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As Prime Day Ushered In an Earlier Than Ever Holiday Shopping Season — Not Every Retailer Benefited From Amazon’s Halo

It came as no surprise that Amazon’s earlier-than-ever Prime Day was a major win for the e-tail behemoth, which continues to dominate online shopping — perhaps even more so — in unprecedented times. A new study, however, is shedding light on the impact of Amazon’s massive sales event on other retail players.

According to a report released today by Deloitte, Amazon’s Prime Day expectedly served as the unofficial kickoff for the 2020 holiday season, as many major retailers launched similar massive online promotions, driving overall digital sales up 50% year-over-year, from Oct. 11-17.

In the same week in late September that Amazon announced the official date for Prime Day — to be held Oct. 13 and 14 following several coronavirus-induced delays — both Target and Walmart released news of their own sales events, with dates that unsurprisingly overlapped with Amazon’s. Target’s Deal Days took place on Oct. 13 and 14, and Walmart’s Big Save event ran from Oct. 11 to 15.

Deloitte’s InSightIQ team analyzed consumer spending data from the first three weeks of October and found this barrage of sales extravaganzas proved sufficient to rile up coronavirus-weary consumers, who spread their spending across several major retailers.

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Still, not every company cashed in on the halo effect.

Sales spikes during Prime week, much like the pattern seen throughout the COVID-19 pandemic, favored mass merchants that have “consistently seen spending increases since [March]; have been able to remain open, meet broad consumer needs, and deliver omnichannel shopping,” noted Deloitte.

During the big promotional week of Oct. 11-17, year-over-year spending at mass merchants increased three times above the previous two weeks. In other words, Prime Day was the added bump on top of an already-upbeat period for companies like Walmart, Target and Amazon that have benefited from their designation as essential retailers — compared to pure plays in fashion, food services and other sectors, which have, at times, been forced to shutter or reduce their capacity amid the health crisis. And in fact, department stores, off-price sellers and footwear and apparel retailers actually saw a dip in consumer spending during the week of Prime Day and other concurring sales events.

Nevertheless, according to Deloitte, retailers specializing in toys and games, electronics and sporting goods did enjoy a spending increase during the sales event periods, signaling an early start for traditional holiday categories as well.

Overall, as the consumer shift to online shopping has accelerated due to the pandemic, a plethora of data suggests digital revenues will continue to take a larger slice of the retail sales pie — although many experts insist stores will remain relevant and, in some cases, have an advantage in the months and years ahead.

Ryan Gellis, founding partner of tech services provider RMG Media, told FN last month that brick-and-mortar retail firms should be leveraging their store footprint wherever possible this holiday season — leaning on services like buy online pickup in store and curbside pickup for convenience and to drive incremental purchases.

“If I’m Target or Walmart, the key differentiator versus Amazon is that I have my physical store infrastructure to build on,” noted Gellis. “They should [ask themselves] ‘how do I leverage my online presence to draw foot traffic into the stores and drive impulse buys?’ They should be pushing products [related to activities] people can do at home. People are purchasing more furniture and exercise equipment and things like televisions and other electronics. There are still a lot of people across the country who are sitting at home in cities where restaurants, bars and movie theaters are closed.”

Deloitte’s new data showed online sales during the first and second week of October were up 25% and 24% respectively. The number of people visiting retailers’ digital sites was also on the rise: During the third week in October, visits increased 63% year-over-year, and the number of unique visitors increased 47%.

Meanwhile, accounting for both stores and online, major promotional events — including Prime Day — drove a 6% year-over-year increase in consumer spending.

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