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Amazon Might Host Second Prime Day This Year

Although Amazon recently moved Prime Day back to July for the first time in three years, the e-commerce giant might have room for another digital doorbuster in the fall.

Reports suggest Amazon is planning a new event called “Prime Fall Deal Event,” according to Business Insider. The Seattle firm recently began notifying select third-party sellers about Prime Fall through its internal Seller Central portal.

An Amazon representative declined to comment.

According to the Insider report, Amazon is asking sellers to submit special promotion deals, called Lightning Deals, by July 22. Another message to sellers had a deadline of Sept. 2. Those using Amazon’s fulfillment service reportedly have to ship their products by Sept. 12.

Participating sellers must offer a discount of at least 20 percent off their current prices to join the Prime Fall event, the report said. All promotions must match or beat the lowest price since Jan. 1, one of the messages said, and all products must have a 3-star or higher rating.

The exact date of the event is still unclear, but Insider said it appears to be scheduled for October, while a CNBC report wasn’t more specific than saying it would be held in the fourth quarter. Last year, Amazon held a separate beauty product sales event in October to get customers spending ahead of the holiday shopping season.

Amazon held Prime Day in July every year from its inception in 2015, when it was just a one-day event, all the way through 2019. When the Covid-19 pandemic struck in 2020, the tech titan moved the shopping spree to October, spurring retailers to similarly push their holiday planning a month earlier. Last year, the event was brought back to the summer when Amazon staged it in June.

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Mike Scheschuk, chief marketing officer of Jungle Scout, a platform that provides e-commerce data insights to Amazon sellers, said last year in a company report that the idea of hosting a second Prime Day in the fall wasn’t out of the question. Scheschuk even suggested that Prime Day “could eventually become a quarterly event,” if a second Prime Day proved to be successful.

Steve Rowen, managing partner at Retail Systems Research, shared a similar sentiment, telling Sourcing Journal that he believes this could be the start of multiple Prime Day events per year.

“Why not one a season?” Rowen asked. “I can actually envision a day when this becomes monthly.”

Rowen noted that a potential expansion of Prime Day reminded him of the period after Amazon bought Whole Foods, when the company incentivized Prime members to download the Whole Foods app and link their Amazon accounts with special deals. Many of these deals faded over time, with Rowen suggesting that the integration later became more focused on collecting user data.

For Prime Day, “the question is what happens to the quality of the deals when the frequency increases,” Rowen said. “The more often it happens, the less special it will become, and the less reason sentient people will pay attention to it. That doesn’t mean it won’t be vastly successful in the meantime.”

Amazon could be looking to reignite business after it reported a $3.8 billion first-quarter net loss. While the loss itself is attributed largely to its ownership of Rivian Automotive, which has seen its valuation plummet amid this year’s market selloff, Amazon’s total first-quarter sales growth was tepid.

The e-commerce giant generated $116.4 billion in net sales, a 7 percent jump in the fourth quarter and the slowest quarterly growth rate for the company since 2001. What’s more, Amazon’s online retail segment saw a 3 percent sales decline to $51.1 billion.

“After a lackluster first quarter performance, Amazon is keen to boost demand,” said Neil Saunders, managing director, retail at GlobalData. “Having two Prime selling events may help to accomplish that. The rationale behind a fall event is probably to assist Amazon in securing some early holiday spending before other retailers have a chance to take share. It will also help Amazon to spread some of the holiday demand which is critical if it is to avoid a big capacity crunch around the holiday season.”

Hosting another Prime Day-level event in the fourth quarter could have a similar impact as it did in 2020, when other retailers reacted by showering consumers with their own offers. The influence of Prime Day clearly caught on with retail leaders Walmart and Target, both of which launched competing events as a result of Amazon’s success.

But Saunders cautioned that Prime Day 2.0 “will likely only pull forward sales rather than generating loads of new demand,” citing consumers’ limited budgets this year amid economic uncertainty and searing inflation.

While 88 percent of more than 1,000 Prime members surveyed by Tinuiti in May say they plan to shop on Prime Day this year, 63 percent said product price inflation will discourage them from making some purchases during the big sale. This may not bode well for a fourth-quarter event, particularly if recession fears come to fruition and consumers tighten their wallets.

Sucharita Kodali, vice president and principal analyst at Forrester Research, told Sourcing Journal she’d “suspect” a fourth-quarter Prime Day event “may have the same impact this year that it did in 2020,” but said it’s “hard to tell what will happen” based on factors including inflation, an glut of merchandise crowding warehouses and midterm elections later this year.

The Insider report hinted that some Amazon sellers may not be thrilled about the lack of details related to the event. Tom Baker, the founder of Fordebaker, a marketing and operations agency for Amazon merchants, told the publication that sellers are feeling they have to make significant budgeting and inventory decisions on whether to participate despite not having much information to go on.

Meanwhile, Amazon is battling increased labor and fulfillment costs that have rapidly risen since the start of the Covid-19 pandemic. In total, operating expenses reached nearly $445 billion in 2021, a 22.5 percent increase from the year before.

And amid an influx of unionization drives across the U.S., including a victory for employees at one Staten Island distribution center, the company might have to shell out more in wages. Morgan Stanley analysts estimated that Amazon’s 2023 operating expenses could jump by $203 million if the company increases the starting wage of the New York facility’s employees from $18 to $29 an hour.

With that in mind, a second Prime Day could simply mean Amazon is looking for more outlets to drive sales as expenses jump through the roof. Amazon introduced a 5 percent surcharge for some of its U.S. sellers in April, the first such fee in its history. And most notable on the consumer end, Amazon boosted the price of its annual U.S. Prime membership for the first time in four years, to $139 from $119.