Last updated: Amazon Prime Day 2020: Big boom, or just another day in quarantine life?

Amazon Prime Day 2020: Big boom, or just another day in quarantine life?


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Amazon Prime Day 2020 splashed across the headlines when Amazon announced that it would be holding its annual Prime Day on October 13-14.

Finally, the mystery was over.

After postponing its annual mega sale from its usual July timeframe amid the pandemic crisis, the online retail giant settled on mid-October, with an eye on jumpstarting holiday shopping.

But is Amazon Prime Day really that a big deal in 2020?

Stuck at home, people already spend a lot of time shopping online – much of it with Amazon. And out of pure boredom, consumers have already started their holiday buying online, well before Halloween.

So it remains to be seen whether all the discounted TVs, Echo Dot smart speakers, game consoles, and Instant Pots will be a major factor for retail this year.

The COVID-19-triggered economic recession has made many consumers hesitant to spend money on anything other than essentials. And as this disastrous year continues, one day just blurs into the next.

Amazon Prime Day: Setting the pace

Since Amazon started Prime Day in 2015, the sale has had a big impact in the larger retail market, sparking sales in the sluggish summer months and pre-empting traditional back-to-school sales. Competitors to Amazon have responded with their own promotions – one report estimated that 250 online retailers offered alternative sales at the same time last year.

Already this year, Target and Walmart have announced plans to offer online deals at the same time as Amazon’s event.

Amazon uses the sale to encourage consumers to join its Prime loyalty program (annual cost is $119 a year or $12.99 a month).

Prime Day is a huge moneymaker for the company, which raked in an estimated $7 billion dollars from last year’s event. It’s grown into a two-day event spanning many more countries and products.

Strange year, strange holiday season

This year, Prime Day will be weeks before the traditional start of the retail holiday shopping season — Black Friday and Cyber Monday. But in a year where everything has changed, so has Black Friday.

Walmart, Macy’s and other retailers have said their stores won’t be open on Thanksgiving Day, and many plan to offer deals sooner to avoid shoppers crowding into stores.

The mad dash for deals won’t cut it in the era of social distancing. Retailers are focusing on extended holiday deals through their online operations in  anticipation of consumers preferring to do their holiday shopping from the safe confines of home.

Deloitte predicts that overall US holiday retail sales will grow a tepid 1% to 1.5%, but e-commerce sales will jump 25% to 35% year over year. Much will depend on how much wealthy consumers spend versus how much lower income folks save, according to Deloitte.

In May, a survey of 1,000 US consumers by Jungle Scout – a platform for third-party merchants to sell on Amazon – found that:

  • 61% planned to reduce their spending on non-essential items
  • 71% reported shopping on Amazon during the pandemic
  • 48% said they shop on Amazon more often now

With its poll showing that 39% of consumers definitely plan to shop on Prime Day, Jungle Scout believes this year’s sale could be the biggest yet.

“Although the COVID-19 pandemic delayed Prime Day from its normal July timeframe, Amazon clearly didn’t want to skip such an important driver of their business,” Greg Mercer, Jungle Scout CEO and a big Amazon seller, said in a statement. “Prime Day usually sees a sales spike equivalent to the Q4 holiday spike, but this year is unprecedented due to Amazon Prime Day, Black Friday, Cyber Monday, and the holiday shopping season all happening within 2-3 months.”

Small business boost? Amazon Prime Day 2020 focuses on smaller e-commerce sellers

This year, Amazon says it’s making a special effort to help its small business partners benefit  from Prime Day. Brick-and-mortar small businesses have been hit especially hard by prolonged closures, forcing many to transition to online sales.

Here’s how Amazon plans to help:

  1. Prime members get a $10 credit to use on Prime Day when they spend $10 on items sold by specific small businesses in its store.
  2. The company is spending more than $100 million to promote small businesses worldwide.
  3. Amazon Live will spotlight deals curated from small businesses across the e-commerce site.

“This has been a challenging year for many small businesses, and selling in Amazon’s stores has enabled hundreds of thousands of smaller companies to sustain and even grow their sales despite the COVID-19 crisis and beyond,” Amazon said in a statement.

According to Jungle Scout, 94% of Amazon’s third-party sellers sell on Amazon Prime because they sell via Fulfillment by Amazon (FBA).

Jungle Scout advises sellers take a number of steps, including listing optimization and creating email promotions, in advance of Prime Day.

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