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Amazon Prime Day deals are almost here. Should you take advantage of them?

July 14, 2024
in General
Amazon Prime Day deals are almost here. Should you take advantage of them?
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NEW YORK — It’s summertime, and the bargains seem easy at a time when many consumer prices are high.

July sales events have become a seasonal revenue driver for the retail industry since Amazon launched its first Prime Day back in 2015. While consumers may be enticed by the advertised can’t-miss savings on some products, personal finance experts say shoppers should be careful not to fall for potentially misleading marketing or give in to impulse buys.

Amazon has drummed up expectations in recent weeks for its 10th Prime Day event, which will be held on Tuesday and Wednesday and is open only to customers who pay $14.99 per month, or $139 per year, to receive free shipping and other perks as Prime members.

Rival retailers tried in the past to capture some of the Prime Day excitement by offering their own discounts during the two-day event. This year, Walmart, Target, Kohl’s, and newcomers TikTok Shop and Temu launched summer promotions ahead of Amazon, hoping to siphon off some of the e-commerce giant’s savings-hungry shoppers. Meanwhile, Macy’s will be rolling out what it calls its “best summer deals” during an eight-day discount event that begins on Tuesday.

July sales help retailers attract customers who are looking to get a head start on back-to-school shopping, which is the industry’s second-most important shopping season behind the winter holiday period. The markdowns also pull in some discretionary spending from shoppers who’ve had their eyes on gadgets, household products and seasonal items, such as a bikini or a new summer dress.

Discounts can help retailers combat “a summer lull in retail spending” as consumers shift their spending to summer vacations and services, like going out to eat at restaurants, according to John Mercer, the head of global research at Coresight Research.

“It drives a bit of excitement in that mid-year period,” when retailers may otherwise struggle to generate more revenue, Mercer said. Companies also have relied on discounts to drive consumer spending during the recent period of inflation and high interest rates, he said.

Amazon doesn’t disclose how much revenue it pulls in from Prime Day, but it has given some indications of its success. The company said last year’s event resulted in the “single largest sales day” in the company’s history, with customers purchasing more than 375 million items.

An estimate from market research firm Emarketer indicated Amazon’s global sales on Prime Day went up to $12.5 billion in 2023. The firm forecasts sales to jump roughly 7% this year.

It depends on who you ask.

Retailers hype up their promotions to pull people in. But the New York Times-owned product review website Wirecutter published an article this month saying most of Amazon’s early deals this year so far “stink.”

Santa Clara University business professor Kirthi Kalyanam, who is writing a book about Amazon, said Prime Day offers have been good, historically. That’s because the company was able to source discounts from well-known brands such as Apple and to incentivize third-party sellers to lower their prices by promising to feature them prominently on the Amandon website, according to Halyanam.

But Prime Day discounts may matter less these days because customers are getting accustomed to the ultra-cheap products sold by Amazon competitors Shein and Temu, which were both founded in China.

“Many of (the) deals may not be as competitive compared to Temu and Shien,” Kalyanam said.

At the same time, he noted rival retailers will most likely be looking at Amazon’s prices and trying to match them overnight. Last week, he said he saw Best Buy discount two products after Amazon revealed some of its early deals.

Consumer data company Numerator reported that a majority of the roughly 5,000 Prime Day shoppers it surveyed after last year’s event saw product discounts of up to 40%. Survey respondents said they saw a quarter of items selling at a discount of 60% or more.

Some shopping experts have said that some past Prime discounts were not as big as they appeared.

If you’re watching your budget, personal finance experts say you should exercise caution before you buy.

“Avoid the false sense of urgency of manufactured holidays,” advises Mark Elliot, chief customer officer at financial services company LendingClub. “The idea that ‘The more you spend, the more you save’ — that’s just definitionally not true.”

Dan Egan, a vice president at financial advising and investment company Betterment, says shoppers should make a list of what they need before the sales begin to be intentional about purchases. He also encourages consumers to avoid shopping late at night or out of boredom.

“Once you have a list, it’s less likely you’ll get distracted by things you don’t need,” Egan said. “If that list contains almost nothing, I would say to delete the (retailers’) apps off your phone for the next week or two. Or you’re going to get lots of notifications.”

Any shopper already carrying a credit card balance should keep in mind that the interest paid on that balance could end up cancelling out any perceived savings from a summer sale purchase, he added.

“A deal is not a deal if you have to pay interest on it,” Egan said.

While it may make sense for shoppers to try out free or temporary memberships to qualify for the best deals during the summer sales, those programs typically charge a fee to the customer’s credit card on file after a short period of time, noted Erin Witte, the Consumer Federation of America’s director of consumer protection.

“Set a calendar reminder to cancel if you don’t want to go through with that subscription,” Witte said. “Think about it right at the beginning. And remember that these companies design this product to make it easy to sign up, but more difficult to cancel.”

Consumer Reports also offers a few tips: Download Amazon’s app, sign-up for invite-only deals available for a select group of shoppers, and join the waitlist on limited-time offers that are already sold out.

Filling up an online Amazon cart is tempting for Prime members since they are paying for access to Prime Day deals. But it’s always a smart idea to compare prices across multiple websites before completing a purchase.

Unlike Prime Day offers, Walmart’s discount event this month was open to everyone. However, the company sweetened the deal for its Walmart+ members by offering them early access.

Target only offered discounts to shoppers enrolled in its Target Circle loyalty program and used the weeklong event to promote a new membership program that aims to rejuvenate sales and traffic.

TikTok Shop, the e-commerce arm of the popular video-sharing app, opened its summer sales event to everyone. The event started on July 9 and runs until Wednesday.

_______

The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

‘

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : ABC News – https://abcnews.go.com/Business/wireStory/amazon-prime-day-deals-advantage-111924124

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