What Amazon Prime Day Data Could Tell Retailers About 2023 Holiday Shopping

The U.S. e-commerce market is expected to reach nearly $1.2 trillion in sales this year. Amazon, the largest online retailer in the world, contributed significantly to those projected sales with this week’s Prime Day shopping event. According to Adobe Analytics data, over the course of July 11 and 12, online shoppers spent $12.7 billion with Amazon, marking 6.1% year-over-year growth indicating a growing trend in consumer spending and setting a record for Prime Day. Amazon does not typically provide sales data from Prime Day. However, in this case it did say that July 11 was the biggest sales day in the company’s history. It also said July 11 was its independent retailers’ biggest Prime Day on record.

In this post, I’ll look at some of the early figures and trends from this week’s Prime Day, retailers’ (and bargain hunters’) response to the massive e-commerce event and what it all could mean for this year’s holiday retail sales.

Inflation-weary shoppers lured by deep discounts and exclusive perks

During Prime Day, Amazon offered discounts across various product categories. Electronics showed the most substantial reductions at around 14% off listed prices. Apparel and toys followed closely behind, each averaging a 12% discount. Additionally, 9% off was reported for home and furniture items (although I saw steeper discounts on some items), while the computer category saw an 8% reduction. Appliances, sporting goods and TVs had more moderate deals, ranging from 5% to 7% off their original prices.

These attractive discounts likely contributed to the significant increase in consumer spending during the Prime Day event. According to data firm Numerator, the average Prime Day spend per order rose to $56.64 from $53.14 a year ago. Early data also shows that nearly two-thirds of households shopping on Prime Day placed two or more separate orders, bringing the average household spend to $155.67.

This year, U.S.-based Prime members received early access to some deals starting from June 21. Amazon also introduced invitation-only deals, allowing customers to request an invite to shop for items expected to sell out quickly. Additionally, from June 29 to July 26, Prime members who are approved for a Prime Visa card are eligible for a $200 Amazon gift card. This incentive is not exclusive to Prime Day, as the company offers it periodically throughout the year. Still, the company’s timing of the current offer around Prime Day shows another tactic to lure customers in with even more savings incentives.

Competing retailers take advantage of prime shopping time

According to the Numerator data, 52% of Prime Day shoppers say they purchased items they’d been holding off on buying until they were on sale. However, the proliferation of discount-finding apps such as Honey, Rakuten and CapitalOne Shopping helps shoppers find the best deals regardless of which e-commerce site someone patronizes.

Shoppers are now conditioned to compare deals from various retailers during Prime Day week, which leads to rising competition for Amazon. Prime Day has created a halo effect with rival retailers, including Walmart, Target and Best Buy, each offering significant discounts during specific periods. This week, for instance, Walmart took advantage of the bargain-hunting awareness created by Prime Day to lure more customers to its Walmart+ subscription program by offering a 50% discount on annual membership sign-ups.

Buy now pay later surged during Prime Day

Consumers used buy now pay later (BNPL) payment options in 6.5% of orders during Prime Days, totaling $927 million in revenue—up 20% YoY. BNPL usage continues to be most popular for apparel, furniture/home decor and electronics category purchases.

“For months, consumers have felt the effects of persistent inflation and an uncertain economic environment, and it has pushed shoppers to embrace more flexible ways to manage their spending around the Prime Day event,” said lead analyst Vivek Pandya of Adobe Digital Insights in a statement. “The revenue growth attributed to buy now pay later is a preview of what we can expect in the months ahead, especially as we near the holiday shopping season.”

In a high-interest-rate environment, consumers seeking to manage their cash flow over the holidays may regard BNPL installment loans with zero interest as a more favorable choice than high-interest credit cards. Recent research suggests that BNPL payments in the U.S. will grow 19.0% to reach $113 million by the end of 2023.

For more of my analysis of the forces at play in BNPL, check out my articles on early BNPL players and Apple’s recent introduction of its Apple Pay Later payment option.

A prime barometer for holiday and rest-of-year sales

According to Insider Intelligence, consumer spending will continue to rise into the 2023 holiday season. Inflation is not slowing down consumer spending, but rather has led shoppers to search for the best prices. Large savings events from retailers like Amazon, Target, BestBuy and others will likely lead to adjacent sales for other retailers who seize the opportunity to attract consumers to their own sales events, both online and in-store.

