Amazon.com Inc.’s Prime Day sales event saw a significant uptick, with sales rising almost 12% in the first seven hours compared to the same period last year, according to Momentum Commerce.
TakeAway Points:
- Amazon’s Prime Day sales jumped by over 12% in the first seven hours, with Fire TV sticks and protein shakes among the best-selling products.
- Brands lost control over their advertisements as a result of a technical issue that affected merchants’ ad expenditures on Amazon’s marketing platform.
- With a high number of injuries, a Senate study raises worries about worker safety during Prime Day; Amazon intends to invest $750 million in safety measures.
Prime Day Sales increase
This firm manages 50 brands across various product categories and generates about $7 billion in annual sales on Amazon. The early results indicate a strong performance for Prime Day, as sales during the 2023 event also peaked in the initial hours.
Sky Canaves, an analyst at EMarketer Inc., noted, “Consumers continue to spend, but they do so strategically, which can benefit a sale like Prime Day.” The average household spent approximately $100 on Prime Day purchases as of noon New York time, according to Numerator, which tracked over 2,000 orders from more than 1,200 households. Top-selling items included protein shakes, the Amazon Fire TV stick streaming device, sunscreen, and Amazon’s Happy Belly brand grocery items.
Prime Day, launched in 2015, aims to attract new subscribers to Amazon’s Prime service, which costs $139 annually and offers shipping discounts, video streaming, and other benefits. As of March, about 180 million people in the US had Prime memberships, up 8% from the previous year, according to Consumer Intelligence Research Partners.
Adobe Inc. estimated that online sales across all retailers would total $14 billion over the two-day event, up almost 11% from last year. EMarketer provided a more conservative estimate of 6% growth, predicting $13.8 billion in US online spending during Prime Day, with direct sales on Amazon up 5.5% to $8.2 billion.
Glitch in the Marketing Portal
Despite the strong sales performance, Amazon faced technical issues with its marketing portal for merchants, which crashed on Tuesday night. This portal is a self-service system where merchants and brands can adjust their ad budgets and bid on keywords to ensure their products appear in response to consumer queries. Without this interface, brands were left without control over their ad spending on Amazon.
Jed Rawson, whose consulting firm, Pirawna, manages Amazon accounts that sell nearly $500 million per year, confirmed that several sellers were discussing the issue online. Bloomberg reviewed a private Slack channel of Amazon sellers, where four others reported similar problems. Several Amazon consultants also discussed the glitch on LinkedIn. A company spokesperson did not provide an immediate comment but mentioned that the matter was being investigated.
Safety for workers rise concerns
Prime Day has also drawn scrutiny for its impact on worker safety. The Senate’s Health, Education, Labor, and Pensions (HELP) Committee released preliminary results of a yearlong investigation into Amazon’s warehouse working conditions. The report indicated that Prime Day is a “major” cause of worker injuries. Internal data from Prime Day 2019 showed a total injury rate of “just under” 45 injuries per 100 workers, affecting nearly half of the company’s warehouse workforce.
Senator Bernie Sanders, who chairs the HELP committee, stated, “Amazon continues to treat its workers as disposable and with complete contempt for their safety and wellbeing. That is unacceptable and that has got to change.” The report also highlighted that Amazon’s warehouses have been understaffed during Prime Day and the holiday shopping seasons, endangering workers who have to manage increased volume without additional support.
Amazon spokesperson Kelly Nantel responded, saying the report “draws sweeping and inaccurate conclusions based on unverified anecdotes, and it misrepresents documents that are several years old and contained factual errors and faulty analysis.”
Nantel added that since 2019, Amazon has reduced its incident rate for injuries requiring more than basic first aid by 28% in the US and the lost time incident rate by 75%. The company announced plans to invest more than $750 million in safety initiatives this year and has begun automating some tasks and rolling out more robotic systems in warehouse facilities to improve safety.
