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What Really Happened on Prime Day?

Black Friday and Cyber Monday were once the undisputed reigning champions when it came to shopping holidays, but Amazon has been making a play for their market share for years with its own promotional event.

After the Covid crisis rocked the globe earlier this spring, the e-tailer pushed back its legendary Prime Day Sale from July to October, giving its overburdened warehouses and logistics arm time to streamline processes for a new influx of orders—and giving shoppers a reason to start holiday shopping early.

Shoppers flocked to the site in droves this past week, in spite of the three-month delay. Metrics from JP Morgan showed that Prime Day was forecasted to rack up a total of $7.5 billion in sales this year, a 42 percent increase from 2019, CNBC reported.

A lower proportion of products across the site were actually discounted during this year’s sale, likely because 2020 has already seen such a promotion-heavy retail landscape, according to fashion intelligence firm Edited. While the most widely promoted discount seen on the platform was 50 percent off, Edited noted that price gauging didn’t always resonate. In fact, the promotion that hooked shoppers most frequently was for just 10 percent to 20 percent off. And over the course of the two-day sale, just 30 percent of the products on the site were advertised on sale, compared to 46 percent in 2019.

While Prime Day often represents an optimal occasion for back-to-school shopping, 2020 served up different circumstances. With many kids still engaged in distanced learning, BTS sales were modest this fall. Dresses saw the highest proportion of discounts this October, as sellers attempted to move through goods that had piled up due to event cancellations throughout the year.

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A mass-casualization effect has also taken hold, with many shoppers working from home. Knowing that consumers still have an appetite for sleep and lounge wear, as well as tops suited for Zoom calls, sellers held back on discounting these categories. Instead, bottoms received heftier discounts, Edited found.

Other retailers sought to ride the Prime Day wave by offering their own discounts on Oct 13-14. Reebok gave shoppers 45 percent off site-wide with a discount code, while Macy’s and DSW offered a 30 price cut and Skechers advertised 25 percent off its casual footwear. Big-box Amazon competitors Walmart and Target both staged their own store-wide seasonal sales this week, with an array of deals on different products.

The biggest Prime Day winners were the small-to-medium-size businesses (SMBs), Amazon said on Thursday. The site’s legion of third-party sellers, which make up the bulk of the platform’s business, surpassed $3.5 billion in sales during the two-day promotional event—nearly 60 percent higher than in 2019. Amazon said Prime members saved more than $1.4 billion during the sale, with top categories including home, electronics and nutrition and wellness.

Still, Amazon’s post-sale press release failed to tout the event as its “biggest day ever,” claims it made from 2016 through 2019, Citi analyst Jason Bazinet noted, Barron’s reported last week.

This time around, Amazon simply called the sale “record-setting” for its independent sellers. Bazinet noted that Amazon India’s Prime Day took place in August, so the country’s numbers weren’t included in the tally of overall Prime Day sales this week.

Even though JP Morgan forecasted major sales growth, Bazinet, citing data from digital intelligence firm SimilarWeb, estimated that the e-tailer’s web traffic saw flat growth from 2019. Last year, Amazon’s Prime Day Sale saw 8 percent more traffic than it did the year prior. Meanwhile, on Monday Piper Sandler analyst Thomas Champion estimated that Amazon’s mega-event drew in $10.6 billion, a 49 percent year-over-year uptick, with unit sales estimated at 260 million versus 177 million in 2019, per Seeking Alpha.

New SimilarWeb data published Monday estimates that Prime Day purchases leapt 51 percent over last year, with Amazon’s private labels accounting for half of the top-selling products. “The strong showing of the retailer’s low-cost line of everyday clothing products and accessories on Prime Day is representative of Q3 performance, when purchases expanded 20 percent YoY, most regularly competing with popular clothing brands like Hanes, Fruit of the Loom and Gildan,” SimilarWeb vice president of solutions Greg Malen, noting Amazon Essentials’ 107 percent growth, wrote in a blog post.

Perhaps seeking to draw out the Prime Day fervor and increase traffic numbers, Amazon announced the launch of its “Holiday Dash Event,” with new, “Black-Friday worthy” deals just days after the massive promotion’s end. As of Friday, SMBs and top brands across the platform began offering fashion products, toys, electronics, home goods, beauty items, and kitchen supplies at deeply discounted rates, as shoppers continue to check loved ones off their lists.

According to Amazon, consumers will see discounts up to 30 percent on goods from many of its own private labels for kids and adults, like Amazon Essentials, Daily Ritual, GoodThreads and Amazon basics. Select apparel pieces from Calvin Klein, Levi’s, Tommy Hilfiger, and Shopbop will see 40 percent discounts, while New Balance, Lacoste and The Drop will provide up to 30 percent off clothes and shoes.

The online giant has also curated holiday gift guides for shoppers looking for tips on what to buy this season, including a fashion-specific list with hundreds of recommendations for men, women and kids. Shoppers can review the site’s best pajamas, for example, or curated selections of ultra-specific, trend-forward categories like belt bags.

Never wanting to be outdone, Walmart also announced a new program to “meet the evolving needs of its customers this holiday season,” giving them early access to promotional pricing on plenty of gifts. A revamped Black Friday savings event will give shoppers access to exclusive sales, both in store and online, with the option to leverage omnichannel services like curbside pickup.

Walmart’s “Black Friday Deals for Days” event will feature three consecutive weekends of sales beginning on Nov. 4, with new deals on different products unlocked each weekend. “We’ve been very thoughtful as we planned this year’s event,” said Scott McCall, executive vice president and chief merchandising officer for Walmart U.S. “By spreading deals out across multiple days and making our hottest deals available online, we expect the Black Friday experience in our stores will be safer and more manageable for both our customers and our associates.”

Walmart, like many brick-and-mortar-centric businesses, is aiming to push more of its sales online as concerns about the spread of the coronavirus continue. The trend toward e-commerce is accelerating tremendously across most of retail, with the uptick in online dependence showing no signs of slowing.

Just as its Black Friday deals took effect on Friday, Amazon announced plans to open two new fulfillment centers in Kansas, expected to launch in 2021 and employ 1,000 full-time workers. The facilities in Kansas City and Leavenworth will each offer one million square feet of space for the storage and fulfillment of large customer items like patio furniture, outdoor equipment and rugs. A new delivery station in Wichita is also on track to launch later this year. Alicia Boler Davis, Amazon’s vice president of global customer fulfillment, said the company will continue its growth and investment in the state to better serve customers in the region.

Additional reporting by Jessica Binns.