Instant Pots and Roombas are typically popular items during Amazon’s Prime Day event. But this year, consumers were more interested in dishwasher pods, diapers and snacks.
Looking at some of the most popular items during Amazon’s two-day discount event, which ended late Wednesday, provides a window into how record-high inflation is changing consumer spending habits.
The consumer price index, a broad measure of commodity prices, rose 9.1% in June, a 41-year high. Amid rising prices, consumers have tightened their wallets and cut back on discretionary spending.
Analysts had warned that inflation could dampen consumers’ willingness to pay for a new TV or Echo smart speaker during Prime Day.
JP Morgan wrote in a note to customers on Monday that they expected “slower growth in incremental Prime Day revenue given the challenging macro background.” Analysts at the firm predict total Prime Day revenue of $ 5.6 billion, an increase of only 5% from the previous year, compared to a 50% year-over-year growth in 2020 and a 9% year-on-year growth year in 2021.
So far, the Prime Day results have been better than feared. The company said Thursday it sold 300 million items during Prime Day, up from 250 million the year before, making it the “largest ever” in Amazon’s history.
Total online retail sales in the United States during Amazon’s Prime Day event exceeded $ 11.9 billion. That’s 8.5% higher than the total e-commerce transactions generated during last year’s event, according to data from Adobe Analytics. Other retailers like Best Buy and Target tried to take advantage of the Prime Day frenzy by launching their own competing events.
Although inflation did not appear to hurt sales, it may have affected which products consumers bought. Shoppers chose utensils over indulgences and reached out to household products like Amazon Basics garbage bags and Cascade dishwasher pods, said Melissa Burdick, president of Pacvue, which helps businesses advertise on Amazon and other e-commerce platforms.
“Sales are still very strong, but the shift mix in category is related to inflation, especially around food,” Burdick said. “If they could have figured out giving gas away, it would have been the best Prime Day ever.”
Rising grocery prices remain a major concern for many people across the country. About 90% of Americans are concerned about food prices, according to a recent Harris study in collaboration with Alpha Foods.
Frito-Lay snack packs were among the best-selling during Prime Day, according to Numerator, which tracked Prime Day consumption. But Prime Day customers didn’t just stick to the essentials. Amazon-tagged devices continued to top the list of hot items during the event, Counter found. Amazon tends to sharply give discounts on its Echo smart speakers and Fire TV sticks on Prime Day.
Consumers also avoided large tickets for smaller purchases. About 58% of Prime Day items were sold for under $ 20, while only 5% sold for over $ 100, according to Counter. About 34% of shoppers surveyed said they waited for Prime Day to buy something at a reduced price, and 28% passed on a good deal because they did not see it as a necessity, Counter found.
Prime Day and the other discount events that ran alongside it serve as a good “litmus test” for consumer confidence amid fears of a looming recession, said Daniel Newman, chief analyst at Futurum Research.
“It sounds to me like most people still feel that their balances at home are good, that they are still willing to go out on a whim and buy some things on a day like Prime Day,” Newman said.
Many consumers probably reasoned that it made more sense to buy “15 packs of Kind Bars and three new Echos” when offered at a discount, instead of waiting, he added.
“Should I spend the $ 300 today or spend the $ 500 tomorrow?” said Newman. “I think a lot of people rationalize that way. If we’re going to have to buy this anyway over the next few months, I might as well do it now.”
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