Discount events such as Prime Day impact supply chain planning by influencing demand forecasting, inventory management, supplier coordination, logistics and distribution and returns. By effectively managing these aspects, retailers can optimize their operations, meet customer demands and capitalize on the opportunities presented in peak shopping periods. With appropriate planning, optimizing for these discount periods should cut costs for retailers, allowing them to come out ahead even while offering lower prices to consumers.

It’s unclear whether Amazon will hold an additional Prime Day event this year, as it did in October 2022. Regardless, I expect Black Friday won’t be the only significant savings opportunity for deal seekers this 2023 holiday season and, with the right strategy, retailers of all sizes will benefit from these offerings.

You can watch additional analysis of Adobe Data on Amazon Prime Day from Patrick Moorhead, CEO and chief analyst at Moor Insights & Strategy, and Daniel Newman, CEO of The Futurum Group, here on the Six-Five Podcast.

Moor Insights & Strategy provides or has provided paid services to technology companies like all research and tech industry analyst firms. These services include research, analysis, advising, consulting, benchmarking, acquisition matchmaking, and video and speaking sponsorships. The company has had or currently has paid business relationships with 8×8, Accenture, A10 Networks, Advanced Micro Devices, Amazon, Amazon Web Services, Ambient Scientific, Ampere Computing, Anuta Networks, Applied Brain Research, Applied Micro, Apstra, Arm, Aruba Networks (now HPE), Atom Computing, AT&T, Aura, Automation Anywhere, AWS, A-10 Strategies, Bitfusion, Blaize, Box, Broadcom, C3.AI, Calix, Cadence Systems, Campfire, Cisco Systems, Clear Software, Cloudera, Clumio, Cohesity, Cognitive Systems, CompuCom, Cradlepoint, CyberArk, Dell, Dell EMC, Dell Technologies, Diablo Technologies, Dialogue Group, Digital Optics, Dreamium Labs, D-Wave, Echelon, Ericsson, Extreme Networks, Five9, Flex, Foundries.io, Foxconn, Frame (now VMware), Fujitsu, Gen Z Consortium, Glue Networks, GlobalFoundries, Revolve (now Google), Google Cloud, Graphcore, Groq, Hiregenics, Hotwire Global, HP Inc., Hewlett Packard Enterprise, Honeywell, Huawei Technologies, HYCU, IBM, Infinidat, Infoblox, Infosys, Inseego, IonQ,  IonVR, Inseego, Infosys, Infiot, Intel, Interdigital, Jabil Circuit, Juniper Networks, Keysight, Konica Minolta, Lattice Semiconductor, Lenovo,  Linux Foundation, Lightbits Labs, LogicMonitor, LoRa Alliance, Luminar, MapBox, Marvell Technology, Mavenir, Marseille Inc, Mayfair Equity, Meraki (Cisco), Merck KGaA, Mesophere, Micron Technology, Microsoft, MiTEL, Mojo Networks, MongoDB, Multefire Alliance, National Instruments, Neat, NetApp, Nightwatch, NOKIA, Nortek, Novumind, NVIDIA, Nutanix, Nuvia (now Qualcomm), NXP, onsemi, ONUG, OpenStack Foundation, Oracle, Palo Alto Networks, Panasas, Peraso, Pexip, Pixelworks, Plume Design, PlusAI, Poly (formerly Plantronics), Portworx, Pure Storage, Qualcomm, Quantinuum, Rackspace, Rambus, Rayvolt E-Bikes, Red Hat, Renesas, Residio, Samsung Electronics, Samsung Semi, SAP, SAS, Scale Computing, Schneider Electric, SiFive, Silver Peak (now Aruba-HPE), SkyWorks, SONY Optical Storage, Splunk, Springpath (now Cisco), Spirent, Splunk, Sprint (now T-Mobile), Stratus Technologies, Symantec, Synaptics, Syniverse, Synopsys, Tanium, Telesign,TE Connectivity, TensTorrent, Tobii Technology, Teradata,T-Mobile, Treasure Data, Twitter, Unity Technologies, UiPath, Verizon Communications, VAST Data, Ventana Micro Systems, Vidyo, VMware, Wave Computing, Wellsmith, Xilinx, Zayo, Zebra, Zededa, Zendesk, Zoho, Zoom, and Zscaler. Moor Insights & Strategy founder, CEO, and Chief Analyst Patrick Moorhead is an investor in dMY Technology Group Inc. VI, Fivestone Partners, Frore Systems, Groq, MemryX, Movandi, and Ventana Micro.