Amazon has had an eventful summer with tariffs, an extended Prime Day, and rising AI investments. This period has shown how the e-commerce giant is adapting to economic pressures while maintaining growth.
Amazon's tariff temperature
Amazon reportedly raised prices on hundreds of essential items despite pledging to keep them low, with the Wall Street Journal's analysis showing price increases on 1,200 of Amazon's cheapest household goods. Yet analysts say the ecommerce giant denies the price hikes.
"They are pushing back very strongly against the narrative that prices are going up," said Wolff. "So far, it seems like most sellers are working through pre-tariff inventory, so it's possible that yes, the price impact has been negligible."
Some Amazon sellers had time before incoming tariffs to stock up on inventory in hopes of staving off price increases.
"They definitely have some sellers that planned ahead," said our analyst Jeremy Goldman. "There was a lot of signaling that the relative chaos that retailers and consumer-packaged goods (CPGs) had had to deal with in the first part of the year…If you're a seller on Amazon, you have contingency plans in place to some degree."
Prime Day's evolution
This year, Amazon extended Prime Day from two to four days, with US retailers collectively driving over $24 billion in online spending during the period, up 30% year over year according to Adobe data.
The extended format is changing how both consumers and sellers approach the event.
"When you have a longer event, you give people more opportunity to comparison shop," said Wolff. "We really saw Walmart, Target, all of these retailers get a pretty big bump during that period."
And consumers are becoming more judicious in their approach to Prime Day, according to analysts. They note that many shoppers needed to see larger discounts before making purchases, citing tariff-related price increases.
"The average shopper gets on average more sophisticated every year," said Goldman. "When Amazon says, 'Wow, this thing is 40% off,' maybe a few years ago people might've said, 'Well, I better buy that now.' But now it's easier than ever to just say, 'I'm just going to make sure that that's a good price.'"
Analysts pointed out that 51% of US Prime members reported they were likely to buy everyday essentials during Prime Day, suggesting many consumers view Prime Day as an opportunity to save on routine purchases rather than for impulse buying.
Amazon's AI ambitions
Amazon is expanding its AI footprint through acquisitions like Bee, maker of a wearable bracelet that transcribes conversations and uses AI to create searchable histories and action items.
This move reflects broader industry trends, yet analysts are skeptical about consumer adoption of such always-listening devices.
"I'm always slightly skeptical about these kinds of AI devices because I don't know how many people would feel comfortable having a device that they know Amazon is listening to every word they say," said Wolff. "Although I guess that's technically Alexa Echo. I guess people feel differently about having it in the home versus wearing it all the time."
The more significant AI question for Amazon may be how generative AI will affect the shopping journey.
"Is it going to take people away from Amazon? Are tools like ChatGPT or Perplexity going to be the places where people discover products?" Wolff asked. "In terms of investment, I would say that probably a lot of the money is going there. How do you create a business that is protected from AI shopping agents, but how do you build your own shopping agent to take advantage of the fact that you think that that's how people are going to shop in the future?"
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