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Arielle Feger (00:00):

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(00:30):

Hello, listener. Today is Wednesday, July 23rd. Welcome to Behind the Numbers: Reimagining Retail, an EMARKETER podcast made possible by Quad. This is the show where we talk about how retail collides with every part of our lives. I'm your host for this week Arielle Feger. Today's episode topic is Amazon Prime Day.

(00:53):

But before we get into that, let's meet today's guests. Joining me for today's episode, we have Zak Stambor. Hi, Zak.

Zak Stambor (01:01):

Hi. Thanks for having me.

Arielle Feger (01:02):

Great to have you. And we've also got Rachel Wolff. Hey, Rachel.

Rachel Wolff (01:06):

Hey, Arielle.

Arielle Feger (01:07):

Okay, let's jump in. This year, Amazon stretched its July Prime Day event from two to four days, giving consumers more deals to shop, brands more opportunities to advertise, and Amazon more time to rack up the sales. Despite some reports of a sluggish start, Amazon said it was the biggest Prime Day event ever.

(01:27):

Zak and Rachel, what's the real story here?

Rachel Wolff (01:30):

Well, I think it would have been the biggest Prime Day regardless of what Amazon said because, as you mentioned, it's four days versus two. That was just inevitable. But I think there was definitely a disconnect, as you said, in the early hours where you had certain companies reporting a pretty steep decline in sales. But I think if you look at the overall numbers, Adobe had something like, was it 30.3% year-on-year, $24.1 billion in spending, two Black Fridays. I would say that sounds like a pretty resounding success.

Zak Stambor (02:04):

Yes, but. The Adobe numbers are really interesting, but they point to the broader US ecommerce landscape, not exclusively Amazon.

Rachel Wolff (02:17):

Yeah.

Zak Stambor (02:17):

That tells me that this Prime Day period is just a primetime for summer ecommerce, to some extent in-store as well, sales events. Yeah, it seems like Amazon delivered solid results. They said it was the best four-day period that included a Prime Day in its history. Kind of a weird metric and one that you would, like to Rachel said, assume they would hit. But it is a little unclear exactly how good it was for Amazon. Amazon is always opaque in its recaps of big sales events. This time around, Amazon was incredibly opaque and just didn't say that much. That said, I am fairly certain that sales were pretty strong.

Rachel Wolff (03:22):

Yeah, I think one data point that I did manage to scrounge out was that Momentum Commerce, which is the company that flagged the decline, they said that they grew sales 4.9% over the course of the four days. Again, like Amazon, comparing the four-day period year-on-year. Which it is growth. Is it astounding growth? Not really, considering it was twice as long. I think this tells you about the results that Amazon saw, which were good, but not necessarily amazing.

Arielle Feger (03:52):

Yeah, let's dig into that a little bit. Talk about maybe tariffs. Did tariffs play a role in this? Did we see consumer shopping differently, stocking up or putting off any kind of purchases? Or do we think that that didn't really play a role in the results?

Zak Stambor (04:10):

I think tariffs are casting a shadow over all of consumer behavior. It impacts how consumers spend, it controls how consumers think about spending, and it weighs on when they're spending.

(04:25):

One of the things that I think is notable about Prime Day is that, at this point, it's pretty easy to say that Prime Day has pulled the back to school shopping season forward. The back to school shopping period begins now in early July, which is very early. That's certainly one way in which tariffs and just this uncertainty is impacting consumer behavior.

Rachel Wolff (05:00):

Yeah, and I think the other way is just looking at what people are buying. There was some data from Adobe that maybe people were trading up in certain categories. But the vast majority of what Amazon was selling were these every day essentials, like protein shakes, I think that was a big one. Dawn Platinum dish soap. These are things that people buy regularly. Clearly, they're just using these sales, taking advantage of these sales to buy those every day products.

Zak Stambor (05:26):

Yeah, Numerator pointed that out and I thought, "That's a good point." Why wouldn't you stock up and save a few dollars when you know you're going to buy it? The sale has always been, to some extent, some of that. I think this year, consumers leaned in that direction a little bit more than in years passed.

Rachel Wolff (05:48):

Yeah. I think the longer length of the event also helped with that because people had more time to compare prices, for example, to see whether the dish soap was cheaper at Amazon versus Walmart. Maybe you put it in your cart, but you wait until the last day to actually make that purchase. I think that also contributed to the shifting behavior over the course of Prime Day.

Arielle Feger (06:08):

Yeah, and it makes sense why we'd had some headlines that the very start, day one and day two where things seemed a little slower, consumers were just waiting to see what kind of deals they were going to get.

(06:19):

As Zak mentioned, this isn't just Prime Day anymore, this is a whole bunch of retailers hosting their own competing sales. What stood out to you about other retailer sales this year? How is this Prime Day, now longer, shaping the broader retail landscape?

