New analysis indicates Amazon Prime Day produced mixed results for retailers, but bodes well for consumers.
According to Salesforce Shopping Index data, online sales for brands and retailers selling directly through their own sites grew by 8% on Tuesday and Wednesday, July 12-13 (the 48-hour period Amazon hosted Prime Day 2022), compared to the same two-day period in July 2021. U.S. online sales grew by 21% over this period.
However, Salesforce analysis indicates global online sales for non-Amazon sites were down 12% compared to Prime Day 2021, which demonstrated soft growth compared to Prime Day in 2019 and 2020. According to Salesforce, oversaturation in several key markets has resulted in too much online product and not enough customers.
As a result, Salesforce says global discount rates averaged 16% during the two-day Prime Day period, up 7% compared to the first half of 2022. This was also a 23% increase over the discount rates Salesforce observed during the 2021 Prime Day event.
Luggage and handbags remained one of the fastest-growing Prime Day categories in 2022, but other popular categories changed significantly from 2021. Active footwear and haircare joined the three fastest-growing Prime Day product categories in 2022, replacing toys and furniture. Active footwear saw the biggest year-over-year increase (23%).
Meanwhile, Salesforce tracked sales for toys and home appliances as decreasing the most year-over-year during Prime Day. Therefore, Salesforce anticipates higher discounts and significant margin pressure going into the holidays. In response, Salesforce expects retailers may increase base prices while increasing discount rates, in an effort to create the perception of better deals.
Q2 online sales flounder despite inflation Looking at the year-over-year overall performance of online sales, Salesforce finds that online sales has now fallen for two straight quarters this year, declining by 6% globally in the second quarter from April through June. Second-quarter e-commerce sales rose 2% year over year in the U.S., and showed negative growth across all of Europe.
The declines came as average selling price rose 4% globally and 9% in the U.S. from a year earlier, driven by global order volumes decreasing by 9% year-over-year year. In Canada, which has one of the world’s highest inflation rates, shoppers placed 31% fewer orders and online retail sales fell 20% from the previous year.
The only region Salesforce recorded as experiencing significant online sales growth during the second quarter was Asia-Pacific (excluding Australia-New Zealand and Japan), which grew by 13% year-over-year.
“One key benefit for consumers from this year’s Prime Day? The long-awaited discounting season has finally returned,” Caila Schwartz, director, consumer strategy & insights, Salesforce, said in a corporate blog post. “Discount rates over July 12-13 returned to typical holiday-era levels after a 2021 defined by high demand and low discounting due to inventory scarcity across the supply chain.”
The Salesforce Q2 Shopping Index analyzes the activity of more than one billion shoppers across more than 61 countries powered by the Salesforce Commerce Cloud. Several factors are subsequently applied to extrapolate projections and actuals for the broader retail industry.