Amazon Prime Day is here. What to expect.
For the first time since its inception a decade ago, the members-only Prime event is scheduled to run for four days across 20 countries, instead of the typical two days. The extended Prime Day could generate more than $21 billion in gross merchandise value, growing 60% from last year, estimated Justin Post, an analyst at BofA Securities.
'Amazon's 2025 summer Prime Day is poised to be its largest ever, with the potential to deliver record-breaking sales, reinforce its competitive moat, and boost both retail and advertising revenues," wrote Ivan Feinseth, chief market strategist of Tigress Financial Intelligence.
Last year's Prime Day broke records too, Amazon said at the time, notching a new high for both sales and number of items sold.
But it isn't just Amazon. Although the e-commerce giant pioneered the midsummer shopping event back in 2015, mid-July sales have become as much of a staple as Black Friday across the sector. This year, Target's Circle Week runs from July 6 through the 12th and Walmart's deals from July 8 through the 13th.
The deals will provide a big boost to the digital economy.
From July 8 to July 11, U.S. retailers are expected to drive a record $23.8 billion in online spend, up 28.4% year over year, according to estimates from Adobe analytics released Monday. This is equivalent to two Black Fridays, which drove $10.8 billion in online spend in 2024, Adobe said.
The firm expects discounts will remain at 'historically high levels" across all retailers, ranging from 10% to 24% off an item's listed price. Those discounts should prompt shoppers to buy pricier items that they may have been holding off on until now, Adobe forecasts. Apparel, electronics, televisions, and appliances will see the best deals this week, Adobe projects.
Indeed, Amazon already gave shoppers a sneak peek of what they can expect, including up to 50% off on Levi-Strauss apparel and Zappos shoes; up to 40% off on televisions, vacuums, Anker speakers, Samsung Chromebooks and tablets, and premium cosmetics; and up to 30% off on toys, fragrances, and Away suitcases.
The company is also introducing 'Today's Big Deals," which are themed daily price drops exclusive to members. The special offers will launch daily at midnight Pacific time and will be available until supplies last, Amazon said.
Target and Walmart aren't falling behind. Target is focusing on back-to-school prep, offering Target Circle members 30% off on select apparel, uniforms, backpacks and school supplies, as well as deals on groceries and personal care items. Walmart is also boasting sales on back to school, as well as discounts on electronics, such as knocking off $100 from a Samsung computer monitor. The deals will be available for all Walmart customers, but Walmart+ members get access a day early. And for the first time, Walmart is offering its deals both in stores and online, the company said.
Yet even though Amazon's competitors are putting up a good fight, the company will still come out ahead. Prime Day isn't simply a big driver of sales—it also increases Prime membership sign-ups, wrote Brent Thill, an analyst at Jefferies. In 2024, a record-breaking number of customers signed up for Prime in the three weeks leading up to Prime Day, with millions of new members worldwide.
The Amazon Prime membership is a major loyalty driver for the retailer, Thill said. A recent Jefferies consumer survey found that 73% of respondents report having a Prime membership—far above 26% for Walmart+ and 22% for Target Circle. Most of those respondents said they intended to keep their memberships, which could present important upside for Amazon, given that research suggests that members of loyalty programs often make more frequent or larger purchases than non-loyalty members.
Amazon may also get an extra boost from recently rolled out AI initiatives. This Prime Day, customers can ask Amazon's AI shopping assistant, Rufus, specific questions about timing and tailored deal recommendations; use AI-powered shopping guides to refine searches; and ask Alexa+, Amazon's AI personal assistant, to track prices and notify them when they drop.
And that isn't counting any web-traffic benefits Amazon could get from third-party AI chat services and browsers. Adobe expects traffic from generative AI sources to increase by 3,200% year over year across all retailers. Web traffic from AI chatbots is still dwarfed by more traditional search methods, including going to web browsers or through email marketing, Adobe acknowledged, but it's becoming more ingrained in the consumer shopping pattern. In a recent survey of 5,000 U.S. consumers, 55% said they used generative AI for conducting shopping research, 47% said they used it for product recommendations, and 43% said it helped them seek out deals.
Historically, Amazon shares have gotten a slight lift following Prime Day, gaining an average of 1.11% the week after the event ends and 3.29% the month after, according to Dow Jones Market Data.
The stock could use the boost, no matter how small. Shares are up 1.8% this year as of Thursday's close, underperforming the S&P 500's 6.8% gain and the tech-heavy Nasdaq Composite's 6.7% increase.
Saddle up, deal-hunters—we're in for a long week. Maybe investors should be preparing, too, in case the chance pops up to snap up Amazon stock. It isn't every day you get a potential bargain on a retail giant.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
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