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 has raised expectations for a successful holiday shopping season. The two-day Prime Big Deal Days, which took place on Tuesday and Wednesday, surpassed last year’s “holiday kickoff” event in terms of performance, 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 represents a significant increase from the approximately 100 million items ordered in 2022. Jeff Marks, Director of Portfolio Analysis at the Investing Club, noted that this successful shopping event further demonstrates the market share gains Amazon has achieved over its retail competitors.
Marks also expressed his belief that the U.S. Federal Trade Commission’s antitrust lawsuit against Amazon is misguided and unlikely to have a significant impact on the company. He attributed this to the attractive deals and savings that Amazon offers to its customers.
According to market research firm Numerator, the average spend per order during this week’s event was $53.47. While this figure 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 Insider Intelligence, stated that Amazon currently holds about a 39% share in the overall ecommerce retail market. Lipsman believes that although Amazon’s Prime growth has stabilized, there is still ample opportunity for the company to gain further market share.
Lipsman also pointed out that Amazon’s heavy exposure to electronics, which is an underperforming category, has hindered its overall market share growth. Nevertheless, he emphasized that Amazon’s successful Prime event serves as a strong indicator of consumer demand heading into the holiday season.
In preparation for the upcoming holiday season, Amazon announced plans to hire 250,000 workers, an increase of 100,000 compared to last year. Goldman Sachs views this incremental hiring as a positive sign for Amazon’s internal demand forecast during the holidays.
As the holiday season approaches, Amazon’s strong performance at its fall sales event has instilled confidence in its ability to drive retail revenue throughout the rest of the year. The company’s Prime subscription model continues to be a key driver of its success, and with room for further market share gains, Amazon is poised for a prosperous holiday shopping season.