Small businesses see mixed benefits: Amid an ongoing antitrust investigation by the European Commission, Amazon highlighted the success of small merchants on its platform, noting that this year marked “the biggest Prime Day event for Amazon’s selling partners.”
- Roughly one-third of the items purchased by shoppers were from small businesses, Amazon said.
- But as Jason Goldberg, chief commerce strategy officer for Publicis, told Vox, it’s difficult for third-party sellers to build loyalty on Amazon because people tend to go for the first—and cheapest—listing they see. “Sellers are increasingly learning that you can’t acquire customers on Amazon; you’re renting customers on Amazon,” he said.
- Prime Day is also an opportunity for Amazon to collect valuable data on what consumers are searching for and buying, which it then uses to inform its own advertising and retail business.
Amazon’s growing pains: While Prime Day 2022 appears to be a success on paper, the shift toward smaller-ticket items like chips and toilet paper may have eaten into Amazon’s margins, even when accounting for record Amazon device sales.
The company is also proposing concessions to its European business that could affect its ability to grow as it seeks to quell antitrust scrutiny.
- Amazon told the European Commission it would stop using seller data to aid its retail business, expand seller access to the “Buy Box” and other valuable site real estate, and enable merchants to use other logistics providers to fulfill Prime orders.
The big takeaway: Prime Day is no longer the tremendous boost to Amazon’s business it once was, although it will likely help the ecommerce giant overcome sluggish sales in the first part of the year.
But as eroding spending power forces consumers to make hard choices about what and how they buy, Amazon’s reputation for good deals coupled with the convenience of Prime delivery could make the retailer the first port of call for inflation-weary shoppers.