E-commerce giant Amazon has delayed its annual Prime Day sale but is planning a clothing and fashion … [+]
© 2018 Bloomberg Finance LP
You could call it Amazon’s “Not Yet Ready for Prime Day” sale.
The e-commerce giant, which has postponed its annual Prime Day sale as it recovers from a pandemic-triggered surge in demand, is gearing up for a sale next week of clothing and fashion items.
Amazon AMZN doesn’t need to hold a big summer sale to boost its business. It still has more coronavirus-related business than it can easily handle.
But fashion brands and third party non-essential sellers need the sale in order to stay in business.
Amazon still hasn’t released many details about the event, which it is calling the “Big Style Sale”. It hasn’t confirmed the date, but most Amazon watchers expect it to begin June 22, the date mentioned in a notice to sellers obtained by CNBC. The sale could last a week or more.
An Amazon spokeswoman would only say that the sale is “slated to take place later this month” and that it will include “seasonally relevant deals from both established and smaller fashion brands.”
The event will give apparel brands a chance to unload the spring and summer merchandise they couldn’t sell in stores or on Amazon in March, April and May, and is likely to mean some big bargains for consumers.
It also helps Amazon mend relationships with brands and third party sellers that were blocked from selling on its platform while Amazon limited its fulfillment centers to shipping essential items like food, cleaning supplies and sanitizer, and toilet paper.
The sale could be a chance for Amazon to forge new relationships with fashion brands that previously didn’t use the platform, but now may be looking for new channels to sell their apparel.
“You’ve got a bunch of brands stuck with merchandise, and this is going to be an opportunity to generate cash,” said Frank Poore, CEO and founder of e-commerce managed marketplace platform CommerceHub.
“This summer sale is a way to make up for some lost ground, and also help some of their sellers move merchandise because there’s a lot of apparel merchandise obviously piled up from spring,” he said.
Brands that previously sold on Amazon found themselves shut out when Amazon limited shipments to its warehouses to essential items.
“A lot of these brands didn’t have the ability to do their own single pick, pack, and ship so they were kind of out of the game and had to find other channels to sell through,” Poore said.
He expects that Amazon will also invite fashion brands not previously sold on the site to participate. “They’re probably trying to lure in brands that are otherwise reluctant to work with them,” but that now see the offer as an opportunity they can’t pass up.
Apparel is an area where Amazon is likely to be able to offer unusually good deals because of excess inventory.
“Focusing on fashion makes sense,” said Michael Bonebright, consumer analyst with DealNews.com. “Tons of retailers are trying to get rid of unsold spring and summer clothes ahead of the fall,” he said.
DealNews, which tracks sales at Amazon and other retail sites, predicts Amazon will offer discounts of up to 50% on its own clothing brands during the Big Style Sale.
Just as other e-commerce sites typically host their own sales during Amazon’s Prime Day, Bonebright said he expects the summer sale will prompt a number of competitors to also hold sales next week.
Amazon boxes being loaded on a truck during Prime Day 2018. (AP Photo/Lynne Sladky)
Amazon usually holds Prime Day, a special sale event for Prime members, in mid-July, but postponed it this year after being overwhelmed by the high volume of orders that flooded in as Americans hunkered down at home and brick-and-mortar stores closed. It has not yet announced a new date for the event, but it reportedly will be held in September.
Dan de Grandpre, CEO of DealNews.com, sees the Big Style Event as a way for Amazon to make up some of the third quarter revenue that will be lost by not having Prime Day in July. “Without some sort of tent-pole event to make up for Prime Day, Amazon may be missing billions in revenue from Q3 results,” Grandpre said.
“Plus, months of lackluster apparel sales means that Amazon and its partners have the inventory to run a huge fashion event, whereas disruptions to its supply chain prevents Amazon from having Prime Day in July – or at all,” he said.
Last year, during the two-day Prime Day sales event, Amazon rang up more than $7 billion in sales and sold more than 175 million items, including 200,000 televisions, 100,000 laptops, and 1 million toys.
The surge in online orders as the pandemic began benefited other online retailers as well, and caused third party sellers to look for new channels to sell on while they were prevented from selling on Amazon.
While Amazon’s traffic in May was up 24.6% over February, competitors like Walmart WMT , Costco, Home Depot HD , Lowe’s, Target TGT and Wayfair W saw their May sales climb by between 50 and 132%, according to Marketplacepulse.
Amazon has also seen its share of online sales slip somewhat as consumers tried other e-commerce sites when items they wanted were sold out, or had delayed delivery times. Amazon’s share of online dollars spent was 42% in January, but dropped to 35.8 percent in May, according to research firm Rakuten Intelligence.
The biggest winners during Amazon’s Big Style Sale will be consumers, said Brett Rose, founder and CEO of United National Consumer Suppliers (UNCS) which buys manufacturer overstocks and closeouts and sells them to major retailers, as well as Amazon resellers.
Rose says the summer sale “is a great way for Amazon to jump start summer consumerism.”
The normal purchasing rhythms of spring and summer – buying for camp, or pool trips, or end-of-school parties – have been disrupted, and the Amazon sale could “get people to reengage” with those shopping habits, he said.
The deals at Amazon, and elsewhere, will be good because of the backlog of inventory. “It’s a great time to be a consumer,” he said.
Rose thinks a summer kickoff sale could become an annual event for Amazon, sort of a warm-up to the July Prime Day sales.
But we’ll see if Amazon’s “Not Yet Ready For Prime Day” sale remains when Amazon gets back to its regular July Prime Day schedule.