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What’s the Real Deal with Amazon's Prime Day?

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Amazon Prime Day

What’s the Real Deal with Amazon's Prime Day?

Aug 14 2015, 10.39am GMT

STOCK.com

While the actual success of Amazon’s ‘Prime Day’ is difficult to gauge, analysis of the retail sales report for July released by Amazon on Thursday makes one thing sure: no worry for Wal-Mart’s Black Friday.

According to a Fortune report datelined July 16, sales for ‘Prime Day’ were up by 80% in the U.S. and 40% in Europe, quoting ChannelAdvisor and CNN Money as their source.

The report adds that Amazon boasted that sales for the day exceeded last year’s Black Friday although no details were forthcoming from Amazon. Choosing last year’s Black Friday for comparison might not have been a great choice. Sales for the last Thanksgiving weekend declined by 11%, according to a National Retail Federation report for November 2014 that there had been 6 million shoppers less than expected.

U.S. retail sales for July increased by 0.6%, spurred by higher demand for most consumer products, from cars to clothing, according to the retail report. The numbers that interest us, from an Amazon perspective, are that online stores gained 1.5% while purchases from department stores and electronics and appliances shops declined by 0.8% and 1.2% respectively.

These numbers tell us that most of the gain in online sales was at the expense of sales from retail brick and mortar stores. Excluding auto sales, gasoline, building materials and food services, purchases rose by 0.3% after a revised 0.2% gain in June.

Although sufficient specific detail is not available in the report, the numbers do suggest that ‘Prime Day’ might not have been quite spectacular success that it was made out to be.

Ted Wieseman from Morgan Stanley was looking for a higher number than the 1.5% reported increase in online sales.

“Non-store is mostly internet retailers, and we were looking for an upside from Amazon’s ‘Prime Day’ event to support a significantly larger gain” he commented in a note to clients.

Figures for sales last November, without seasonal adjustment, which would include Black Friday, were $41.54 billion while total sales for July were $37.93 billion. The inference here is that ‘Prime Day’ did not have the same impact on July sales as Black Friday had on sales the previous November.

All this is not to say that Amazon did not enjoy a high degree of brand awareness and might well have recorded significantly higher sales on the day at the expense of other online retailers. The bottom line however, is that ‘Prime Day’ seems to have been a paper tiger in comparison with Black Friday.

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