Chief Industry Advisor, Retail
Industry Advisor, Consumer Technology
Industry Advisor, Home and Home Improvement
Industry Advisor, Toys
The short answer is, yes. Despite current distractions, Marshal Cohen, chief industry advisor for NPD, expects Amazon’s Prime Days, and other promotional retailer events will have a purer promotional period than they did during the peak of the pandemic, when consumers distraction weakened the results. Read on to see what some of NPD’s industry advisors have to say about this year’s event.
The return of Prime Days promotions to July is good for many, but not all
This timing is advantageous, as it captures the consumer in the heart of the summer when they are closing one season in preparation for the next. It kicks-off back-to-school shopping, and jump-starts the fall season, while also getting retailers thinking about what they need to do to compete.– Marshal Cohen, Chief Industry Advisor, Retail
These promotions will not only help spur some demand during the typical summer tech sales doldrums, but also spread demand over a larger period, which will avoid some discount pressure in the fourth quarter. The timing will be particularly crucial for consumer electronics manufacturers that are faced with the excess inventory resulting from a year of playing catch-up.– Paul Gagnon, Industry Advisor, Consumer Technology
In addition to helping to move some built-up inventory, the July timing of Prime Days promotions aligns with a host of consumer needs around entertaining, wedding season, remodeling, and back-to-college.– Joe Derochowski, Industry Advisor, Home and Home Improvement
The 2021 promotions in June resulted in some strength in seasonal sales of outdoor toys. However, July has more of a back-to-school focus and is typically one of the slowest months for toy sales. When we add current pricing and economic conditions, July and August will likely be challenging for the toy industry, with or without Prime Days promotions. The 2020 Prime Days events that happened in October resulted in the strongest toy industry performance, given the timing alignment with holiday shopping. – Juli Lennett, Industry Advisor, Toys
Despite more than two years of heavy purchasing, opportunities remain for sales gains
Never underestimate the resilience of the consumer. Consumers love to take advantage of good deals, whether they need them or not. Some will replace items, some will upgrade, and some will splurge. However, the spending results from these promotional events could also present a signal of things to come, as there may be some hesitation from consumers, as they begin to shift into a different spending pattern. – Marshal Cohen
This will be the first Prime Days that Amazon can promote and sell its own Fire TVs, rather than Fire TVs branded by other companies. This shift will likely provide a big cost advantage, which is critical to watch, given the importance of driving new platform consumers. Consumers bought a lot of TVs over the past two years, but big discounting has only just recently resumed as key costs have plummeted, so Amazon could really drive a lot of volume with consumers who have been waiting for a deal. – Paul Gagnon
Consumers are returning to the office, travel, and increased in-person social engagement. They are balancing the behaviors developed during the pandemic with a desire for some of those pre-pandemic activities. Prime Days promotions have an opportunity to capture the consumer’s attention with products that help them juggle life amid a new set of needs. – Joe Derochowski
Toy unit sales growth might be a stretch, but there is potential for dollar gains. Despite the discounts over Prime Days, online average selling prices are typically higher than in physical stores, so the shift to the online channel for this promotional event could boost dollar sales of toys in the low single digits. – Juli Lennett
Current lifestyle needs of the consumer will be front and center
Lifestyle considerations will prove to be extremely important during Prime Days promotions. Consumers will be looking to continue to outfit their outdoor living areas, while preparing for the return to school and work, all with a healthy mindset. Some of the more ancillary products that weren’t upgraded over the past two years also have the potential to get some added attention. – Marshal Cohen
Promotions on tech products selling for less than $100 that are suited to the consumer’s return to travel will get a lot of attention – things like power banks, true wireless headphones, tablets, and e-readers. – Paul Gagnon
Toaster ovens, cookware, coffeemakers, and other traditional products will continue to be in demand, with an emphasis on the items that help with daily activities. Some of the hottest home products will be those that best address the consumer’s cooking, cleaning, and coffee needs, including air fryers, multi-cookers, espresso makers, robotic and stick vacuums, and bare floor and deep-carpet cleaners. – Joe Derochowski
The biggest opportunities in toys are the products that go after the adults-without-kids market. Sports trading cards, Pokémon and other strategic trading card games, LEGO Star Wars and other building sets, Squishmallows and other plush products, Funko POP and other action figures, and adult games. Items for kids that were difficult to find over the 2021 holiday shopping season, like Magic Mixies, might also be popular among parents who are looking to get a head-start on this year’s Christmas list. – Juli Lennett
Big Prime Days discounts will be welcomed by consumers on key items, but there are caveats
Marshal Cohen expects that the consumer’s quest for promotions will win out, as they have not yet entered a mode of severe spending pull-back. However, it could be the last hoorah for retailers, before the holiday shopping season. On the retail side of the equation, Prime Days will be a catalyst for price adjustments, jumpstarting promotions for retailers that were planning to wait.
In addition, the smoothing out of promotional peaks will continue. Just as with last year’s holiday shopping season, and the more recent holiday peaks, the impact of Amazon’s Prime Days and retailer promotional events that precede and follow it will be spread out over more time and will be less dramatic.