Reuters: Amazon Prime Day

July 11, 2023

A trend of slower consumer spending

Running Point and its chief investment officer, Michael Ashley Schulman, CFA, were quoted by Reuters in an article — by reporter Granth Vanaik with Ananya Mariam Rajesh and Arriana McLymore“Amazon dangles deeper ‘Prime Day’ discounts for stressed US shoppers” — regarding consumer and investor expectations for Amazon Prime Day which begins today.

Prime Day has lost its novelty

This Amazon Prime Day may be a little less exciting and have lower sales growth than previous ones. The novelty has worn off and AWS cloud growth along with generative artificial intelligence (AI) applications have become more of a factor for the company’s prospects. Thus, Amazon Prime sales growth expectations will be lower this year than in years past.

Prime Day competition is stiffer

Also, the competitive environment is higher as Walmart, Costco, and Best Buy ramp up their direct competition with Amazon during its Prime Day period—expect consumers to do more comparison shopping. Work from home and lifestyle electronic items which were huge sellers during the pandemic may see the largest discounts. However, consumers may have the most interest in seeking deals on new shoes and clothing that they can wear while vacationing as well as on discounts for common consumer items they would normally purchase.

Of course, if Amazon could offer Prime Day discounts on travel, entertainment, or services—i.e., in the areas where consumer spend has shifted—then that could generate real buzz and a surprise uptick in revenue.

Article excerpts are below:

Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, said Amazon Prime sales growth will be slower this year, as many American consumers still have post-pandemic shopping fatigue and are cautious about “abusing their wallets.”

They “are looking to spend more on experiences, travel, and entertainment,” Schulman added. Running Point Capital Advisors has exposure to Amazon through Exchange Traded Funds (ETFs), among others.

He predicted Prime Day 2023 may add about $4 billion to $6 billion of incremental revenue for Amazon, up 10% to 16% from last year, as shoppers also take advantage of discounts for everyday staples like pantry items, toiletries, and cleaning supplies.

Amazon Prime Day
Amazon Prime Day — Graphics by

I’m all lost in the supermarket
I can no longer shop happily
I came in here for that special offer
A guaranteed personality

The Clash

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