Amazon Prime Day Drives Online Sales Up 6.1%, Lags Estimate
Comment of the Day

July 13 2023

Commentary by Eoin Treacy

Amazon Prime Day Drives Online Sales Up 6.1%, Lags Estimate

This article from Bloomberg may be of interest. Here is a section:  

US shoppers spent $12.7 billion online during Inc.’s 48-hour Prime Day, up 6.1% from a year ago but short of estimates for 9.5% growth, according to Adobe Inc.

An increasing share of customers used “buy now, pay later” services, Adobe said, indicating shoppers are concerned about the economy. 

“For months, consumers have felt the effects of persistent inflation and an uncertain economic environment, and it has pushed shoppers to embrace more flexible ways to manage their spending around the Prime Day event,” said Vivek Pandya, an analyst with the technology company. “The revenue growth attributed to buy now, pay later is a preview of what we can expect in the months ahead, especially as we near the holiday shopping season.” 

Eoin Treacy's view

Amazon, in common with the other mega-caps, has staged an impressive rally over the last seven months. The basis for the rebound is inherently tied to the expectation inflationary pressures will subside, rates will return to close to zero and consumer spending will remain resilient throughout.
Sales bumps during discounting periods are to be expected. The persistence of buying activity is very much tied to the ability to pay. Improving real wages is a supporting factor as inflationary pressures fall. Amazon gapped higher today and continues to hold its sequence of higher reaction lows.
Spreading payments on online purchases is a relatively new phenomenon and is primarily used by young people who are unaccustomed to credit. The respective companies marry ease of use with social media campaigns to build market share. Affirm and Block both have developing base formation characteristics and would be among the beneficiaries of falling rates. 

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