3 Reasons Why Prime Day This Year Will Be Bigger Than Ever
On October 13, Amazon Prime Day may become the biggest shopping holiday because of these three reasons, according to the Motley Fool.
1. The accelerating shift to e-commerce
E-commerce was already booming prior to the pandemic and stay-at-home orders being enforced amid the pandemic only accelerated the shift. According to the US Census Bureau, in the second quarter alone online sales grew 44 percent. Amazon has been leading the charge for years in the shift to e-commerce. These gains are not temporary either as e-commerce is expected to continue to grow for the next three quarters.
Amazon struggled to meet demand in March and April, but it has reassessed its operations and seems to have caught up. The company is in the process of expanding its fulfillment network by 50 percent. Growth on Prime Day is expected to exceed the 44 percent year-over-year growth in online sales during the second quarter.
2. Early holiday shopping
Prime Day will be the start of holiday shopping this year. With a viable vaccine still not confirmed, consumers won't be eager to pack in lines on Black Friday. Most people will do their holiday shopping online. Amazon will benefit from this trend because they will be selling items earlier than Black Friday or Cyber Monday retailers will. This could be the first time Prime Day sales surpass Black Friday and Cyber Monday.
3. Accelerating Prime membership
Amazon currently has more than 150 million Prime members globally. Amazon CFO Brian Olsavsky said: "Existing Prime member renewal rates improved, and the Prime member growth rate accelerated both in the U.S. and worldwide" during the second-quarter earnings call. Prime Day deals are meant only for Prime members, but the deals are meant to draw in new subscribers.