Amazon’s marketplace sellers sold more than $ 3.5 billion worth of products on Prime Day, an increase of more than 60 percent over the previous year – even more than Amazon’s basic business, the company announced on Thursday.
“We’re thrilled that Prime Day was a record event for small and medium-sized businesses worldwide,” said Jeff Wilke, CEO of Amazon’s Global Consumer.
The e-commerce company didn’t release total sales for the two-day event, but analysts estimated total sales at $ 9.9 billion to $ 11 billion, up 43 percent year over year.
Prime Day’s amazing growth is due to more and more people settling at home and shopping online as the coronavirus pandemic continues to spread across the country. According to data research firm eMarketer, e-commerce sales are projected to hit nearly $ 795 billion this year, up around 32 percent year over year.
“We saw e-commerce accelerate last spring in ways that seemed impossible given the magnitude of the economic crisis,” said Andrew Lipsman, principal analyst at eMarketer, in a statement.
Amazon was a clear winner over the course of the pandemic. The stock is up around 87 percent since the start of the year, while Amazon CEO Jeff Bezos’ net worth is around $ 200 billion, according to Forbes. That makes him the richest person in the world.
But this fortune has cost the workers, say critics. The pandemic has exacerbated workers’ safety concerns as the company struggled to complete orders within a tight timeframe of one to two days. The controversy continued when Amazon fired a worker on Staten Island after leading strikes to press the company for additional protection in warehouses. In early October, Amazon announced that more than 19,000 workers, or 1.4 percent of its 1.3 million employees, were infected with the coronavirus.
“Amazon continues to show a persistent disregard for the health and safety of its employees,” said Stuart Appelbaum, president of the retail, wholesale and department stores union, in a statement. “It shows more concern for his robots than for the working people who helped create the massive wealth that made Jeff Bezos the richest person in the history of the world.”
The size of Amazon and the growing network of Prime members made Prime Day too big for retailers to ignore. Amazon is typically a summer event and has postponed Prime Day to October this year, creating a ripple effect across retail. Bulky retailers like Target, Walmart and Best Buy launched all the Deals events the same week as Prime Day in hopes of getting dollars from buyers who might be shopping for a price.
According to Edison Trends, Amazon’s share of sales fell year-over-year by around 2 percent to 94 percent of consumer spending within the first seven hours after the sales event. Walmart came next with 3 percent, followed by Best Buy and Target with 2 percent.
While Amazon still has a firm grip on sales on Prime Day, its slightly smaller share underscores the fierce competition among bulk retailers as they battle for consumer dollars with discounts and offers this Christmas season. For example, Amazon hit a Prime deal for Apple AirPods with a wireless charging case for $ 149.98. But Best Buy sold the same Airpods with a discounted case for $ 169.99, plus four months of free Apple News and Apple Music to new subscribers.
“It’s interesting what you find,” said Adele Harrington, development director at United National Consumer Suppliers, a wholesaler for the country’s largest retailers. “Nobody seems to be trying to keep up with Amazon – but they are bundling offers.”
With the holiday season making up a large portion of total annual sales, retailers need to stimulate in-store and online shoppers to make up for the lost sales as the year progresses. Many companies may need to lower their margins to get huge discounts that will get people shopping while expanding online sales channels, Harrington said.
“The uncertainty is unprecedented,” said Alexa Driansky, senior vice president in the retail practice for consulting firm AlixPartners, in a statement. “The winners in this environment will be those who can quickly adapt to the dramatic channel shift and use the resulting increased amounts of data to make decisions that create a seamless and secure customer experience.”