Amazon’s delayed annual Prime Day event will greet the holidays this year. The discount-shopping event is taking place from October 13 to 14 and analysts expect a lift in sales compared to last year’s event.
Amazon’s sales were already up 34% during the first six months of the year due to the increased demand for online shopping, a trend that shot up with the pandemic.
Shaken up by the unprecedented consumer demand while readjusting operations to ensure employee safety during the pandemic, the company postponed its biggest shopping event of the year, which was supposed to be held in July.
“This year’s Prime Day is the perfect opportunity for Prime members to get their holiday shopping done early from the comfort of their homes – and to have more time to spend with their families and friends throughout the season,” said Jeff Wilke, Amazon CEO Worldwide Consumer.
The three-month delay lands Prime Day in a strategic transition period towards the holidays. According to analysts, the proximity to Thanksgiving and Christmas will induce early gift shopping. The general consensus is that this, combined with the overall rise in online shopping, will lead to a 40-50% increase in sales compared to the previous year.
“There are many questions around the holidays: what are stores going to look like? How many customers will they allow in? Are consumers going to feel comfortable coming back to stores around holiday time, when places are really busy?” Brian Yarborough, an analyst at Edward Jones, said. “Amazon being an online player and having the ability to offer one-day and two-day delivery will be a beneficiary of that.”
But Amazon is also facing unprecedented logistical challenges due to the coronavirus pandemic.
Last year, sales surged on Prime Day and provoked protests from overworked and overcrowded employees. Prime Day 2020 will be an even bigger challenge as the company faces scrutiny in regard to safety measures during the pandemic.
This week, Amazon released internal COVID-19 testing data that showed almost 20,000 out of 1.4 million employees were infected. The numbers were published after multiple employees criticized the company’s lack of safety measures or its inability to enforce them.
Amazon is benefiting from the current rise in online shopping as customers practice social distancing, but it is also investing hundreds of millions of dollars to handle the coronavirus in its facilities.
The dent on profits caused by the coronavirus safety measures is yet to be known but Amazon’s performance is expected to be strong through the end of the year.
Shares of Amazon are down 13% on Friday, October 2nd, from the stock’s September peak at $3,531. Nonetheless, Telsey Advisory Group is bullish, estimating a target price of $4,000.