Marketplace Briefing: Amazon’s Prime Day event in October is picking up steam
This is the latest installment of the Marketplace Briefing, a weekly Modern Retail+ column about the ever-changing e-commerce marketplace landscape. More from the series →
Shoppers are hunting Amazon’s October Prime Day for holiday savings earlier than ever, driving a sales spike as the fall sales event continues to gain traction among both brands and consumers.
Sales for Amazon’s October Prime Day event, known as Prime Big Deal Days, were up 41% year over year as of 3 p.m. Eastern Time on Wednesday, according to Momentum Commerce, which manages Amazon sales on behalf of consumer brands like Crocs, Lego and Clorox. Across that same client set, sales were 32% below Amazon’s summer Prime Day event, a gap that’s historically much wider, around 50%, according to the firm. All told, the data suggests Prime Big Deal Days is steadily closing the gap between it and July Prime Day.
Amazon has also described this year’s Prime Big Deals Day as “biggest October shopping event ever,” with more Prime members shopping the event, driving higher sales and more items sold compared to last year. Amazon generally doesn’t disclose sales figures for its Prime Day event.
While it seems like the holiday shopping season should be shorter this year, with five fewer shopping days between Thanksgiving and Christmas compared to last year, the opposite is turning out to be true. Amazon rolled out the two-day event earlier — from Oct. 10 and Oct. 11 in 2023 to Oct. 8 and Oct. 9 this year. Other retailers are also pulling forward their fall sales events to win over shoppers earlier than usual, especially in light of cautious discretionary spending. Another factor is the upcoming presidential election in the U.S., with some brands using the October Prime Day sale to kick off their holiday sales early. Though smaller than its July counterpart, Prime Big Deal Days is playing an increasingly important role in how brands plan out their pricing and marketing strategies throughout the year.
“The July Prime event is still much larger, but definitely, from what we’re seeing, that gap is shrinking,” said Andrew Waber, director of market research at Momentum Commerce.
Launched in 2015, Prime Day started out as a way to boost Amazon’s $139-per-year membership program, which grants subscribers access to fast shipping and exclusive discounts. The event was so popular that Amazon introduced an October Prime Day in 2022, which has effectively pulled forward seasonal sales and driven demand throughout the year. According to Consumer Intelligence Research Partners, about 189 million people in the U.S. had a Prime subscription as of September, up 9% from a year ago and the highest estimate ever since CIRP started tracking Prime memberships in 2013.
Big-box retailers are holding their own October sales this year to compete with Amazon for holiday dollars. Walmart’s Holiday Deals sale starts on Oct. 8 and runs through Oct. 13, two days longer than the same event it held last year. Meanwhile, Target Circle Week kicks off on Oct. 6 this year and will run until Oct. 12. Even specialty retailers, including Home Depot, Wayfair and Best Buy, are participating in the October sales bonanza with parallel sales of their own.
The increased competition from other marketplaces and retailers is reflected in shopping behavior this year. “Typically, what you’d see in both this event and the July Prime event is that the biggest peak tends to be day one early in the morning, doorbuster style, people at 9 a.m. ready to shop,” Momentum Commerce CEO John T. Shea said. “What we saw with this event is that the evening peak, which is typically secondary, actually exceeded the morning peak slightly.” The shift suggests that people are hop-scotching from one marketplace to another to compare prices before they click “Add to Cart.”
Shoppers are increasingly spacing out their holiday shopping to get a head start on deals. This year, 32% of consumers said they planned to start shopping for the holidays in July through November, up from 31% in 2022 and 28% in 2023, according to a survey from Gartner. Part of the urgency to start holiday shopping early stems from concerns that in-store prices are not competitive with online prices, as well as anxieties related to inventory and selection issues, the same survey found.
Discounts during the October Prime Day sale were heavier than usual, in part to win over inflation-battered shoppers, as well as to maximize sales ahead of any possible disruptions related to the election, according to Phil Masiello, founder of acceleration agency Crunchgrowth.