Zak Stambor (06:40):

First of all, everybody has a sale. Dollar General has a sale, REI has a sale, Kohls has a sale, Best Buy has a sale, and then Walmart and Target of course have sales. I think one of the things that stood out to me this year was that the Walmart and Target sales in particular overlapped quite a bit with the Prime Day sale, in part because Amazon pulled Prime Day so early in July that it was either overlap with the 4th of July or overlap with Prime Day. I think that partially explains the Adobe numbers. You saw that pretty strong gain in sales over that four-day period.

(07:20):

The other thing they did was jumpstart the Prime Day sale, often with member exclusive sales, to give consumers a little incentive to shop with them rather than wait around to see what Amazon might offer.

Rachel Wolff (07:38):

Yeah. I think another thing that stood out to me this year is that, in years past, most of the attention has been on Amazon and awareness of these competing sales has been limited, but I think that is really starting to shift. Going back to the Numerator data, 49% of people who shopped Prime Day also looked at Walmart Deals, and 35% looked at Target Circle Week. There is a lot more awareness and a lot more interest in with these retailers are doing over that period.

Zak Stambor (08:03):

That's just because Prime Day has been around a pretty long time at this point. The earned media from Prime Day is everywhere. As our articles about the competing sales, if you look at Wirecutter or Buy Sided in The Wall Street Journal, it's all over. Yeah, awareness is there. And consumers are shopping around, particularly because they are watching their spending.

Arielle Feger (08:32):

Yeah. Thinking about a new four-day format, what do we think, is Amazon going to do this again? Is this going to happen for its October Prime Day event? Are we going to see Amazon four-day Prime Days for the time being?

Rachel Wolff (08:49):

I think they can't go back now. If the point is to have a record Prime Day every year, you can't make it shorter at this point. That would defeat the purpose.

Zak Stambor (08:57):

The other thing I would say is that I think one of the understated reasons to have a longer Prime Day is about ad inventory. Certainly, you want to drive sales, but also you want to serve as many ads as you possibly can. I think in prior years, they got stuck, they didn't have enough ad inventory to deliver to all of the advertisers who wanted to reach consumers' eyeballs during this marquee moment. What Amazon essentially did was if Fox could double the length of the Super Bowl and have eight quarters, I guess they wouldn't be quarters at that point, but a double the length of the Super Bowl and all of that opportunity to serve consumers advertising, that's what Amazon did. Why would Amazon not grab all of that very high margin advertising revenue when it's just low hanging fruit for them?

(10:01):

I fully expect Amazon to make the Big Deal Days event longer. Will it be four days, will it be three days? I don't know. But I would assume that it will be a longer sales event because why not?

Arielle Feger (10:16):

We've seen Amazon really prioritize its advertising business and its site has probably one of the higher ad loads of a lot of different sites, so obviously any chance that it can get to expand that ad inventory it's going to take, so I completely agree with you there, Zak.

Zak Stambor (10:33):

The other thing I would add is that consumers are hyper-focused on value at this moment in time.

Arielle Feger (10:41):

Yeah.

Zak Stambor (10:41):

A sales event that is squarely focused on delivering deals is just a prime opportunity, pun unintended, to drive consumers to spend.

Arielle Feger (10:54):

Yeah. Thinking about that, again, a forward-looking question. What do we think this tells us about the holidays? I think it's pretty clear we're seeing very value-focused consumers. We're seeing consumers who are waiting out the best deals. What does Prime Day tell us about what to expect for Q4?

Rachel Wolff (11:15):

I think it's pretty much as you said. It's going to be Amazon and all these other retailers battling out to see which can have the deepest discounts to get these shoppers in. I think being early is key. As we saw, as Zak mentioned, Prime Day has been pulling forward back to school spending. Well, the October sales are pulling forward holiday spending. I think those are going to be crucial to look at, thinking about the holiday season.

Zak Stambor (11:41):

There's also the big unknown here and that's inflation. What will inflation look like come the holiday season? How will consumers respond to that inflation? The delays in the more extreme version of tariffs has given retailers a buffer to import more items so that they could have them in stock for the holiday season. Which is good news for consumers because that means you probably won't have items from China that had a 145% tariff, great. But the tariffs are still not nothing. The tariffs are still very high compared to any period in any of our lifetimes, or our parents' lifetimes for that matter. To some extent, even our grandparents' lifetimes. You have to go back to many, many, many, many, many decades to see anything like this. At some point, there will be a point where prices rise. Consumers are already very price sensitive, so they probably will be pulling back a bit. How much remains to be seen.

Arielle Feger (13:00):

Yeah. A question I think I asked you both off-pod. Do we think that consumers are going to get saled out? Do we think that a four-day Amazon Prime Day is too long? Or, as Zak noted, with just the general consumer landscape, is it just enough for people to find the best deals? What do you guys think?

Zak Stambor (13:26):

Four days is not four months. Four days is certainly longer than two days, it's twice as long. But it's not a week, it's not a month. It's a pretty short period of time that is short enough that it provides a driver to get consumers to spend. Yeah, I don't think four days makes people saled out.

