This week saw “Black Friday in July.” That’s right, it was Prime Day… which is actually two days. The Amazon-invented holiday offers deep discounts on a range of products, causing many consumers to go on mid-summer shopping sprees. This jolts an otherwise slow season before back-to-school arrives.
And consumers showed up this year. According to preliminary data from Adobe Analytics, the two-day stretch that comprises Prime Day brought in an estimated $14.2 billion in spending. This is an 11 percent increase from last year’s $12.7 billion total. Given a weak economy, this growth is notable.
Keep in mind that these are estimates from Adobe Analytics, rather than first-party sales data from Amazon… which it doesn’t release. But Amazon did confirm that Prime Day 2024 did indeed break records. Adobe Analytics’ data are also directionally-relevant given consistent methodology each year.
Build vs. Buy
Breaking down the figures further, Amazon shoppers spent $7.2 billion on day one of the sale (July 16th), which is up 11.2 percent from last year. Day-2 spending (July 17th) then reached a slightly-lower $7 billion which is a 10.4 percent jump from last year. This marks a fairly even distribution across days.
So what were people buying? Electronics, furniture, and back-to-school items led the list. Back-to-school shopping could represent people getting a jump on necessary spending that they know is on the horizon, but timing those purchases strategically, knowing they can save now (more on that in a bit).
As for furniture, this aligns with other trends we’re tracking, such as mortgage rates. More people are putting money towards upgrading their homes as opposed to moving (at least those with the financial means to be in this boat to begin with), as high mortgage rates cuff them to their existing homes.
Notably, about half of Prime Day shopping happened via smartphones. This is up 18 percent from last year, a sizable jump that doesn’t have a definitive explanation. The average order value (AOV) was meanwhile $57.97, compared with the past two years’ AOVs of $56.64 and $53.14, respectively.
Double-Edged Sword
Back to the part about a weak economy, this has proved to be a double-edged sword in eCommerce in the past few years. For example, as we examined during Cyber Week (the period spanning Black Friday to Cyber Monday), sales broke new records. However, that cannibalized other holiday spending.
Put another way, consumers are price-sensitive in a macro-environment characterized by high inflation and other factors. So they don’t hold off from spending altogether… but rather selectively reserve their spending for sales. They’re less inclined to pay full price and more inclined to wait for known sales.
The bottom line effect for retailers and e-tailers is greater revenue during scheduled sales… but equal or lower spending levels in the aggregate. Again, that was the case over the past few Black Fridays, but it’s unclear if that will end up being the story for Prime Day’s impact on aggregate summer spending.
Those pros and cons are specifically in reference to Amazon. As for others, such as SMBs, it’s almost all downside. They either lose business to Amazon’s deep discounting, or they’re forced to match prices and decimate margins. This isn’t a new phenomenon but is amplified with every Amazon super sale.
