The battle comes amid inflation and the resumption of student loan payments, which have tempered consumer spending.
Still, Amazon and Walmart are targeting consumers who splurge on nonessentials. Amazon is accustomed to enticing customers as it faced challenges during last year’s Prime Day event, which included inflationary pressures. According to a PYMNTS Prime Day 2022 report that surveyed 3,245 shoppers, spending on Prime Day 2022 increased by 40% to $175.
To surpass its 2022 Prime Day record of selling over 300 million items worldwide during its 2023 event in July, Amazon devised promotions aimed at acquiring new customers and strengthening connections with existing ones, including launching “invite-only” promotions, allowing shoppers to indicate their interest in a deal and receive a purchase link for available items.
As a result, during the initial 24 hours of Amazon’s 2023 Prime Day event, online spending by U.S. consumers reached $6.4 billion.
Amazon said small businesses played a role in making July’s Prime Day event the largest ever, contributing to the sale of over 375 million items, surpassing Amazon’s own retail business.
Before the event launch, PYMNTS spoke with Claire O’Donnell, director of selling partner empowerment, communities and trust at Amazon, about the company’s fresh Prime Day emphasis: the promotion of deals from small- to medium-sized businesses (SMBs).
O’Donnell highlighted a shift in customer behavior, especially among younger consumers, who were increasingly aligning their shopping decisions with their personal values. The shift was characterized by a strong inclination to support small businesses. In response, Amazon took measures to improve the visibility of small businesses.
These are some of the methods the eCommerce giant is looking to continue employing during its second Prime Day event, Prime Big Deal Days, which will take place Tuesday (Oct. 10) and Wednesday (Oct. 11), in time for the holiday season.
Walmart, meanwhile, is also gearing up to win the hearts and wallets of shoppers. Its Walmart Deals — Holiday Kickoff will take place Monday (Oct. 9) to Thursday (Oct. 12).
Walmart said it will have “thousands of deals” on holiday gifts from several categories, including electronics, toys, home goods and fashionable items.
Amazon and Walmart are distinguishing themselves during these sales events through their approaches.
Amazon is prioritizing personalization for Prime members by aiming to simplify the process of discovering deals that align with their preferences. It is using tailored recommendations rooted in consumers’ past purchases, browsing history and items saved to their lists. In contrast, Walmart does not mention Walmart+ members or place particular emphasis on them.
Amazon noted in its announcement that Prime members can also get ahead of the curve by signing up for invite-only deals on select products that are expected to sell out quickly and can choose the delivery option that best suits their needs.
To make the shopping experience more convenient, Amazon is offering deal-alert notifications. Shoppers can subscribe to receive notifications related to their recent Amazon searches and recently viewed items.
Customers can also receive deal notifications from Alexa up to 24 hours in advance on eligible items saved to a wish list, in a cart or saved for later. Plus, they can ask Alexa to remind them of a deal when it goes live or make the purchase for them.
Third-party sellers are dedicating increased advertising resources to Walmart’s marketplace as the retail giant is placing more emphasis on the sector.
However, the reach of Walmart’s and Amazon’s marketplaces is different. Walmart’s focus is primarily on the U.S., Canada and Mexico, limiting its international presence. In contrast, Amazon operates a seller network across 22 countries, including markets like Australia, Germany, Japan and the United Arab Emirates. This coverage gives Amazon an advantage in terms of global market penetration.
Additionally, PYMNTS Intelligence found that during the second quarter of 2023, 6 out of every 10 units sold on Amazon were supplied by third-party sellers. As a result, third-party sales constitute 73% of the total value of online sales on Amazon.
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