(13:52):

I also don't think the more specific sales events, the pet sale, the gamer sale, all of these other sales that Amazon has popped up, you can kind of ignore those sales if you're not in the market for pet food, or whatnot. I don't think those are in the way. I think people want a sale, people want a deal. As long as you don't have that dynamic that ... Several years ago, Gap ran into this circumstance where consumers came to expect everything to be at least 50% off. That's a troubling place to be, but Amazon's not going to get there because it's a totally different type of retailer. And also, the discounts are not that steep. They don't want to train people to expect a sale.

Arielle Feger (14:45):

Yeah.

Zak Stambor (14:45):

But I don't think they're at risk of that.

Rachel Wolff (14:48):

Yeah. I wonder, I think maybe it's just a question of Amazon refining the four-day strategy. If people are reluctant to shop on the first couple days, what tactics can you do? Maybe you take some of those specific days, like Gaming Day or Beauty Week, or whatever those are, and use them to juice sales on those first two days.

(15:06):

But I don't think shoppers are at risk of fatigue, but I think the problem lies more with sellers and whether sellers can sustain this level of discounting, plus the advertising spend that is now required for a four-day Prime Day. And tariffs, all of these things are really weighing pretty heavily on their margins. I think there could be pushback from sellers if Amazon decides to continue extending Prime Day and continue extending the length of its sales events.

Arielle Feger (15:33):

Yeah, absolutely.

Zak Stambor (15:33):

I think that's a great point. It's one of the reasons why, during any of these events, Amazon leans so heavily into its own stuff. All of the gadgets that they sell are heavily discounted because they can do it. They can use these things as a loss-leader to get consumers in the door, and drive consumers to add to their cart and spend more.

Arielle Feger (15:57):

Yeah. I'm looking forward to seeing how this elongated back to school, holiday season, and how sellers react to it and how they're going to prioritize discounts throughout the entire season. Did either of you shop the sale this year?

Rachel Wolff (16:12):

I did not, I was very disciplined. And also, I actually forgot about it, which is surprising.

Zak Stambor (16:18):

Oh my goodness.

Arielle Feger (16:19):

I'm not sure how you do that.

Rachel Wolff (16:20):

I was traveling and jet-lagged for the last two days.

Zak Stambor (16:24):

That's true.

Arielle Feger (16:24):

Fair enough.

Rachel Wolff (16:25):

I was not in the loop.

Arielle Feger (16:27):

Zak, what about you?

Zak Stambor (16:28):

I for sure bought stuff during it. I got a new running watch, which I've been in the market for for quite some time. That is a big ticket, big-ish ticket item that I made. Then I also did what a whole lot of people did and just stock up on a few things that I would buy anyway. Dish soap, laundry detergent, those sorts of things. Because why not? If it's a few dollars less and I know I'm going to need it, I might as well. Did you?

Arielle Feger (17:05):

No, I did not.

Zak Stambor (17:05):

Nothing?

Arielle Feger (17:07):

No. I'm not a big online shopper. I'm not a big shopper period, so I think there's that. Maybe that's not great for hosting a retail podcast. I did notice that I got a few emails from different other retailers. Like bookshop.org, I got an email from, their pre-Prime Day sale. I did notice other retailers. Because I know in past years, we've seen Target and Walmart going pretty hard, but I think this year I've seen a lot more smaller brands and retailers get in the game and try to boost their sales pre-Prime Day. That was an interesting thing to see.

Zak Stambor (17:45):

Did you buy from any-

Arielle Feger (17:48):

Nope.

Zak Stambor (17:48):

... of those smaller or other retailers?

Arielle Feger (17:51):

I did not. I haven't bought anything online in, well, a while. A few months I think. Unless you count groceries, which I get from Instacart.

Zak Stambor (18:01):

Yeah, I didn't buy anything from any other retailers. I was squarely focused on Amazon.

Arielle Feger (18:07):

Lucky them.

Zak Stambor (18:08):

I did look, I comparison shopped.

Arielle Feger (18:09):

Yeah. I think that that's generally a win-win for the consumer. If we're having every single retailer rolling out these sales, we get to price comparison shop and see where the best deal is. But I would really love to see, I don't know if there's any way to even get this data, Amazon probably could, what that incrementality, what is going to having been bought anyway? The dish soap, the laundry detergent, the things that you're always stocking up on. And what are the things that people maybe ordered a little bit more of or different items? I would love to see the overlap between what's a current order and what's a net new sale, but I don't think Amazon wants to tell us.

(18:53):

Okay, that's all we have time for today. Thank you, Zak, for being here.

Zak Stambor (18:58):

Thanks for having me.

Arielle Feger (19:00):

Thank you, Rachel, for being here.

Rachel Wolff (19:01):

Thanks. I enjoyed our chat.

Arielle Feger (19:03):

Yeah. Thank you, listeners, our studio team, including our podcast editors, who are always in their prime. Please leave a comment or review, and remember to subscribe to Behind the Numbers Podcast. We'll be back next Wednesday with another episode of Reimagining Retail. On Friday, join Marcus for another episode of Behind the Numbers, an EMARKETER podcast made possible by Quad.