In an effort to recapture lost market share and lure back consumers disappointed with a lackluster assortment and lagging deliveries, Amazon is staging a blowout sale at the end of the month.
News of the potential for a large-scale promotional event first broke last week when the New York Times revealed details from an internal Amazon meeting. Now, according to a document reviewed by CNBC, the company is telling sellers to gear up for a “Fashion Summer Sale Event” on June 22, featuring products from brands large and small.
According to the correspondence, only invited sellers can participate in the sale, which is expected to run anywhere from 7-10 days. The company has asked sellers to discount items by at least 30 percent for the duration of the event.
“We are having the Biggest Summer Sale event to drive excitement and jump-start sales,” the note read. “To drive customer engagement, we are asking for your participation.” The company confirmed the event to the news outlet, adding that while it hasn’t yet been named, the internal working title is “The Biggest Sale in the Sky.”
While this news from the online giant will undoubtedly drum up intrigue, the timing could indicate that Amazon is contending with some anxieties over its recent performance.
At the height of coronavirus panic buying, household goods and cleaning supplies, among other essential items, were sold out for weeks. Orders have also faced significant delays of a week or more, causing widespread disappointment among the company’s Prime members who are accustomed to items arriving on their doorsteps in a matter of 1-2 days.
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The logistical failings got so out of hand that the company decided in April to postpone July’s highly anticipated Prime Day sale to September.
In light of these recent hiccups and the announcement of a new summer blowout, some industry insiders are dubious about the company’s ability to make good on its promises, despite Amazon’s longstanding supply-chain prowess and reinvigorated commitment to insider-approved fashion.
Asaf Hachmon, CEO of last-mile delivery startup Bond, believes that the attempt to recoup losses and bring shoppers back into the fold could backfire from an operational standpoint.
“I think it’s a very opportunistic move,” he said of the promotion. “The main motivation around this is to retrieve as much money as possible—and then handle the logistics.”
Hachmon said it’s problematic for a company to push off post-purchase responsibilities in favor of drumming up dollars. Based on the company’s recent performance, he believes that Amazon will be unable to keep up with fulfilling the influx of new orders generated by a sale of such magnitude.
“From what we’re seeing in the market and with our own direct-to-consumer brands’ efforts, I strongly believe that the outcome of such a summer sale could increase delivery times from 7-10 days to 24-30 days,” he said.
Customers are not willing to wait that long, he added, especially when Amazon has primed them (pun intended) to expect speedy, efficient service.
“It may cause a lot of damage to Amazon’s reputation for reliability,” he said. That’s an especially tough pill to swallow in the age of COVID-19, when widespread retail shutdowns have forced shoppers to rely primarily on online channels.
In light of this reality, consumer priorities have also shifted, he said. Shoppers have come to value accuracy and expediency above almost any other brand experience. Amazon once embodied those values, but recent issues have undermined consumer trust.
“I believe a move like this may be covering up something else,” Hachmon said of the planned sale. It could be born of a desperate need to move inventory and appease sellers whose stores on the platform have seen sharp declines since the pandemic hit.
The company is also likely anxious about competitors like Walmart and Target, with their massive store footprints and equally huge assortments, gaining more market share.
And, amid the chaos, shoppers have been forced to confront the ethics of supporting Amazon when workers in the company’s country-wide warehouses have pleaded for safer, more sanitary working conditions as their colleagues fell ill, and sometimes died, around them.
“I don’t think that what got them here can take them any further,” Hachmon said of the company’s rise to dominance through its sophisticated logistics infrastructure. “Of course they’re still Amazon, and they dominate the market, but having said that, users in these times are becoming a bit more aware, and a bit more conscious of how they’re spending their money.
“I think this is only the beginning of a much larger trend,” he added.