Amazon’s Fall Sales Event Demonstrates the Power of Prime Subscription Model
Amazon’s recent fall sales event, known as Prime Big Deal Days, has once again highlighted the immense value of the Prime subscription model. The event, which took place over two days this week, 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 during the same event in 2022.
Jeff Marks, the director of portfolio analysis at the Investing Club, commented on the success of the event, stating, “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.
According to market research firm Numerator, the average spend per order during this week’s event was $53.47. While this is slightly lower than Amazon’s July Prime Day sale, it is higher than last year’s fall sale. Andrew Lipsman, a retail analyst at market research firm Insider Intelligence, noted that Amazon currently holds about a 39% share in the overall ecommerce retail market. Lipsman believes there is still room for Amazon to gain further market share.
Lipsman explained that Amazon’s market share growth has slowed in recent years due to its heavy exposure to electronics, which is an underperforming category. However, he emphasized that Amazon’s successful Prime event is a positive indicator of consumer demand heading into the holiday season.
In preparation for the holiday season, Amazon announced plans to hire 250,000 workers, a 100,000 increase compared to its holiday hires in 2022. Goldman Sachs sees this incremental hiring as a positive sign for Amazon’s internal demand forecast during the holidays.
Overall, Amazon’s strong execution at its fall sales event has reaffirmed the value of the Prime subscription model and suggests a promising holiday shopping season for the ecommerce giant.