The Takeaway: Amazon Prime Day Results Signal Price Conscious Consumers Are Still Spending

Highlights: 

Top-selling categories included consumer electronics, home goods, and Amazon devices. Among the top items were Apple watches, Levi’s apparel and accessories, Lego sets, and Beats by Dre headphones. 

PMG teams noted an influx of brands, small and large, that used paid channels to drive towards Amazon storefronts. Meanwhile, Amazon ads to promote Amazon Prime Day were seen across platforms such as TikTok, Instagram, and Twitter, in addition to Prime Day promotions by creators. 

Toys offered some of the biggest discounts, according to Adobe Analytics, with an average discount of 15 percent. Apparel items were 12 percent cheaper than normal, with electronics seeing an overall six percent discount. 

Share of voice on the platform during Amazon Prime Day was dominated by a few leading retailers, including Beats by Dre, Apple, Calvin Klein, and Hanes, according to Momentum Commerce. 

Consumer insights company Numerator reported the average order size during Prime Day was $52.26, up from $44.75 during last year’s event. 

“Many PMG brands running on Amazon beat Prime Day forecasts while other retailers that ran sales in parallel to Amazon Prime Day saw heightened competition in the market,” said Mary O’Brien, programmatic director at PMG. “Prime offers are now table stakes for even small brands, as shoppers are eager to bargain hunt not just on Amazon but across their favorite retail sites during Amazon Prime Day.” 

Consumers were eager to take advantage of the best deals online before they were gone, with the most sales occurring from 8 p.m. to 9 p.m. PT last Wednesday, the final day of the event. Collectively, “Prime members saved over $1.7 billion [on purchases made during Amazon Prime Day], more than any previous Prime Day event,” according to Amazon. With the ecommerce giant accounting for more than 40 percent of online sales, the results from Amazon Prime Day offer insight into the state of the American shopper.

“With ‘back to school’ around the corner and promotional discounts being quite favorable for consumers, we saw accelerated growth momentum for days that have historically produced significant spending,” said Pat Brown, vice president of Adobe, in a statement to Fortune. “It’s apparent that consumers are incredibly price conscious, and it will be important for retailers to leverage price effectively, in order to unlock new growth potential online.”

A cloud of uncertainty hangs over the U.S. economy in an ongoing bear market, as supply chains remain snarled and businesses pull back on expenditures and investments in anticipation of a potential recession. With rising prices showing no signs of slowing down, early signals indicate consumers have cut back on nonessential purchases. These economic challenges affect categories differently, with retail sales in June growing a modest one percent month-over-month. According to the latest data from the U.S. Commerce Department, sales were up across most retail categories but “declined in clothing, home improvement, and department stores.” But there is optimism among analysts, who note that consumers have been “remarkably capable of managing inflation so far,” with big sales days (i.e., Amazon Prime Day) and seasonal needs like back to school shopping, expected to increase retail sales for the quarter. 

For marketers, maintaining agility is essential to navigating the current economic climate as monetary and fiscal policies help steer the American economy back on track, affecting consumer spending, shopping behavior, and overall consumer sentiment. 

Consumers are still buying despite inflation concerns, and with the holiday season just around the corner, people will be eager to see what kind of deals are offered in the final months of the year. If the 2022 holiday season is anything like 2021, price will be a critical factor in the purchase decisions of millions of consumers. 

To meet this moment, marketers should:

Dive into the data: Performance trends surrounding Amazon Prime Day are early indicators that consumer sentiment isn’t completely curbing consumer spending, but people are in the market for good deals, and this is likely to continue from now through the holiday season. From our data, many brands took promotional action around Prime Day, including further markdowns, which boosted gains over last weekend. Customer analysis, in particular, can help guide strategies in the immediate term as value customers appear to be less inclined to "trade up" and are seeing discounts, while higher-end customers are proving more resilient with full-priced messaging. Insights like these can help brands understand how customers engaged with a brand leading up to and during Amazon Prime Day, providing valuable insights that can inform holiday strategies. 

Test into new formats: From GooglePerformance Max to programmatic TV buys to social commerce, there are many advantages to diversifying media spend and testing into new opportunities across the full funnel, wherever people are in their purchase journeys. Setting aside a modest testing budget to invest, and scale into new strategies and customer segments can help brands grow market share. 

Plan for agility: Always-on contingency models are essential in our current economic climate, helping to ensure that as business conditions evolve, brands are ready with levers to pull like spend fallbacks, demand risk assessments, targeted promotional contingencies, and more. No one can predict the next six months, but by adopting an agile mindset, marketers are equipped to quickly respond to market conditions and find pockets of performance gains and growth. 

For more insight into how marketers can prepare and respond to our current economic climate, check out PMG’s latest perspective on maintaining agility through uncertainty.