.com ( AMZN.O ) hopes to tempt U.S. shoppers on Tuesday to open inflation-thinned wallets by offering deeper discounts on a wide range of goods and services during this year’s “Prime Day” 48-hour shopping spree event, including its first-ever travel discounts.
A year of inflation has lifted mortgage rates, rents and food prices for consumers ahead of Prime Day, which falls on 11-12. July this year.
CFRA Research analyst Arun Sundaram said Amazon’s US Prime Day discounts this year are generally deeper than in previous years. The online retailer is marking 60% off Gap ( GPS.N ) clothing, 50% off Sony headphones and 40% off Peloton ( PTON.O ) exercise bikes, according to Bank of America.
Amazon Prime members can also save up to 40% on items like Sherpani Bags and ZOA Energy Drinks, by checking out using “Buy with Prime,” directly from Amazon’s third-party merchants.
Last year, U.S. online sales during Amazon’s Prime Day shopping event reached nearly $12 billion, up 8.5% from the previous year, as inflation-stricken Americans pounced on discounted essentials and electronics, according to Adobe, which tracks online spending.
Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, said Amazon Prime sales growth will be slower this year as many US consumers still have post-pandemic shopping fatigue and are wary of “abusing their wallets”.
They “want to spend more on experiences, travel and entertainment,” Schulman added. Running Point Capital Advisors has exposure to Amazon through, among other things, Exchange Traded Funds (ETFs).
He predicted that Prime Day 2023 could add about $4 billion to $6 billion of incremental revenue for Amazon, up 10% to 16% from last year, as shoppers also take advantage of discounts on everyday staples like pantry items, toiletries and cleaning materials.
Criteo’s ( CRTO.O ) Global Chief Revenue Officer Brian Gleason said such discounts could appeal more to customers in a tougher economy.
Amazon is also offering its first-ever Prime Day travel discounts this year, partnering with travel booking site Priceline to offer an additional 20% off Priceline’s Hotel Express offer, which offers 60% off hotels.
Prime Day is expected to face stiff competition from other retailers such as Walmart ( WMT.N ) which offers extensive deals during its “Plus Week.” For Walmart+ members, Plus Week began on Monday.
Home electronics chain Best Buy is also giving out more discounts through the “Black Friday in July” savings event, which also started on Monday.
“This week has turned into quite a big shopping event, similar to Black Friday and Cyber Monday,” Sundaram said, adding that all retailers are fighting for market share.
Bank of America estimates that this year’s Prime Day sales event will generate $12 billion in gross merchandise value (GMV) for Amazon in the US, up 12% year over year.
Amazon is planning another Prime sales event this year, according to screenshots of the seller notification platform seen by Reuters. The company has notified its marketplace providers to submit deals for a “Prime Fall Deal Event” starting in the fourth quarter. The exact date was unclear, and Amazon had no comment on the fall event. Last year’s sale was on 11 and 12 October.
Reporting by Granth Vanaik and Ananya Mariam Rajesh in Bengaluru. Additional reporting by Arriana McLymore in New York City; Editing by David Gregorio
Our standards: Thomson Reuters Trust Principles.