📦🚚 Prime Day was a HUGE Hit
My
Happy Sunday! This week, we saw:
U.S. App Store revenue from non-game apps surpasses games for the first time
Celsius, one of crypto’s biggest lenders, files for bankruptcy
Kids and teens now spend more time watching TikTok than YouTube
The Biggest Prime Day EVER
During this year’s Amazon Prime Day sale, shoppers bought more than 300 million items, up from 250 million in 2021, making it the biggest Prime Day event ever. While Amazon didn’t release the total sales from the event, it said that Prime members purchased more than 100,000 items per minute. This was the first Prime Day event under the new CEO Andy Jassy, who took over after Jeff Bezos stepped down last year.
It wasn’t just Amazon that had a big two-day shopping event. Retailers like Target, Walmart, Kohls, and Best Buy also had massive sales as they aimed to unload their bloated inventory numbers. With inflation driving up the prices of seemingly everything, everyone seemed to take advantage of Prime Day to offer discounts and encourage consumers to splurge a little big.
A study from the Adobe Digital Economy Index said that the total U.S. online spend across online retailers touched $11.9 billion — an 8% increase from last year which saw an $11 billion spend. It also noted that the second day of Prime Day sales generated more than $5.9 billion, registering a 9.2% growth from the second day last year, which generated $5.4 billion.
One of the ways that Amazon promoted Prime Day was through a QVC-type shoping livestream with different celebrities and social media influencers talking about various deals. Viewers of these Prime Day livestreams could then purchase the featured products and brands as they watched. According to Amazon, these live streams generated more than 100 million views. Not bad!
Amazon’s reliance on celebrities and social media influencers to market Prime Day has been primarily an effort to attract Gen Z shoppers. According to a study by LTK, Gen Z makes up 40% of “influencer-oriented shoppers” and that 92% of all Gen Z adults (18-25) have purchased an item based on a social media influencer’s recommendations. According to consumer insights firm, Numerator, just 18% of Prime Day shoppers were under the age of 34, which is lower than what Amazon is aiming for.
Nonetheless, Amazon’s marketing paid off, as Citi found that Amazon’s iOS app jumped up the rankings on the App Store leading up to Prime Day.
While it was a blowout shopping event by all accounts, there was something interesting that I found. In 2021, the most three most-purchased categories during Prime Day were health and beauty, consumer electronics, and apparel and shoes. This year, it was household essentials, health and beauty, and consumer electronics, in that order.
According to Numerator, 32% of Prime Day buyers purchased household essentials and 17% of shoppers said they bought groceries from Amazon on Prime Day. In fact, among the top five items sold on Prime Day included Frito-Lays variety packs and Dawn Powerwash Dish Soap. Last year, the top five items sold didn’t include any household or govery items.
TC: I was one of them! Amazon Fresh had a Prime Day deal where you could get $20 off purchases over $40.
~50% off groceries is a deal you can’t resist, especially right now.
So what does this all mean? Even though there were a lot of Prime Day deals for TVs and other electronics, essentials came first. With CPI recently coming in at 9.1% and the cost of groceries now up 12.2% over the past year, the largest increase since 1979, people’s wallets are getting squeezed. In fact, Numerator found that 83% of Prime Day shoppers said that inflation and rising prices influenced their Amazon purchases.
So while Amazon will probably release this info, I’m curious to see the breakdown of total sales over the years excluding the household and grocery categories. I have a feeling discretionary spending is declining rapidly and will continue to decline as inflation climbs and real wages fall.
Chart of the Week
Euro / U.S. Dollar at the lowest since 2002. I guess time to travel to Europe!