For economists, Amazon’s Prime Day is more than just a sales promotion by the nation’s largest online retailer. It could be the canary in the coal mine.
The annual shopping event is under much scrutiny this year because of growing recession worries. On the final day of Prime Day, the government reported the worst inflation numbers in 41 years. So, how consumers behave during this sales event could say a lot about where the economy is right now.
The initial numbers present a mixed picture. Numerator is a market research and data firm that tracked results from the first 32 hours of Prime Day. The numbers showed that consumers were spending, but they aren't going overboard.
So far, the average order is $53.14, which is slightly higher than last year’s $47.14 average. Of those orders, 42% totaled no more than $20. About 13% of orders were $100 or more.
Shoppers are showing restraint
Those numbers are fairly encouraging for economists concerned about a recession. Fifty-two percent of households shopping on Prime Day have placed at least two orders so far, while 9% have logged at least five orders.
The average Prime Day spending per household is currently $117, with 16% of shoppers spending more than $200.
It should be noted that Prime Day is not a gauge for the overall population. Prime, after all, is a subscription service that carries a $14.99 a month fee. That said, consumers who receive some qualifying government assistance can get a Prime membership for $6.99 a month.
Many shoppers are mindful of inflation
Economists who are focused on inflation would prefer to see restrained spending. The Federal Reserve’s policy of aggressively raising interest rates is aimed at dampening consumer demand, which over the last few months has helped fuel inflation.
Those economists may be cheered by data collected by Numerator. In its survey, 83% of Prime Day shoppers said inflation and rising prices influenced their Amazon purchases. In fact, 33% of shoppers said they purposefully waited until Prime Day to make a purchase in order to get a lower price.
Others – nearly 20% – said they used the sale to stock up on items they needed. Another 27% admitted to passing up a purchase that was a great deal but not really necessary.
With hours to go before Prime Day 2022 ends, “household essentials” is the leading category of purchases, earning nearly a third of all orders. Health and beauty products make up 27% of orders, followed by consumer electronics at 27%.