Retailers just ended their July 4 promotions, and now they are gearing up for a summer Black Friday of sorts, now that Amazon Prime Day has changed the promotional cadence.
This year’s promotions could be more impactful on retailers’ second-quarter results, particularly since Amazon has elected to stretch its epic deals over 48 hours. Already, many retailers complained of a slow start to the May through July quarter, so the coming sales could prove key—though they may still fall short.
Earlier this week Wells Fargo analyst Ike Boruchow cited inventory issues as a factor that could also impact second-quarter results. As Boruchow noted, “it’s too late to salvage” the quarter, and added that there’s probably still too much inventory left that needs to be cleared out to make way for fall and back-to-school (BTS) merchandise.
As a caveat, for some retailers Prime Day marks the unofficial start of the back-to-school shopping season, according to data from native advertising platform Cardlytics. The company said new data shows Prime is “reshaping consumer spend, pushing [BTS] much earlier in the season.”
From 2017 to 2018, total BTS spend grew 2.5 percent, while purely e-commerce retailers like Amazon emerged as the fastest-growing channel, growing by nearly 19 percent year-over-year, according to Cardlytics. General and multi-line retailers like Amazon, Walmart and Target accounted for nearly 75 percent of all BTS spend in 2018.
Who’s selling
In fact, many retailers have already started their promotions to get a jump on Prime Day, although with July 4th sales just ended, it’s difficult to distinguish what may have really been pre-Prime Day sales.
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Macy’s is competing by giving consumers a head start to Prime Day, offering daily flash sale specials. The promotions end on July 14, right ahead of Amazon Prime Day’s July 15 start. Some promotions carry a hefty discount, like a flash sale for 65 percent off its Hotel Collection Bedding Basics, and another for 50 percent off Charter Club.
Other sales on select items run through the promotional period, such as women’s swim options at 60 percent off. There was also a select group of footwear options at 50 percent off, and men’s dress shirts, normally at $45, starting at $9.99. Dresses were listed on the Macy’s website as starting at $19.99, such as a Karen Scott floral-print short-sleeve dress, representing a 55 percent discount from its regular price of $44.50. Consumers could also opt into the Macy’s “savings stackup” for an extra up to 25 percent off existing sales with a promotion code.
On Monday, the same day Amazon starts its Prime Day event, men’s performance lifestyle brand Rhone will hold its annual “Lime Day,” a loyalty sale offering 15 off site-wide.
Walmart plans to unveil thousands of special buys and rollbacks on pricing also starting on the Sunday before Prime Day, with the range of offers running through Wednesday, in what it’s calling a “Summer Savings” event. Select items, such as for an Apple Watch Series 3 at $80 off and a 6-quart Instant Pot Lux 60 at $40 off, are already marked down. And Walmart has a deal with Amazon competitor Google to see the latter’s smart home devices as part of its pre-Prime Day offers. While toys and electronics are typically the top picks at the discounter, special offers will include the apparel and home categories.
Target has its Deal Days planned for Monday and Tuesday, right in line with Amazon’s Prime sales. The discounter said last month that the Deal Days are its “biggest sale of the summer.”
“Last year’s Target.com One-Day sale was one of our biggest days of the year for online sales,” Mark Tritton, Target’s executive vice president and chief merchandising officer, said at the time. This year’s offers, he said, include “more discounts across even more of our assortment with two days to save on hundreds of thousands of items and offering the best options in retail for delivery and pick up on their terms, including same-day.”
And this year a new entrant is eBay, which last month said it would hold a “Crash Sale” on Monday July 15. The Crash Sale is touted as its “hottest deals” during the prime summer shopping season, and taking a jab at last year’s occurrences, the company promised “even better deals if Amazon crashes again.”
Amazon’s site crashed in 2018 shortly after the start of Prime Day because it failed to have enough servers to handle the influx of traffic on the site. While eBay’s main Crash selling day is Monday, it actually began kicking off the event on July 1 with a series of July 4 promotions, and includes sales dubbed “Hot Deals for Hot Days” that run throughout July. Shoppers will find deals on “the things they actually want, from top electronics and home items, to the latest fashion, sporting goods, and more,” eBay said.
Nordstrom is planning its two-week annual summer event, its Anniversary Sale, on Friday July 19. While it isn’t officially competing with Prime Day, Nordstrom card holders do get early access to the sale beginning on Friday, July 12, according to the retailer’s website.
And on Friday, the reorganized Sears said it will hold its “Midsummer Madness” on sears.com, starting on Sunday and running through Tuesday, July 15. Deals include an extra 25 percent off on apparel and shoe purchases of $50 or more, with a promotional code.
“From appliances and apparel to tools, sporting goods and jewelry, our special prices will delight our customers,” Peter Lai, chief online officer for Sears and Kmart, said. Shop Your Way members can also access the integrated retail service options that allow them to buy online and pickup in-store.
Retail outlook
Apparel is still a big draw for retailers hoping to clear out inventory, whether for BTS or not. According to a report on retail data platform Edited, which tracked sales at U.S. retailers on Prime Day, the average discount percentage for men’s, women’s and children’s products rose to 42.5 percent last year from 39 percent in 2017.
“More products are selling out as retailers are deepening discounts,” the report noted. “Retailers are focused on discount depth over breadth of products to move through older stock to compete with Prime Day.”