Why is this happening earlier this summer?

Why is this happening earlier this summer?

Amazon confirmed Thursday that its annual event on Prime Day deals will change earlier this year, as the e-commerce giant looks to increase spending in what is normally a slower period in the retail calendar.

The company has yet to confirm the exact date. The two-day shopping extravaganza originally took place in July, but Amazon said it will now take place in the second quarter, implying an event in June.

Amazon has provided a outlook for the second trimester for revenue of $ 110 billion to $ 116 billion – which topped Wall Street’s projection of $ 108.6 billion because it included an expected increase from Prime Day.

On a earnings conference call, CFO Brian Olsavsky said Amazon intended to host Prime Day earlier in the year in 2020, but those plans were thwarted by the Covid pandemic. Instead, the event was delayed until October, resulting in an earlier start to the holiday shopping season than ever.

“There are a number of factors,” Olsavsky said of why Amazon is pushing the event forward. Among these reasons, the CFO cited the Olympics which were held in July, as well as the “vacation month” for many families.

“Maybe it would be better for customers, sellers and sellers to experience a different time frame,” he said. “We experimented the other way … in 2020, moving it to October. But we think the timing might be better later in the second quarter. So that’s what we’re testing this year.”

Over the past few years, Prime Day has prompted retailers like Walmart, Target and Kohl’s to offer competing promotions. And he probably will do it again.

“It creates excitement out of nowhere, straight out of the void,” Juozas Kaziukenas, founder and CEO of Marketplace Pulse, said of Prime Day.

“People will just buy more things … and maybe now is a good time to do it in June, earlier,” he said. “Because there is a lot of excitement about getting things back to normal, and people are likely to buy more clothes and more travel-related items – which they haven’t bought for a very long time. . “

In the past, Amazon has used Prime Day to push and promote its fashion offers, an increasing part of its activity. This could be his greatest opportunity to do so, as many Americans are emerging from their pandemic cocoons and refreshing their wardrobes.

The new schedule could also prompt many parents to start back-to-school shopping earlier. Back to school is the second busiest retail opportunity after the winter break.

By moving Prime Day into the second quarter, Amazon could also look to soften the comparisons it will face as it rolls back home lockdowns last spring, when business soared. In 2020, Amazon Second-quarter revenue jumped 40% to $ 88.91 billion, thanks in large part to the storage of buyers during the health crisis.

“They have a lot to beat,” said Neil Saunders, Managing Director of GlobalData Retail. “All retailers are going to suffer. It’s not manipulation, but it definitely puts the trade where it needs to go to make the numbers look very positive.”

Other retailers, such as Walmart and Target, also saw their sales increase in the second quarter as they were considered essential retailers and remained open last spring. Others have had to temporarily close stores due to Covid restrictions.

Amazon has not disclosed the amount of sales it recorded on the first day of last year, but it said third-party sellers in its marketplace earned more than $ 3.5 billion, an increase of almost 60% compared to 2019 and a record for the small and medium-sized companies that make up the market.

“Prime Day is kind of a fake party,” Kaziukenas said. “But I think it gets enough excitement and enough marketing that whatever they put out will sell.”

—CNBC Annie palmer contributed to this reporting.

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