How Would a Delayed Prime Day Impact Retail?

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How Would a Delayed Prime Day Impact Retail?

By Thad Rueter - 05/22/2020
Amazon reportedly will move the annual event to September
Fulfillment is key to Amazon Prime Day success.

The COVID-19 outbreak reportedly will force a delay for Amazon’s annual Prime Day online commerce push — a move that promises to impact hundreds of other retailers and the holiday season.

Prime Day 2020 reportedly will take place in September. Last year, Prime Day took place on July 15 and brought in more than $7 billion in sales. Prime Day launched in 2015.

Amazon isn’t talking about any delay this year, not yet, and typically offers customers and competitors little advance notice on when the sales holiday will take place. The most recent word about the delay comes from a report in the Wall Street Journal. It said that the largest online retailer in the U.S. has “decided to hold its annual Prime Day event in September, according to people familiar with the matter. The two-day sales event, which features deeply discounted merchandise, has typically been held in July. But strains on the company’s warehouses due to surging demand caused Amazon to postpone the event, the people said.”

As is the case with food retailers and some other merchants, Amazon’s sales have soared during the pandemic. Everything comes with a price, though, and that revenue boost, according to the Wall Street Journal, has also meant increased focus on keeping ahead of all that new consumer demand.

Prime Day — named, of course, after Amazon’s members-only shipping program, among the main gateways into the company’s vast ecosystem — would certainly lose its luster should products ordered during that marketing event take too long to get into consumers’ hands. “Amazon.com is inching toward a return to normal operations as the company struggles to fulfill unprecedented demand because of the coronavirus, upending operations and shipping speeds that customers had grown used to,” the Wall Street Journal said in explaining the reported delay.

School Shopping

The move to September promises to influence holiday shopping plans for many consumers, especially those struggling with loss of income and seeking to make their holiday dollars stretch further. That comes at a cost to consumers as well, as having Prime Day in July enabled many shoppers to make progress on their back-to-school shopping lists. Indeed, from the point of view of Amazon and various retail observers, Prime Day has come to serve as the starting gun for the back-to-school shopping season. Last year, U.S. shoppers on average spent $507 on back-to-school supplies, according to RetailMeNot.

As well, the reported move to September would also force Amazon’s retail competitors to rethink some of their own promotional events designed as what amounts to Prime Day counter-programming. In recent years, Prime Day has sparked the growth of other discount and free-shipping shopping offers from an increasing pool of retail competitors, who also often showcase any new online or mobile commerce initiatives.

According to RetailMeNot, in fact, more than 300 retailers last year offered their own promotions to counter Prime Day and take advantage of the shopping mindset Amazon’s event encourages. Prime Day, actually, is not so much a day as a week of discounts and marketing promotions, and the influence is widely felt. According to the latest RetailMeNot deep dive into Prime Day, 84% of retailers consider Prime Week as the most important driver of online back-to-school sale. Not only that, but the average parent who shops during Prime Week aims to visit 11 retailers during that period, another sign demonstrating that whatever Amazon does usually impacts other areas of the broader retail world.

It seems almost like ancient history now, but the reason Amazon created Prime Day was to boost revenues during the summer, when shopping tends to dial down. Now Prime Day stands pretty much as its own ecosystem within the larger universe of Amazon.

Retailers certainly have enough on their plates now as they deal with the immediate problems brought about by the pandemic, and as they shift more of their focus to the 2020 holiday season. If Prime Day does indeed move to September this year, that’s another wild card for retailers in this already wild year — but that move could also offer another chance at successful retail improvisation for some merchants.

Amazon is No. 2 on The PG 100, Progressive Grocer's 2020 list of the top food retailers in North America