Amazon just held its second annual October Prime Day sale, dubbed Big Deal Days. The sale unofficially kicks off the ecommerce holiday spending season, with competing events from Walmart, Target, Costco and other major retailers.
Amazon ranks No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database. It ranks the 100 largest such marketplaces by 2023 third-party GMV.
October sales can cannibalize holiday spending
Big Deal Days pull forward some consumer spending that would otherwise have waited until later in the season, says Neil Saunders, managing director at retail analysis firm Global Data. Some consumers also hold off on purchases and wait for the sale, he said.
45% of consumers said they bought products they’d been waiting to purchase on sale in a survey of 917 Amazon shoppers from consumer market research firm Numerator.
Because consumers plan other seasonal shopping with this sales event in mind, “it doesn’t necessarily increase sales enormously,” Saunders says. “I think because you’re offering discounts, you can get people to buy a little bit more on impulse. Perhaps they divert spending from other areas like travel, entertainment or eating out,” he says.
Many of the purchases made during the sale would still have happened without the sale, just at a later date.
Not all Big Deal Days shoppers plan to make purchases during the major shopping holidays coming up. 58% said they plan to shop on Black Friday, and 57% said they will shop on Cyber Monday, according to Numerator’s survey.
28% of consumers said they purchased holiday gifts during the sale, flat with the percentage from 2022’s Early Access sale. In both 2023 and 2022, 30% of shoppers told Numerator they completed at least half of their holiday shopping during the October sale.
Holiday spending starts earlier
Holiday spending was already moving up earlier in the year, and Amazon’s addition of a second Prime Day solidified the trend. 38% of shoppers planned to start holiday shopping as early as September in 2023, a 25% increase from 2022, according a study from shopping app LTK. LTK conducted the holiday survey on June 30, 2023, with 1,136 of consumers identified as Gen Z and Millennials.
Sales and holiday-themed marketing events, such as Big Deal Days, push consumers to start shopping earlier in the season, says Kasi Socha, analyst at retail data research company Gartner. Consumers are trending toward shopping for holidays all year long, she says, and Gartner predicts 30% of consumers will shop for winter holiday gifts year-round by 2026.
“I do think that these earlier offers have made the holiday season a bit more complex in terms of shopping because it does put a dilemma on consumers as to whether to buy now, or to try and wait until later in the hope that the discounts might be deeper,” Saunders says.
Consumers are also more selective on spending discretionary income thanks to inflation and price increases, so they’re not necessarily jumping on any type of discount. Spreading out holiday purchases over a longer period can make them fit into a budget more easily.
“They have particular things that they want to buy; they have particular price points,” Saunders says.
Consumers are looking for sales on products that they’re already planning to buy in the holiday season. 60% of items purchased through Amazon sold for under $20 as of 1 p.m. ET, according to Numerator. Just 4% of purchases were more than $100.
Competing retailers like Walmart might not see huge gains from early holiday spending
Amazon’s competitors historically hold competing events with the retail giant’s prime sales. Walmart, for example, held its Holiday Kickoff sale during the same time period as Big Deal Days, and did not limit it just to Walmart+ members. In July, the first Walmart+ Week coincided with Amazon Prime Day in July. Both retailers held online sales across different categories of merchandise. Target held a comparable Circle Week the first week of October, and Costco held Member Savings Days.
“While there may be a little bit of loss of market share from other retailers to Amazon, I feel that the big guys like Walmart and Target can certainly hold their own in this, and they’re pulling out the stops to take share from others in the market,” Saunders says.
Some retailers may see incremental gains in market share, but there are unlikely to be large changes, he added.
One-third of Amazon shoppers said they also plan to shop Walmart’s sale, and 27% said they’d made purchases during Target Circle Week, according to Numerator’s survey.
For Amazon, though, sales so far are well ahead of last October’s Prime Early Access Sale, Numerator analyst Amanda Schoenbauer says.
“Even if the event doesn’t top Prime Day highs, it still appears to be a highly lucrative sale for Amazon that we expect to see again in the future,” she says.
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