How to prepare for Prime Day in uncertain times

Nobody knows exactly what the retail landscape will look like in July, but we know the annual Amazon Prime Day sales extravaganza is taking place.

Amazon recently announced that for the 11th year in a row, it will host its Prime Day omnichannel sales extravaganza in July. No specific dates have been set, but in recent years Prime Day has lasted 48 hours with several weeks of early deals leading up to the event. 

[READ MORE: Amazon Prime Day returning in July]

Typically, more than 100 retailers host some type of competing sales event in the same general timeframe as Prime Day. While there is no realistic hope of "beating" Amazon, the event is large enough that it produces a general surge of online traffic and sales that is more than worth pursuing a piece of.

However, declining consumer sentiment and concerns over inflation and tariffs have cast a pall over Prime Day this year, with some Amazon sellers reportedly planning to scale back or even sit out their participation this year.  

In my opinion, this is an erroneous approach. Nobody can say for certain what the economic environment will be like for Prime Day 2025, but a reasonable bet is things won’t be horrible but perhaps not as good as for the past few Prime Days, either.

Retailers should start taking some basic steps now to shore themselves up for what may be a challenging, but still potentially quite rewarding, Prime Day event. Here are a few suggestions:

Get your stock now

Traffic into U.S. ports is expected to dramatically slow, and many experts are predicting goods that are heavily reliant on importation (such as toys, which are almost entirely produced in China) will see shortages in the coming months.

To hedge against future product shortages and/or cost fluctuations resulting from tariffs and inflation, if they haven't already begun retailers should start procuring inventory for their Prime Day promotions now. Whenever possible, try to find items that are sourced in a way that minimizes or eliminates the impact of tariffs on your margins. Even domestically produced goods may become scarce and/or more expensive between now and July, so obtaining safety stock is imperative.

Develop the personal touch

The prospect of tighter-than-normal margins means it might be even tougher than usual to compete with Amazon on price (which is exceptionally difficult in the best of circumstances). A personalized customer experience will be a more important competitive differentiator than ever before if prices are high and profits low.

Start developing robust personalization plans now. If you have a customer loyalty program, prime it for Prime Day (pun intended). Sort through member data and compare historical shopping propensities against the merchandise you plan to promote during Prime Day. 

Create tailored deals and discounts that have a high likelihood of triggering purchases with high-value loyalty members. Also, now is the time to ensure you have the capability to automatically analyze behavior of anonymous customers in real time to deliver cross- and up-sell offers based on general historical purchasing patterns. 

Fortunately, there are numerous cloud-based "plug and play" solutions available that retailers can quickly and easily deploy to augment their personalization capabilities if needed.

Investigate alternate pricing strategies

As mentioned, competing with Amazon directly on price will likely be even more difficult than normal this year, with possible margin complications. Retailers should start evaluating their Prime Day pricing plans now and see if there are other ways to make the cost of a product more appealing beyond simply cutting prices across the board.

For example, rather than rely on straight discounts retailers can encourage purchases via “buy one get one” promotions, high-low pricing where taking a profit hit on one item is offset by increased purchases of another higher-margin product, and limited-time flash deals that generate buzz and traffic which can be converted to higher overall sales.

Late Doors lead vocalist Jim Morrison once sang, "the future’s uncertain and the end is always near." The future is indeed a bit uncertain, but that doesn’t mean the outlook has to be bad.