The mammoth promotion — the company sold 34.4 million items in last year’s Prime Day — aims at boosting membership in the Amazon Prime service.
It’s Prime Day — a kind of Christmas in July, for the second year, in Amazon’s bid to create a new retail holiday of its own.
On Tuesday, the tech and retail giant is offering 100,000 deals to members of its $99-a-year Prime loyalty program, the second annual coming of a mammoth online blowout sale that last year Amazon.com says surpassed the previous Black Friday, usually retail’s holiest holiday.
Whether Amazon succeeds in creating a landmark retail extravaganza for the ages is yet to be determined, but experts say last year’s Prime Day yielded a rich reward that will only get bigger this year, given the company’s snowballing growth.
Also, competitors such as Wal-Mart are responding in kind by offering their own megadeals and free shipping options — a sign there’s demand for a shopping day in the midst of the usually lackluster summer.
“Amazon may have created a new shopping holiday, but they’re not the only ones profiting from it,” says Benjamin Glaser, editor at DealNews, a comparison-shopping website that tracks deals and discounts.
Amazon said it sold 34.4 million items last year on Prime Day — 398 per second. It also said it sold more of its devices than in any other day in its two-decade history, while gaining more new Prime members than in any other single day.
The loot was worth $400 million in revenue, say JPMorgan analysts. That’s a significant piece of the $107 billion in sales the company reported in 2015.
This year “we expect an even bigger impact,” given that there’s more awareness about the event, more deals and bigger stock of products, the analysts said. Also, the ranks of Prime members are a fast-expanding club; JPMorgan estimates there are more than 55 million worldwide.
In what seems a show of investor anticipation about Prime Day, Amazon shares Monday hit a new high, closing at $753.78, up 1.07 percent and pushing the company’s market capitalization north of $360 billion.
But Prime Day’s importance to Amazon goes beyond the cash register. First and foremost, it serves to demonstrate the value of Prime membership and to draw new members, who tend to spend far more than nonmembers on the Amazon site.
It also serves in retail’s quietest period as a life-size drill for Amazon’s ability to handle the crushing demand of the fourth-quarter shopping season, JP Morgan analysts say. After all, Amazon has been making key investments in logistics, including leasing aircraft, as it addresses the costly crunch in fulfillment capacity it saw in the holiday retail season of 2015.
Despite the splash, Prime Day also has drawn some scathing social-media criticism from shoppers frustrated with deals selling out too quickly or discounts being unavailable on items they wanted. It remains to be seen whether Amazon will be able to avoid what Twitter wits dubbed “#PrimeDayFail.”
“They’re going to have to up their game this year,” said Glaser, the DealNews editor.
This time around, Amazon is bringing out some of its most popular innovations for the cause.
Prime Now, a superfast delivery service, was only in a few cities last Prime Day. Now it’s in more than 40 metro areas worldwide. To encourage shoppers to use the service, Amazon is offering a $10 discount to people who place their first ever Prime Now order between July 6 and Tuesday (and a $10 coupon to use on Prime Now later in the month.)
Then there’s Alexa, Amazon’s artificial-intelligence assistant, most famously incarnated in the Echo voice-activated speaker. It has proved a hit, with its ability to respond to voice commands to play music or turn lights on and off; now Amazon wants to make it a big shopping platform too.
So in celebration of Prime Day, shoppers’ first orders through Alexa will come with a $10 discount (on orders more than $20).
Meanwhile, Amazon faces a more challenging landscape this time around. During July, archrival Wal-Mart is offering a free monthlong trial of its Prime-like two-day shipping service and a broadside of online deals.
On Monday, the Bentonville, Ark., retail giant upped the ante by offering free shipping with no minimum purchase on online orders through Friday, while emphasizing no membership is required.
“Wal-Mart offers more ways for every customer to save at a time when others are screaming one-day sales reserved for their most elite customers,” it said.
JPMorgan analysts remain skeptical of the challenge posed to the Prime program by competitors. “While traditional retailers have made significant strides with e-commerce growth in recent years, we believe Prime creates a higher bar for online retail and operates with a scale and feature set that can’t be replicated.”