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Despite $11B Haul, Why Prime Day Growth Stalled to Lowest Ever

Although Prime Day 2021 may have brought in the biggest haul for third-party sellers in Amazon’s history, it appears the two-day shopping event might be starting to lose its luster.

Despite generating approximately $11.2 billion in gross merchandise value (GMV) during Prime Day, the growth significantly slowed compared to recent years to just 7.7 percent, according to data from Digital Commerce 360—nearly six times lower than growth seen last year, when locked-down consumers flocked to the web for the lion’s share of their shopping needs. This would be the smallest sales growth in the history of the shopping event, which Amazon launched in 2015.

While Prime members in 20 countries purchased more than 250 million products across June 21-22, Amazon said, it appears the emphasis on spending isn’t as pronounced as it used to be. Another study from Numerator that collected data from more than 30,000 orders found that average spend per order declined 18 percent to $44.75 from $54.64 during Prime Day 2020. For those who shopped Prime Day 2020, 32 percent said they spent more in 2021, and 33 percent said they spent less.

The 7.7 percent growth number pales in comparison from the GMV increase recorded in 2020, when Prime Day moved to October for the first time due to the Covid-19 pandemic. Last year, Amazon Prime Day sales amounted to $10.4 billion, a massive 45 percent increase from $7.16 billion in 2019. The event essentially kicked off the holiday season, pulling sales forward into October and further constraining on fulfillment centers and the overall supply chain.

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Even with a big leap in 2020, Prime Day’s growth paled in comparison to the two years prior. Both the 2019 and 2018 shopping extravaganzas saw a 71 percent total sales increase and a 74 percent jump, respectively. Amazon’s growth peak in 2018 might have incentivized the e-commerce giant to expand the event to two days in 2019.

Prime Day’s deceleration also comes as more competitors across retail have implemented their own versions of the event, even looking to get ahead of it by scheduling promotions a day earlier. Walmart’s Deals for Days and Target’s Deal Days are two of the biggest sales events created to compete after Amazon expanded Prime Day to 48 hours, and the events only got bigger once the shift to October was set in stone.

Fifty-three percent of Prime Day shoppers only considered Amazon for their purchases, while 47 percent considered other retailers and 19 percent compared prices before making their purchase.

That’s not to say Prime Day wasn’t an enormous sales driver this year. Amazon chief financial officer Brian Olsavsky revealed in an earnings call that Prime Day contributed 400 basis points (4 percentage points) to the e-commerce giant’s year-over-year revenue increase. Olsavsky, light on the event’s details, said his team was “really pleased” with the results.

One analyst on the call asked if the event is still a “once-per-year phenomenon” or if Amazon would consider multiple events to capitalize on seasonal trends, but Olsavsky said he didn’t have any news to announce at that time.

Amazon itself did not disclose how much was sold during the 2021 event, only revealing that third-party sellers surpassed 2020 totals of $3.5 billion. With such a focus on small businesses, Amazon is looking to continue growing the third-party sellers on its marketplace, committing $18 billion over the past year in various forms of assistance in logistics, services, programs, customer support and Prime Day assistance. Across the second quarter, third-party orders represented 56 percent of Amazon’s total paid units, up from 53 percent one year ago.

Although Amazon’s director of investor relations Dave Fildes referred to the influx of third-party sellers as a “20-year progression” in the earnings call, the Covid-19 pandemic definitely accelerated the process. As more shoppers opted to buy online when stores closed, a crush of sellers sought to open new sales channels.

A report from Marketplace Pulse showed that in 2020, nearly 1.3 million new sellers joined Amazon’s marketplace worldwide. Nearly 14 percent of them signed up through Amazon.com in the United States. The highest number of new third-party sellers in the U.S. was recorded in April when “stay-at-home” measures were imposed in several states.

Statistics show that Amazon.in contributed 12.1 percent of new marketplace sellers. Amazon.nl and Amazon.co.uk followed with 8.5 percent and 8.2 percent share, respectively.