Amazons purchasing power will need to come into play to secure deeper discounts
GlobalData, a data and analytics company, suggests that Amazon will need to provide a compelling promotional event during its two-day Prime event in the UK on July 11 to entice spending and reverse the decline in Prime Day participation.
Eleanor Simpson-Gould, Senior Retail Analyst at GlobalData, points out that to increase Prime Day participation, Amazon must offer irresistible deals on top brands to stand out among the many retailers already advertising discounts. While the proportion of consumers with access to Prime membership has been steadily increasing, reaching 67.8 per cent in 2022, the proportion of consumers purchasing something during Amazon Prime Day has not kept pace with the growth. Prime Day participation has only risen by 10.9 percentage points during the same period.
Consumer sentiment regarding retail spending has shown signs of improvement, as indicated by GlobalData Retail’s retail spend index, which has increased to -61.1 in June 2023 compared to May 2023. However, with the online non-food market projected to experience modest growth of 0.4 per cent in 2023, Amazon faces a challenging task in convincing shoppers to make purchases.
Eleanor Simpson-Gould concludes that as the UK continues to face inflationary pressures, Amazon will face greater scrutiny regarding the discounts it offers. The company’s purchasing power will need to come into play to secure deeper discounts than its competitors. Homewares and furniture discounts should be a focus for Amazon, as these categories saw significant spending from 35–44-year-olds, the largest age group of UK Prime Day shoppers in 2022. Given the improving optimism regarding spending ability among this age group in June, they represent a key target for promotional offers.
