Amazon Prime Day comes amid slowdown in online sales growth

Wilton Vinck

Amazon is heading into its annual Prime Day sales event on Tuesday much differently than how it entered the pandemic.

The company has long used the two-day event — one of its biggest all year — to lure people to its Prime membership, for which Amazon recently raised the price to $139 a year from $119 a year.

Amazon doesn’t disclose Prime Day results, though research firm Insider Intelligence suggests sales could climb to about $12.5 billion in global sales — or 17% over last year — in part because of the event’s mid-July timing, which compared to last year’s June date would allow the company to capture more consumers doing back-to-school shopping.

Still, growth has slowed. Last year, sales increased by 8%, much lower than the 67.9% and 43% spikes in 2019 and 2020 respectively, according to Insider Intelligence.

Amazon could use a good boost. Once the darling of the pandemic economy, the company posted a rare quarterly loss in April as well as its slowest rate of revenue growth in nearly two decades — at 7%. Inflation had added roughly $2 billion in costs.


Amazon also acknowledged it had too many workers and expects its excess capacity from its massive warehouse expansion during the pandemic to total $10 billion in extra costs for the first half of this year.

“It’s causing pain at the moment, and that pain is considerable,” said Neil Saunders, the managing director of GlobalData Retail.

It’s quite a reversal from the early days of the pandemic when the e-commerce giant’s profits soared as homebound shoppers turned to online shopping to avoid contracting the coronavirus. The demand was so high that Amazon nearly doubled its workforce in the last two years to more than 1.6 million people.

It also increased its warehouse capacity to match the avalanche of orders flooding its site. By the end of 2021, Amazon had leased and owned roughly 387.1 million square feet of space for its warehouses and data centers — more than double what it reported in 2019.

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