“Usually it’s about 20% to 25%, but I think they went a hell of a lot deeper this year, around 30% to 35%,” Masiello said. “The brands that we deal with were a little concerned about whether or not consumers will be engaged with the election coming up, so I think that played into the decision to lower prices and start off the holiday season a little bit strong.”
As a prestige skincare brand, Borghese usually avoids heavy promotions. But the company decided to participate in Amazon’s October sales event for the first time, said Christina Citrola, Borghese’s vice president of sales, marketing and e-commerce. The brand discounted all of its products by 20% and has seen a threefold sales lift compared to a usual business day on Amazon. While Borghese has participated in July Prime Day in the past, they historically only offered discounts on select SKUs. The October event has also helped the brand court new customers ahead of the crucial holiday season.
“There’s so much uncertainty with the election coming up, and we’re cognizant that our consumer is looking to shop for the holidays ahead of time during Prime Day,” Citrola said, “So, that was part of our reason to participate in Prime Day, to elevate the consumer experience and make their lives not just easier but more pleasurable.”
To Momentum Commerce’s Shea, the shortened holiday calendar — as well as the upcoming election — influenced brands’ budget planning and discounting activity. At the same time, brands are increasingly taking the October Prime Day event more seriously.
“This was the first year that brands way in advance planned on revenue spikes in October on account of the Prime Big Deal Days event, and as a result, they executed price architecture in a way where they were eligible to do bigger deals to participate in it,” Shea said. “Those things together result in a better event for consumers that sees the type of elevated sales activity that we’re seeing.”
Will Nitze, the founder and CEO of plant-based protein startup IQBar, said early numbers show the brand’s October Prime Day sales are up 80% compared to last year. He said the primary driver of the brand’s success was more brand awareness, which helped bring in more sales and new customers. In general, October Prime Day was a boon for consumer packaged goods brands. Data from Salesforce, based on the activity of 1.5 billion shoppers across the software company’s products, shows that food and beverage products were one of the top-performing categories for both traffic growth and order growth. To Nitze, the October Prime Day event is an opportune time to attract shoppers, particularly those who need to replenish products, as they’re shopping for holiday presents early.
Indeed, Prime Big Deals Day is more like a “stock up event,” with the grocery category exceeding forecasts, according to Zachary Zaerr, Director of Managed Services at e-commerce software platform Pacvue. “Typically, we don’t see a huge push for this category now, but brands are showing more engagement, including more deal participation and increasing their budgets, which could be driven by using these high-traffic times to track toward year-over-year sales goals,” Zaerr said. “Even grocery clients that experienced some supply chain and/or shipping issues over the last few months are having a solid performance despite limited participation.”
This was sleep device brand Helight’s first year participating in both the July and October Prime Day events, but sales for the fall event were trending “very similarly to July Prime Day sales,” according to Denise De Baun, Helight’s U.S. CEO. Neither the shortened the holiday calendar nor the upcoming presidential election impacted how the brand prepared for the October Prime event, but she said those factors would likely push the brand to move up its holiday promotions earlier than usual.
Additional Salesforce data suggests adverse weather conditions in certain parts of the U.S. have hampered sales to a degree. In the past three days leading up to Prime Big Deal Days, online traffic in the southeast region of the U.S. is down 6% year over year. Florida, in particular, has seen traffic fall 10%, according to Caila Schwartz, director of consumer strategy and insights at Salesforce.
“There is evidence that current events in the U.S. are resulting in a quieter than planned Prime Day event,” Schwartz said in an email statement. “As brands continue to prioritize the health and safety of their customers, marketing efforts have been pulled back, contributing to the fall in overall year-over-year results so far this week.”
But that doesn’t mean brands aren’t seeing growth.
“In a world where traffic is a little bit lower but conversion is higher, you can still have a revenue lift,” Shea said. “If the deals are structured really well, we might be seeing more conversion and lower traffic, but overall more revenue.”
Marketplace news to know
- As it prepares to go public, Shein disclosed in a recent filing that its revenue grew by 38% to £1.55 billion ($2.03 billion).
- Dave Clark, the Amazon veteran best known for building out the e-commerce platform’s logistics network, has launched a new supply chain startup called Auger.
- Allbirds is the latest brand to test out delivery via Uber Eats.