Amazon (AMZN - Free Report) experienced record-breaking sales in its recent Prime Day event, which took place on Oct 13-14.
This shows that the company has been gaining significant Prime momentum ahead of the holiday season. Notably, Prime members could save more than $1.4 billion in this two-day mega shopping event, thanks to great deals on several items.
This will certainly drive Prime membership during this busy holiday shopping season.
Further, the company witnessed solid momentum among third-party sellers, especially small and medium businesses (SMBs). Sales generated by these sellers exceeded $3.5 billion during the event, surging around 60% year over year.
This bodes well for Amazon’s strong investment to support SMBs during this coronavirus-led unprecedented time.
We believe robust Prime Day sales along with strong momentum among customers as well as sellers will likely to boost Amazon’s performance in the current holiday quarter, which is crucial for its annual sales figure.
Notably, the company raked in robust sales in product categories such as home, electronics, beauty, fashion, grocery, toys, furniture, everyday essentials, school supplies and, nutrition and wellness. Additionally, the company witnessed solid demand for its Fire and Echo devices, including Echo Dot, Fire TV Stick 4K with Alexa Voice Remote.
Intensifying Holiday Battle
Undoubtedly, Amazon is posing a strong challenge to retailers like Walmart (WMT - Free Report) , Target (TGT - Free Report) , Kroger (KR - Free Report) and Costco, to name a few, on the heels of its special Prime Day event and strong sales out of it.
Moreover, the recent Prime Day strengthened the company’s position in the holiday battle. The company just announced its Holiday Dash deals event, offering deep discounts on several products across toys, fashion, electronics, home, kitchen and beauty among other categories, in a bid to bolster its holiday performance.
However, the holiday battle is intensifying on concerted efforts being made by Walmart and Target.
Notably, Walmart has also announced a revamped version of Black Friday Deals for Days event which will split into three-period sub-events – Event 1 starting from Nov 5 through Nov 7, Event 2 from Nov 11 to Nov 14 and Event 3 from Nov 25 to Nov 27.
Target, in the meanwhile, conducted Deal Days during the same time as the recent Prime Day event.
Such strong holiday efforts by these retailers pose concern for Amazon.
Currently, Amazon carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prime: A Key Catalyst
Nevertheless, a strong Prime subscriber base, which currently stands above 150 million members, is a major positive for the company.
Strengthening delivery and shipment services, expanding music and video content as well as customer-friendly offers and robust loyalty system are constantly expanding the company’s Prime subscriber base.
Solid Prime momentum is Amazon’s key growth catalyst in the retail space. Additionally, Prime Day celebration brings in profits for the company by benefiting shoppers as well as third-party sellers to a great extent.
Hence, Amazon is well-poised to deliver a strong holiday performance and sustain its dominant position in the online retail space with the help of its Prime program.
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