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Amazon.com Inc.’s two-day Prime Day sale kicked off Tuesday and is expected to give the world’s largest e-commerce company an early edge over traditional rivals still competing with pandemic-scared consumers that they distrust fighting blacks. Friday crowds.
With Prime Day pushed back to October from July this year, Amazon alone could bring forward the pivotal holiday season – a long-predicted “Christmas chill.” More than three in four consumers plan to shop earlier this year than a year ago, and a third cites health and safety concerns, according to a survey by the International Council of Shopping Centers released Friday. Meanwhile, a Harris poll conducted with Bloomberg found that nearly half of consumers plan to make most or all of their purchases on the web.
It’s a winning combination for Amazon and many of the merchants offering deals on the site. Perch, who sells women’s leggings, VR goggles and a range of other products in different categories, said some popular items were going two to three times faster than in 2019. Perch will make money from the event, even after doubling his advertising budget, as Amazon is drawing so many shoppers to the site, CEO Chris Bell said.
“The only question now is how much of this is going to cannibalize the traditional Cyber Five hit,” he said, referring to the five-day period that begins on Thanksgiving and marks the peak of Christmas spending.
Amazon has been preparing for a record vacation. Earlier this year, it hired more than 175,000 people for its extensive network of fulfillment centers after a surge in online ordering briefly overwhelmed the company. Amazon reported record earnings last quarter, and investors have jumped the shares 85% this year, giving the company a market value of about $ 1.7 trillion. The shares rose about 1% on Tuesday afternoon in New York.
“Holiday spending will continue to shift from physical to online stores, and Amazon is very well aligned with those trends,” said Andrew Lipsman, an analyst at eMarketer Inc. who expects online spend of nearly $ 10 billion over the two days. period, with over $ 6 billion spent on Amazon.
The average Prime Day purchase so far is about $ 45, and 40% of home shoppers have already placed two orders, according to Numerator, which tracks purchases online. There were 136,372 tweets about Prime Day at 1 p.m. New York time, with 36% positive, 12% negative, and about half neutral, according to Sprout Social, which monitors consumer sentiment on social media.
Designed for convenience, Amazon’s delivery machine now offers the added benefit of security compared to in-store purchases. That means the company could continue to deliver double-digit sales growth despite a weak job market and Congress stalling over other stimulus packages like the $ 600 weekly unemployment assistance that expired this summer.
Senior members who didn’t lose their jobs might actually have a bit more to spend and feel the need to splurge, as most households have cut travel, meals away from home and other expenses, said Jack Kleinhenz, economist. head of the National Retail Federation.
“People might be more confident buying a little more and thinking, ‘Oh, I owe it to myself at a difficult time,'” he said.
Amazon’s competitors who still earn most of their income from stores must balance creating business with protecting public health. Eight out of 10 shoppers say they are concerned that crowded stores could spread Covid-19, which means that retailers that don’t offer online deals could lose out.
The industry has been trying to convince consumers to spend earlier for weeks. Executives at American Eagle Outfitters Inc. and Kohl’s Corp. said they expect an earlier lawsuit. Veteran retailer Deborah Weinswig got two dozen retailers to start a new shopping holiday, “10.10”, to address capacity issues and encourage shoppers to buy earlier. Target Corp. and Walmart Inc. also launched their promotional days this week.
The latter last month started its own delivery service, Walmart +, and Target is shipping packages from its stores. But Amazon has 118 million Prime members in the US, according to Consumer Intelligence Research Partners, subscribers to whom the company remains loyal with delivery discounts and other benefits. Amazon launched Prime Day in 2015 as a day of deals to attract new subscribers and hold on to existing ones. Prime members spend more on the site than non-members.
For years, retailers have tried to get shoppers to distribute their purchases over the holidays by offering deals early and often. The phenomenon was dubbed “Christmas creep” and it never fully materialized because many shoppers procrastinate, waiting for Black Friday and Thanksgiving deals before getting serious about gift shopping. Analysts say the pandemic has finally made the “Christmas chill” come true because shoppers worry that items will be out of stock and they will receive online orders on time.
“Amazon Prime Day will kick off the holiday season and holiday shopping for many consumers,” said Chip Bergh, CEO of Levi Strauss & Co. “We are aware of capacity constraints with shipping due to the increase in e-commerce, so that consumers will be urged to buy early. “
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