Amazon’s Fall Sales Event Demonstrates Value of Prime Subscription Model
Amazon’s recent fall sales event has once again highlighted the immense value of its Prime subscription model and indicates a promising holiday shopping season ahead. The two-day Prime Big Deal Days, which took place on Tuesday and Wednesday, surpassed last year’s inaugural “holiday kickoff” event, according to the company. This event serves as a follow-up to Amazon’s main Prime Day sale held in July.
During the 48-hour event, Prime members, who pay $139 per year for a subscription that includes fast shipping, ordered over 150 million items from third-party sellers. This is a significant increase from the approximately 100 million items ordered in 2022. Jeff Marks, director of portfolio analysis at the Investing Club, commented, “Another solid Amazon shopping event shows the power of the Prime subscription and the market share gains it has over its retail competition.” He also expressed his belief that the U.S. Federal Trade Commission’s antitrust lawsuit against Amazon will not have a significant impact on the company.
Market research firm Numerator reported that the average spend per order during this week’s event was $53.47, slightly lower than Amazon’s July Prime Day sale but higher than last year’s fall sale. Andrew Lipsman, a retail analyst at Insider Intelligence, stated that Amazon currently holds about a 39% share in the overall ecommerce retail market. While the growth of Amazon’s Prime membership has stabilized, Lipsman believes there is still room for the company to gain further market share.
Lipsman attributed Amazon’s recent flatlining market share to its heavy reliance on electronics, an underperforming category. However, he emphasized that the success of Amazon’s latest Prime event serves as a strong indicator of consumer demand heading into the holiday season.
In preparation for the upcoming holidays, Amazon announced plans to hire 250,000 workers, a significant increase compared to last year’s holiday hires. Goldman Sachs views this incremental hiring as a positive sign for Amazon’s internal demand forecast during the holiday season.
Overall, Amazon’s fall sales event has once again demonstrated the value of its Prime subscription model and suggests a prosperous holiday shopping season ahead.