Amazon’s Prime Day: How to Invent an American Holiday

By: James Flippin · July 12, 2023 · Reading Time: 3 minutes

Something for Main Street and Wall Street

Born from the spirit of Alibaba’s (BABA) Singles Day sale — a colossal shopping event that sweeps China every year — Amazon (AMZN) crafted its own novel summer sales event in 2015. Enter, Prime Day.

Consumer spending typically cools down when summer heats up, so Amazon launched Prime Day to keep the digital cash registers ringing. Now, Prime Day isn’t just an event. This modern American holiday is something that Main Street and Wall Street eagerly await — for deals and discounts, for sales statistics that partially dictate Amazon’s share price, and to paint a picture of overall retail spending and consumer sentiment.

Since its start, Prime Day has successfully conquered the summer shopping calendar. It’s found a place in the retail rhythm of American life, which has provided something for shoppers and investors alike.

Prime Numbers

As a brief refresher, last year Amazon’s Prime Day sales pushed past the $7 billion mark, according to Insider Intelligence. The ecommerce giant is expected to surpass that milestone this summer.

Projections for 2023 suggest sales could nudge past $8 billion, which would be a new sales record. The sales event is bolstered in part by the swelling number of Amazon Prime account holders, which is now hovering around 175 million. For context, that’s roughly two-thirds of the US population.

These figures underscore Prime Day’s incredible growth trajectory and Amazon’s influence in the retail sector, something Wall Street watches closely. This one company created a new holiday during the down season that now rivals the likes of Black Friday and Cyber Monday.

Ripple Effect for the Sector

As a testament to its influence, the ripple effects of Prime Day have extended well beyond Amazon. What began as a sales-boosting event for its own business has turned into an annual retail spectacle. It’s pushed other large and small companies, including Walmart (WMT) and Target (TGT), to follow suit.

As Prime Day morphs into an industry-wide phenomenon, it creates a cornucopia of opportunities for consumers. FExpert tips for shoppers looking to reap the most benefits include utilizing the right credit card for bonus rewards, price matching with rival stores, and hunting for exclusive/invite-only deals.

For investors, the annual sales event offers a glimpse into not only the state of Amazon and the retail sector at large, but also purchasing power and consumer sentiment. Analysts will be watching where total sales ultimately land amid higher than average inflation. They’ll be watching which categories outperform, and using these data points to make predictions about consumer spending.

Zooming out, this new American holiday has become something that both Main Street and Wall Street watch entering into the second half of the year.

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