Amazon’s Prime Day Sales Show Mixed Results
SAN FRANCISCO – Amazon recently expanded its Prime Day sales from one to four days, celebrating substantial sales numbers shortly after. However, there’s a catch: the company’s U.S. sign-ups fell short of last year’s figures and even its own expectations, according to internal data seen by Reuters.
During the 21 days leading up to Prime Day, which took place from July 8 to July 11, Amazon reported 5.4 million U.S. sign-ups. This figure was about 116,000 less than the previous year and 106,000 below the company’s internal goal, reflecting roughly a 2% decline in both cases.
The details of this data, not publicly available, provide a rare insight into Amazon’s Prime business, a subscription service known for offering speedy delivery and access to streaming content. The company usually keeps its Prime program details under wraps.
While Amazon claimed record-breaking sign-ups in the 25 days surrounding Prime Day, specifics were sparse. They stated that “Prime membership continues to show strong growth and customer engagement in the U.S. and internationally.”
Prime Day is seen as a major opportunity to gain new members, as noted by sources familiar with the situation. Yet, it’s common for subscriptions to dwindle once the discounts are gone, according to those who chose to remain anonymous due to company policy.
On the competition front, Amazon faces notable challenges from Walmart, which is bolstering its own membership program featuring fast delivery and other benefits.
Interestingly, amid expectations of a less impressive Prime Day due to the Trump administration’s tariffs affecting both importers and consumers, CEO Andy Jassy described the event as Amazon’s “biggest ever.” He highlighted record sales and sign-ups leading into the event, claiming that customers saved “billions of dollars.”
During the four-day Prime Day, Amazon signed up 1.6 million new Prime subscribers in the U.S., surpassing an internal target by about 6%. However, leading up to the event, another internal metric showed that Amazon gained only 3.9 million new U.S. Prime members, which was 185,000 fewer than the same period last year and fell short of their goal by 193,000, equating to a 5% miss.
While Reuters couldn’t obtain worldwide data from Amazon, some analysts emphasize that Prime is crucial for the company. Colin Sebastian from R.W. Baird noted that Prime members typically spend more and are less swayed by lower prices from competitors.
Prime benefits, including free shipping (sometimes within an hour), encourage customers to shop more on Amazon, making it more appealing than alternatives. According to Consumer Intelligence Research Partners, Prime members in the U.S. spent an average of $1,170 per year compared to $570 for non-members.
Jeff Bezos once expressed his intention for Prime to be so appealing that not being a member would feel “irresponsible.” Initially launched in 2005 for $79, the subscription fee has increased over time, most recently reaching $139 in 2022. This program generated $23.9 billion in revenue in the first half of this year, marking it as a key growth area for Amazon.
To foster membership growth, Amazon is expanding its discounted program for students aged 18-24 and is also offering a six-month free trial. Additionally, the company is investing over $4 billion to enhance its rural delivery network in the U.S.
