Amazon.com will hold its annual Prime Day shopping event in September this year rather than July to give the strains on its operations more time to subside, the Wall Street Journal reported this week. A company spokesperson declined to comment.
The two-day sales event is a big sales bonanza for Amazon, bringing in an estimated $7 billion last year. But Prime Day, a shopping event invented in 2015 with no link to any larger social occasion, aims to help Amazon reach a more important goal: get people to sign up for Prime, its membership service that offers unlimited faster shipping for an annual fee and entertainment like music and movies, in the aim of making Amazon the default e-commerce site for consumers.
And Prime has been a success on that front: According to one report, 112 million Americans were Prime members as of December. At the same time, that success has meant Amazon has struggled with demand during the pandemic as online sales surged while most physical stores were idle.
The Journal reported that delaying Prime Day would help Amazon process orders more quickly in its warehouses and make room for more inventory, addressing the recent problem it has had with longer than expected shipping times that have frustrated shoppers. Amazon has not reinstated one-day shipping for many Prime orders, though there have been big improvements in two-day shipping, the Journal reported.
Amazon has lifted restrictions on nonessential goods and restored coupons and deals. But it is still dealing with many out-of-stock items. Last month, the company warned investors it would spending $4 billion in the current quarter on coronavirus-related expenses such including “getting products to customers and keeping employees safe.”
Though Amazon has an enormous lead on its rivals, many brick-and-mortar chains have stepped up during the COVID-19 related lockdowns, using stores to offer faster delivery and give shoppers an additional option to quickly retrieve online orders. Lowe’s and Target saw digital sales rise around 150% last month, greatly added by stores offering curbside pickup. At Walmart, online sales rose 74% last quarter, adding to the pressure on Amazon.
Last month, Reuters reported that Amazon would postpone the event until at least August and potentially take a $100 million hit from the excess devices it would have to sell at a discount.
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