According to reports, consumers ready to buy "bargain" may find that Amazon's Prime Day promotion this year is not impressive because of the current cost of soaring. , many sellers are trying to minimize discounts. This year's Prime Day sale kicks off on Tuesday and Wednesday, a summer clearance sale designed to make room for new items during the Christmas shopping season. This year, Amazon is doing its best to keep consumers interested.
Amazon said it will offer "millions of great deals" this year, including the lowest prices ever on its iconic products. For example, an Alexa-based Echo Dot smart speaker costs just $17.99, and a 50-inch Amazon Fire TV costs $99.99.
"Amazon is well aware that it needs to ramp up discounts on its iconic products to grab attention," said Kristin McGrath, a shopping expert at deal-tracking site BlackFriday.com.
Amazon launched its Prime Day sale in 2015 to attract interest from Prime members who paid $139 a year. The number of Amazon Prime members stagnated at about 172 million as of June 30 this year, unchanged from six months ago, according to Consumer Intelligence Research Partners. That suggests Amazon's $20 price hike for its Prime subscription, announced in February, has put consumers off.
This year is also a merchant on Amazon.com, being very stingy when it comes to discounts for the second year in a row. Prime Day is primarily seen as an opportunity to clear aging inventory, said Tim Seward, principal at e-commerce consultancy ROI Revolution. About 60% of Seward's 160 customers will offer discounts, but not much.
"Many brands are discounting less than they were in 2021 due to higher costs," Seward said. "However, it's still a good opportunity to clear inventory."
Shoppers will still spend on Prime Day. Research firm eMarketer expects U.S. and global consumers to spend $7.76 billion and $12.52 billion, respectively, on Amazon during the two-day sale, an increase of about 17 percent from a year earlier.
Analyst Andrew Lipsman said consumers were flocking to Amazon for deals on some household staples, despite the impact of higher gasoline prices and inflation. "Consumers still have money and are looking for deals, which should give Prime Day some boost," Lipsman said.
At the same time, Amazon has to contend with stiff competition from rivals such as Walmart and Target. On Prime Day, shoppers are used to hopping from site to site in search of the best deals, and Amazon's previous top spot has faded.
Some brands, which once tripled their usual Prime Day sales this year, are expected to drop to about double their usual levels this year, according to Chris Bauserman, chief marketing officer (CMO) at e-commerce software company CommerceIQ..
Still, Bowserman said: "It's still a can't-miss event. It's just slowing down."
Chad Rubin, founder, and CEO of ProFasee, which sells pricing software, said many Amazon merchants opted out of the Prime Day sale to protect their profits. They thought it would be too costly to offer deep discounts on this cluttered site and then pay higher advertising fees.
"A lot of our customers aren't participating. They want to protect profits," Rubin said.