Amazon's Prime Day Accelerates Shift to Online Shopping
By Sebastian Herrera
Amazon.com Inc.'s Prime Day sales event propelled consumers to
spend billions more online this week, kicking off an end-of-year
shopping season that is expected to be dominated by e-commerce
Overall spending on Amazon's site increased by 36% in the U.S.
during the two-day event compared with Prime Day last year,
according to research firm Edison Trends, though that was lower
than the 42% increase the company saw in 2019. Before the event,
research firm eMarketer projected that Amazon's total U.S. Prime
Day sales would reach $6.17 billion.
Amazon didn't disclose detailed financial figures for the event,
but the company said third-party businesses on its platform sold
more than $3.5 billion during the event, a nearly 60% increase from
last year. An iRobot Roomba vacuum and Kids Against Maturity card
game were among the bestselling items in the U.S.
Away from Amazon, online sales also grew significantly, rising
76% in the U.S. on Tuesday compared with the first day of Prime Day
in 2019, according to Digital Commerce 360 and Salesforce.com Inc.
Retailers this year have seen a huge uptick in consumer spending
online as millions of Americans stayed home for work and school and
avoided in-person shopping due to the coronavirus pandemic.
Amazon postponed the event after struggling to meet a surge in
online ordering at the outset of the pandemic. The shift away from
summer and closer to Black Friday, the day after Thanksgiving when
many retailers hold major sales, may have dampened some spending,
analysts said. Spending per household on Amazon's site during the
event fell about 28% from last year, according to initial research
from Numerator, a firm that tracks receipt data.
Amazon is leading a pack of major retailers in showing how
online spending will play a greater role than ever these holidays,
especially for the most dominant companies, as the overall retail
picture during the shopping season remains shaky. Many retailers
plan to close stores on Thanksgiving and are offering Black Friday
deals online during November and December to reduce crowds.
Amazon's e-commerce market share decreased by roughly 1.5
percentage points during Prime Day when compared with last year,
according to Edison, with Walmart Inc., Target Corp. and Best Buy
Co. gaining a small share. All three joined other major retailers
in holding competing sales during Prime Day. Edison and other
data-analysis firms reached their conclusions by analyzing hundreds
of thousands of U.S. transactions.
Customers have indicated that they plan to continue purchasing
most of their items online as the holidays approach. More than half
of consumers say they are primarily shopping online for the
holidays, more than double last year, according to a survey by
Numerator of more than 2,000 shoppers.
"What's different this year is that you have more people
shopping online, and Prime Day has now created that retail
promotion period, so it is elongating the shopping season," said
Andrew Lipsman, an analyst with eMarketer. "The pie has gotten
bigger this year in terms of e-commerce."
Few companies have benefited more than Amazon. It has made
record profits this year and is projected to increase sales to
$111.8 billion in the fourth quarter, according to analysts polled
by FactSet. That would be almost $25 billion more than the
company's record fourth quarter in 2019.
While Prime Day has been lucrative for Amazon, it still only
represents a very small share of overall holiday shopping. Total
U.S. retail revenue for the holiday season last year was more than
$1 trillion. Total U.S. e-commerce sales during the holidays this
year will rise 35% to about $190 billion, more than double the
growth rate of the year before, eMarketer said. Analysts said they
don't believe the early start to holiday shopping will ultimately
Even as Amazon has pushed the start of holiday shopping earlier,
retail analysts still expect a large dose of shopping to happen
around Black Friday, the usual period when retailers start their
end-of-year sales. A recent survey of about 3,500 U.S. shoppers by
research firm The NPD Group Inc. showed that 14% of consumers
planned to start their holiday shopping on Black Friday, down from
17% last year.
Amazon's sales event was also marked by employee activism around
the country, including an online petition targeting Amazon's
productivity expectations for warehouse workers and a protest at
its facility in Shakopee, Minn. Amazon workers have previously used
Prime Day as an opportunity to air grievances with the company.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com
(END) Dow Jones Newswires
October 17, 2020 07:07 ET (11:07 GMT)
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