Prime Day has once again been hailed by Amazon as a winning promotional event. However, hidden in the numbers is the fact that the average purchase in 2021was 18% less than in 2020 and 24% less than is 1999. What is not in the glowing report is how many customers held off ordering products at the regular price prior to Prime Day, knowing that prices would be better if they wait. How many purchases would have been made in the days following Prime Day that were simply moved forward and purchased early?
So, we are told that Prime Day increased sales by 6.1% over the previous year. But did the market grow 6.1% in additional volume or simply rearrange when these products would be purchased.
Repeated sale promotions over time lose their excitement and credibility. Prime Day was initially one day with large percentage discounts. Now it is two days with most discounts less than 10%. The only way to consistently offer large percentage discounts is to increase the initial margins which slow purchases in non-sale time periods. This increases the allusion as to how successful the sale event was since it become as self-fulling prophecy of periods of low volume at high prices and high volume at low prices. It is a game the retailers play and teach the customer to perform.
Why not sell at the right price all the time?