Amazon’s Prime Day is Two Weeks Away
Amazon Could See a Record-Breaking Q4
Amazon’s (AMZN) Prime Day usually gives the company a boost during the summer, a season when sales tend to be low. This year, however, Amazon decided to postpone Prime Day until the fall because the company was overwhelmed dealing with the pandemic-induced spike in demand for its services during the spring and summer.
Amazon confirmed yesterday that the shopping extravaganza will take place October 13 and October 14 this year. Analysts are saying this could lead to a record-breaking fourth quarter earnings report for Amazon.
Keeping Up With Competing Membership Services
Amazon created Prime Day in 2015 as a way to entice new members and drive sales during the summer lull. In 2019, the company made Prime Day a two-day event for the first time. Last Prime Day, Amazon sold over 175 million items—more than it sold on the previous Black Friday and Cyber Monday combined. Though Amazon does not report Prime Day revenue, analysts estimate that the company made over $7 billion from the two day event last year.
Amazon has over 150 million Prime members around the world, 50 million of which have been added over the past two years. Recently, companies like Walmart (WMT) began offering competing membership opportunities for customers, so Amazon will be looking to maintain its dominance through Prime Day offerings this year. Amazon already said it will offer discounts on popular items like its Fire TV products and Echo smart speakers, as well as many other deals.
The Potential Impact on Amazon’s Shares
Amazon is also looking at Prime Day this year as a test run for what is expected to be the busiest ecommerce holiday shopping season ever. Because people will likely be traveling less and doing less in-person holiday shopping this year, ecommerce companies are gearing up for a huge spike in demand. Amazon already hired hundreds of thousands of workers to deal with increasing demand. Earlier this month the company announced it would add 100,000 new jobs in the US and Canada to help with the holiday boom. Additionally, Amazon will increase its fulfillment center square footage by about 50% this year.
Amazon’s stock climbed by over 60% this year so far, and is currently priced at about $3,000 per share. If the company can show that it has the capability to handle a spike from Prime Day ahead of the holidays, and if it can stay ahead of competing membership services, shares of the company could be pushed even higher.
Prime day is just two weeks away. Both investors and customers are eager to see what Amazon has in store.
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