If the old adage about death and taxes being the two inevitabilities in life still holds true, Amazon sellers know that Black Friday is indeed the third.
While many sellers look upon Black Friday with a mixture of dread and anticipation, Amazon themselves know the value of the event. After all, they didn’t extend it into a 12 day bonanza for lack of interest.
It’s a strategy that has paid off. The Seattle behemoth recently announced their Black Friday and Cyber Monday sales was the largest holiday season event in the retailer’s history.
But how does it compare to Amazon’s other customer-specific landmark: Prime Day?
Black Friday and Prime Day: Two Different Seasons, Two Different Reasons
Historically, sales during Prime Day have dwarfed both Black Friday and Cyber Monday.
It’s not solely because an estimated 75 percent of US consumers are also Prime subscribers. It’s because Prime Day discounts are notoriously vast, with some recent analysis indicating a 21% average during the most recent event in October.
It’s precisely that difference in value that has driven an increase in early holiday spending, with recent reports revealing that nearly half of US consumers in 2024 were expected to begin browsing and shopping for the holidays prior to November.
Yet, Black Friday discounts are also extremely competitive, with savings in excess of 50 percent becoming more and more common. Nor should it be particularly surprising that inflation-driven spending has been a common trait among consumers over the past few years.
So why did Amazon see historic sales during Black Friday this year?
It’s a question that may be politically driven.
Amazon and the Threat of Tariffs
When President-elect Trump announced plans to enact tariffs on imports from Canada, Mexico and China in the days leading up to Thanksgiving, both analysts and consumers weren’t afraid to voice their concerns that the proposal could result in a drastic increase in the price of consumer goods. Nowhere could this be more apparent than in Chinese based sellers, who are estimated to represent nearly half of Amazon’s third party sales.
Particularly at risk are electronics, which could see increases as high as 45% and dampen consumer demand by as much as 54%. Yet while Amazon has overthrown Walmart as the lowest priced US retailer for eight consecutive years, that may do little to appease an already budget-conscious consumer segment.
As any veteran seller on Amazon will tell you, their supply chain has never been particularly diverse. Product pricing and categories may be incredibly variable, but their investment in domestic sellers over the past few years has been known to be wildly inconsistent (to say the least.)
While it may be doubtful that they’ll experiment with dynamic pricing, domestic brand support and services could potentially see a boost now that the retailer has found themselves in direct competition with Chinese based platforms, including Temu and Shein.
However, the long term impacts of tariffs on Amazon sales may depend on how effectively they can maintain a competitive edge while still facing a potential decrease in consumer spending.
Exclusivity and Black Friday: Oil and Water?
Nor were Amazon the only retailer to boast of record sales during this season’s Black Friday and Cyber Monday events. Their chief competitor Walmart Marketplace also announced their highest sales day ever this year, including setting a single day conversion rate.
Overall, Adobe Analytics estimated that the five days from Black Friday to Cyber Monday constituted $41.1 Billion this year, a YoY increase of some 8.2%. That number might seem paltry in comparison to the $14.2 Billion reportedly garnered during Amazon Prime Day in July of this year. But that number also doesn’t take into account that Prime Day is the result of a single retailer running a single event lasting a limited 48 hours
One thing may be for certain, however. Whatever atmosphere of exclusivity Amazon touts during Prime Day, it’s becoming increasingly more rare that will translate into a virtue during Black Friday and Cyber Monday. Consumers will still demand the best deals, and they expect those deals to be commonplace, inclusive and convenient.
And nowhere else is this more true than in times of consumer uncertainty, particularly at the moment that we’re just starting to crawl out of an inflationary crisis. No one has a crystal ball nor a time machine set back to pre-pandemic times. And the only thing customers trust more than their own budgets is their own sense of judgment.
Helping your business grow faster both on Amazon and off is what we do. Find out more at Color More Lines
Commenti