Amazon’s Fall Sales Event Demonstrates the Power of Prime Subscription Model
Amazon’s recent fall sales event has once again highlighted the immense value of its Prime subscription model and indicated a promising holiday shopping season for the ecommerce giant. The two-day Prime Big Deal Days, held on Tuesday and Wednesday, surpassed last year’s inaugural “holiday kickoff” event, according to Amazon. This event follows the main Prime Day sale in July.
During the 48-hour event, Prime members, who pay $139 per year for the 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 material impact on the company.
Market research firm Numerator reported that the average spend per order during this week’s event was $53.47, slightly higher than last year’s fall sale but lower than Amazon’s July Prime Day sale. Despite this, Andrew Lipsman, a retail analyst at Insider Intelligence, stated that Amazon still has room to gain further market share. Lipsman explained that while Amazon’s Prime growth has plateaued in recent years, there is significant potential for the company to expand its market share. He attributed the stagnation in market share to Amazon’s heavy reliance on electronics, which is an underperforming category.
Nevertheless, Lipsman emphasized that Amazon’s successful Prime event serves as a strong indicator of consumer demand heading into the holiday season. In preparation for this busy period, Amazon announced plans to hire 250,000 workers, an increase of 100,000 compared to last year.
Goldman Sachs sees this incremental hiring as a positive sign for Amazon’s internal demand forecast during the holidays. It is worth noting that Jim Cramer’s Charitable Trust holds a long position in AMZN.
As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive trade alerts before Jim makes a trade. Please refer to our Terms and Conditions, Privacy Policy, and Disclaimer for more information.