With e-commerce activity reaching unprecedented levels, due to the ongoing COVID-19 pandemic, it has brought an increased focus on this week’s Amazon Prime Days, which are Tuesday, October 13 and Wednesday, October 14.
The global e-commerce titan has often described Amazon Prime Days as “a 2-day parade of epic deals,” and there is no question that remains the case today, too. Now in its sixth year, Amazon Prime Days have become an event eagerly awaited and anticipated by consumers, and, from Amazon’s perspective, the logistics planning and preparation it requires by Amazon grows incrementally by the year.
That was highlighted by Brian Olsavsky, Amazon Senior Vice President and Chief Financial Officer, on the company’s first quarter earnings call, at the end of April.
“While we generally have experience in getting ready for spikes in demand for known events like the holiday season and Prime Day, we also generally spend months ramping up for these periods,” he said.
But with COVID-19 essentially changing many things businesses and consumers once took for granted, this year’s Amazon Prime Days are gearing up to be much different than any of its predecessors, for a whole host of reasons.
That was made clear by Rob Martinez, president & CEO, Shipware Systems Corp, a San Diego-based parcel consultancy.
“It’s likely that 2020 Amazon Prime Day (actually spread over multiple days) will shift the traditional start of the holiday shopping season from Black Friday (day after Thanksgiving) to October 13,” he said. “That’s welcomed news for the carriers, spreading out holiday volumes over an extra month, taking pressure off already overburdened delivery networks. That said, Amazon has become a lot more self-sufficient handling its own deliveries. It’s noteworthy that in 2019 Amazon reportedly delivered 1.9 billion packages through its in-house delivery network in the U.S. alone. That’s 155% year over year growth, with a compound annual growth rate estimate of 30% through 2024.”
While Amazon Prime Day used to be held in July, Martinez explained that the pandemic and associated high e-commerce growth is the reason for the shift to October. And he added that Amazon was not yet ready in July, with the expectation that will likely return to July in 2021.
And Trevor Outman, Shipware, Founder and Co-CEO, pointed to estimates from Digital Commerce 360 that indicated Amazon Prime Day total gross sales were up 71% from 2018 to 2019 and also observed that the peak season volume for e-commerce is expected to deliver a 40%-to-70% annual increase, from 2019 to 2020.
“Combine the organic growth of Amazon Prime Day volume with the shifts in buying behavior because of the pandemic, and I fully expect Prime Day to deliver eye-popping volumes this year,” said Outman. “As people begin to think about the holidays and presents to be bought for friends and family, no one is thinking about going to the mall or retail stores as they may have done last year. Amazon Prime Day offers an opportunity for many to take advantage of discounted items while also getting a head start on their holiday shopping.”
That sentiment was also endorsed by Jerry Hempstead, president of Orlando-based Hempstead Consulting.
“Purchasing online has now become part of our DNA,” said Hempstead. “Home delivery is now widely adopted. People now love the fun of Prime Day, watching to score some deal. People are working at home with time on their hands so they are going to be watching what’s going on at the site so I’m expecting the biggest prime day ever.”
And he also said that he expects delivery performance this week with the carriers (not just UPS) to be challenged.
From a service provider perspective, Kraig Foreman, President, eCommerce of DHL Supply Chain North America, explained that for Amazon, as well as myriad other retailers, are going through a material change, with a focus on driving earlier sales, rather than just relying on the traditional six-week run-up to the holidays.
“It is not Amazon Prime Day anymore, it is days, and you see other retailers now doing major marketing and shifts to try and drive sales to October and early November and not just be reliant on those key three-to-six weeks,” he said. “There are concerns on labor availability and parcel capacity during that time to handle what natural consumer behavior would have been had we not been influenced by buyer behavior to bring it in early.”