Instant Pots and Roombas are usually hot sellers during Amazon’s Prime Day event. But this year, consumers were more interested in dishwasher, diaper and snack containers.
A look at some of the most popular items during Amazon’s two-day discount event, which ended late Wednesday, provides a window into how record-high inflation is changing consumer spending habits.
The consumer price index, a broad measure of the prices of goods and services, rose 9.1 percent in June, a 41-year high. Against the backdrop of rising prices, consumers have tightened their wallets and are cutting discretionary spending.
Analysts warned that inflation could reduce consumers’ willingness to shell out for a new TV or Echo smart speaker during Prime Day.
JP Morgan wrote in a note to clients on Monday that it forecast “slower Prime Day incremental revenue growth given the challenging macro backdrop.” The firm’s analysts forecast total Prime Day revenue of $5.6 billion, up just 5% from the previous year, compared to 50% year-over-year growth in 2020 and 9% year-over-year growth in 2021.
So far, Prime Day results have been better than expected. The company said Thursday that it sold 300 million items during Prime Day, up from 250 million the previous year, making it the “biggest ever” in Amazon’s history.
Total US online retail sales during Amazon’s Prime Day event topped $11.9 billion. That’s up 8.5 percent from the total e-commerce transactions generated during last year’s event, according to Adobe Analytics data. Other retailers like Best Buy and Target tried to capitalize on the Prime Day frenzy by launching their own competing events.
While inflation does not appear to have hurt sales, it may have affected what products consumers buy. Shoppers are choosing utility over pleasures, reaching for household products like Amazon Basics trash bags and Cascade dishwasher pods, said Melissa Burdick, president of Pacvue, which helps companies advertise on Amazon and other e-commerce platforms.
“Sales are still very strong, but the change in the category is related to inflation, especially around food,” Burdick said. “If they could figure out how to give away gas, it would be the best Prime Day ever.”
Rising grocery store prices remain a major concern for many people across the country. About 90% of Americans are concerned about food prices, according to a recent survey by Harris in partnership with Alpha Foods.
Frito-Lay snack packs were among the top sellers during Prime Day, according to Numerator, which tracks Prime Day spending. But Prime Day shoppers didn’t just stick to the basics. Amazon-branded devices continued to top the list of hot items during the event, Numerator found. Amazon tends to heavily discount its Echo smart speakers and Fire TV sticks on Prime Day.
Consumers also avoid expensive items for smaller purchases. Roughly 58 percent of Prime Day items sold for under $20, while only 5 percent sold for more than $100, according to Numerator. About 34 percent of shoppers surveyed said they waited until Prime Day to buy something at a discount, and 28 percent passed on a good deal because they didn’t see it as a necessity, Numerator found.
Prime Day and the other discount events that ran alongside it served as a good “litmus” for consumer confidence amid fears of a looming recession, said Daniel Newman, principal analyst at Futurum Research.
“It sounds to me like most people still think their home balances are good, that they’re still willing to go out on a whim and buy some things on a day like Prime Day,” Newman said.
Many consumers probably think it makes more sense to buy “a 15-pack of Kind Bars and three new Echos” when they’re discounted rather than waiting, he added.
“Am I going to spend $300 today or $500 tomorrow?” Newman said. “I think a lot of people rationalize it that way. If we’re going to be buying these things in the next few months, I might as well do it now.”
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